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Treas.
HJ
10
.A13P4
v.337
U.S.Department of the Treasury
PRESS RELEASES
NEWS
omCE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C. • 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
July 19, 1994
CONTACT: Jon Murchinson
(202) 622-2960
PIERCY TO BE SWORN IN AS WORLD BANK U.S. EXECUTIVE DIRECTOR
Jan Piercy will be sworn in as the U.S. Executive Director of the World Bank today,
July 19, 1994 by Comptroller of the Currency Eugene Ludwig in Chicago. The swearing-in
will take place at 6 p.m. at the South Shore Bank of Chicago, 71st and Jeffery Boulevard.
The World Bank is a multilateral institution whose purpose is to assist its member
countries achieve economic and social progress. Executive Directors are responsible for the
conduct of the general operations of the bank.
Shorebank Corporation, parent of the South Shore Bank of Chicago, is a privately
held company that has invested over $400 million in five inner-city Chicago neighborhoods
since 1974.
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LB-952
DEPARTMENT
OF
THE
TREASURY
I
NEWS
omCE OF PUBliC AFFAIRS -1500 PENNSYLVANlAAVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
July 15, 1994
CONTACf: Scott Dykema
(202) 622-2960
u.S., PORTUGAL INITIAL NEW TAX TREATY
The Treasury Department said Friday the United States and Portugal have
completed talks on a new income tax treaty.
Once ratified, the treaty would be the first of its kind between both nations. The
treaty was initialed July 14 following two days of negotiations in Washington. Cynthia
Beerbower, Treasury Deputy Assistant Secretary for tax policy and Dr. Vasco Jorge
Valdez, Secretary of State for fiscal affairs at Portugal's finance ministry, initialed the
new income tax convention.
Both officials pledged to move quickly to put the treaty into effect. The accord
must now be formally signed by both governments and then ratified. The U.S. Senate
must approve the treaty before ratification.
The text of the accord will be made public at the time of signature.
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LB-953
UBLIG DEBT NEWS
Department of the Treasury •
Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
July 18, 1994
CONTACT: Office of Financing
202-219-3350
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Tenders for $12,445 million of 13-week bills to be issued
July 21, 1994 and to mature October 20, 1994 were
accepted today (CUSIP: 912794L85).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average
Discount
Rate
4.29%
4.31%
4.31%
Investment
Rate
4.40%
4.42%
4.42%
Price
98.916
98.911
98.911
Tenders at the high discount rate were allotted 54%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Received
$49,703,901
Accepted
$12,445,382
$44,128,218
1,417,007
$45,545,225
$6,869,699
1,417,007
$8,286,706
3,172,460
3,172,460
986,216
$49,703,901
986,216
$12,445,382
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
An additional $204,684 thousand of bills will be
issued to foreign official institutions for new cash.
4.30% - 98.913
LB-9S4
UBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
July 18, 1994
CONTACT: Office of Financing
202-219-3350
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Tenders for $12,442 million of 26-week bills to be issued
July 21, 1994 and to mature January 19, 1995 were
accepted today (CUSIP: 912794P99).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average
Discount
Rate
4.70%
4.71%
4.71%
Investment
Rate
4.88%
4.89%
4.89%
Price
97.624
97.619
97.619
Tenders at the high discount rate were allotted 35%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Received
$55,200,590
Accepted
$12,442,411
$49,502,656
1,376,850
$50,879,506
$6,744,477
1,376,850
$8,121,327
3,200,000
3,200,000
1,121,084
$55,200,590
1,121,084
$12,442,411
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
An additional $232,416 thousand of bills will be
issued to foreign official institutions for new cash.
LB-955
DEPARTMENT
OF
'IREASURY
THE
TREASURY
NEWS
~~J78~9~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
................................
OFFICE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
For Release Upon Delivery
Expected at 10:00 a.m., E.S.T.
July 19, ·1994
STATEMENT OF
LESLIE B. SAMUELS
ASSISTANT SECRETARY (TAX POLICY)
DEPARTMENT OF THE TREASURY
BEFORE THE
SUBCOMMITTEE ON LABOR-MANAGEMENT RELATIONS
COMMITTEE ON EDUCATION AND LABOR
UNITED STATES HOUSE OF REPRESENTATIVES
Mr. Chairman and Members of the Committee:
I am pleased to present the views of the Treasury Department
on the Retirement Protection Act of 1993 (H.R. 3396). The
Treasury Department actively participated in the Administration's
PBGC Task Force and the Department strongly supports this
package. We believe that this legislation addresses the primary
causes of the recent trend of losses for the Pension Benefit
Guaranty Corporation (PBGC) and that enactment of the legislation
would reverse the trend of increasing PBGC deficits in a
responsible manner, before the situation becomes a crisis. This
morning I will discuss the portions of the bill that amend the
Internal Revenue Code.
Minimum funding reguirements
The bulk of the amendments to the Internal Revenue Code in
this legislation relate to the minimum funding rules that are
found in section 412. These minimum funding rules are designed
to ensure that employers sponsoring defined benefit plans set
aside assets to secure the benefit promise made to their
employees.
In recognition of the long-term nature of the
liabilities, the minimum funding rules permit employers to fund
their commitment over a number of years.
The minimum funding rules enacted as part of the Employee
Retirement Income Security Act of 1974 (ERISA) were amended in
1987.
These amendments require an employer with over 100
employees that sponsors an underfunded plan to make an additional
deficit reduction contribution designed to eliminate the
LB-95b
under funding more rapidly.
In reviewing the effectiveness of
these rules, the Administration's task force determined that some
employers with significantly underfunded plans had used loopholes
in the statute that allowed them to avoid making these additional
deficit reduction contributions.
The bill modifies the deficit reduction contribution
requirements in a number of ways in order to close the statutory
loopholes that employers have exploited.
First, the bill
improves the coordination of the deficit reduction contribution
and the regular minimum funding determinations.
Under current
law, the impact of actuarial gains and reductions in liability
due to changes in actuarial assumptions (or in the other
direction, the impact of actuarial losses and increases in
liability due to changes in actuarial assumptions) is recognized
twice in determining the deficit reduction contribution. The
bill would end this double counting and effectively require the
employer to make contributions based on the greater of the
regular minimum funding requirement and a free-standing deficit
reduction contribution.
Secondly, the bill mandates the use of certain standard
assumptions for purposes of determining the amount of a pension
plan's under funding and the amount of the resulting deficit
reduction contribution. The 1987 rules required the us~ of an
interest rate within the corridor of 90-110% of the interest rate
on 30-year Treasury bonds (averaged over the past four years) for
this purpose. However, the 1987 rules did not require the use of
any particular mortality table for this purpose. As a result,
employers with poorly funded pension plans have had an incentive
to use interest rates at the high end of the permitted corridor
and to assume that their employees have higher than standard
mortality (i.e., lower life expectancy). The use of high
interest rates and mortality assumptions minimizes the amount of
the apparent pension liability, reducing the required
contributions.
The Retirement Protection Act would mandate that the
interest rate used for purposes of determining the deficit
reduction contribution be no greater than 100% of the 30-year
Treasury rates (7.26% for plan years beginning in Ju~e 1994) and
would require the use of the group annuity mortality table
currently adopted by the insurance commissioners of at least 26
States. This is the same mortality table specified in Internal
Revenue Code Section 807(d) (5), relating to the determination of
reserves for life insurance companies.
The bill would also tighten the deficit reduction
contribution formula that determines the speed of funding new
plan liabilities under the 1987 amendments. The new formula
would require plans to fund substantially all of the increases in
liability in the first 5-7 years after the amendment.
Under
2
current law, the liability can be funded at a rate that
corresponds to 12 year amortization. This change will ensure
that increases in liability from benefit changes will be funded
over a period that more closely tracks the five-year phase-in of
PBGC's guaranty.
Finally, in developing the proposal we attempted to
anticipate how employers might try to avoid making deficit
reduction contributions in the future, and then we closed these
potential loopholes in advance.
For example, the bill provides
that employers sponsoring significantly underfunded pension plans
(i.e., over $50 million of underfunding in the controlled group)
would be required to obtain advance Internal Revenue Service
approval of changes in actuarial assumptions that significantly
decrease their current liability. Thus, while these employers
will be permitted to reflect their individual situations in
establishing retirement age assumptions, for example, they would
need to justify to the I.R.S. any changes in those assumptions
from prior assumptions. This requirement, in conjunction with
the use of a specified mortality table and a lower cap on the
interest rate, will help ensure that employers cannot manipulate
the plan's actuarial assumptions to avoid their responsibility to
fund their benefit promises.
The Administration recognized that an abrupt increase in the
minimum funding requirements may be overly burdensome for
empl6yers in the short term. Consequently, the bil~ includes
transition rules that give short-term relief to employers, while
still providing for steady, gradual improvement in plan funding.
Quarterly contributions and nondeductible contributions
As part of the process of reviewing the funding rules, the
task force identified two other related provisions that we
believed could be improved by narrowing the scope of their
application: the quarterly contribution requirements and the
excise tax on nondeductible contributions.
I will discuss each
of these provisions in turn.
The requirement that an employer make quarterly
contributions to its pension plan (modeled on the payment of
estimated income tax) was added in 1987 and provides an early
warning signal for the PBGC that an employer may be unable to
meet the minimum funding requirements for a year.
In the absence
of the quarterly contribution requirement, such an employer could
wait until 20 1/2 months after the beginning of the plan year
before coming to grips with its financial responsibility to the
plan. By requiring quarterly contributions, and notice to the
PBGC and plan participants of an employer's failure to pay these
installments, an employer is forced to face up to its problems
earlier in the year.
3
The quarterly contribution rules also are beneficial in the
situation where the employer's financial problems first appear
later in the plan year.
In this case, if the employer has been
making the required quarterly installments a plan will have been
at least partially funded during the portion of the year prior to
the development of the financial problems.
On the other hand, the requirement that an employer
contribute four times a year, together with the need to have an
actuary determine the minimum installments, adds an
administrative burden for an employer.
If a plan currently has
assets in excess of its current liability, the Task Force
concluded that the administrative burden on employers outweighs
the benefit of quarterly installments to the employees and the
Government. This is particularly true for plans near the full
funding limit, where an employer that must make a quarterly
contribution before the actuarial valuation is complete may
ultimately discover that the contribution is nondeductible.
For
these reasons, the bill would eliminate the quarterly
contribution requirement for plans that had assets in excess of
current liability in the previous year.
The purpose of the excise tax on nondeductible contributions
is to discourage employers from making these contributions in
order to transfer assets into the plan's tax-exempt trust.
In
the two situations described in the bill, we believe that the
employer's nondeductible contributions are not motivated by a
desire to obtain excessive tax shelter, but are primarily a
result of non-tax considerations, and should not generate an
excise tax. These situations arise where:
1)
an employer with
100 or fewer employees contributes an amount to its pension plan
to fund the current liability and then terminates the plan, or 2)
an employer sponsoring a defined benefit plan also sponsors a
section 401(k) plan with overlapping coverage that is receiving
employee salary deferrals or employer matching contributions
totaling less than 6 % of compensation.
In the former case, a
small employer may be required to make the nondeductible
contributions as a condition of plan termination. The latter
case deals with the anomalous situation where an employer wishes
to make additional contributions in order to decrease plan
underfunding, but is now discouraged from doing so because
employees are electing to make salary deferrals in a 401(k) plan
that count against the employer's aggregate qualified plan
deduction limits.
Actuarial equivalence
The bill makes some changes to the actuarial equivalence
rules used for purposes of converting annuities to nonannuity
distributions, primarily lump sums, under sections 417(e)
(restrictions on cash-outs) and 415(b) (maximum permitted
benefits). Under current law, the actuarial equivalence that can
4
be used for these purposes is based on two different interest
rates (one of which is tied to the PBGC interest rates used to
value terminated plans, the other of which can be as low as 5%)
and no specified mortality table. The bill would specify a
single interest rate and mortality table for both purposes. The
interest rate and mortality table are the same as those used in
the funding rules, except that the interest rate is the current
rate, rather than the 4 year average. Eliminating the current
cross-reference to the PBGC interest rates will also enable the
PBGC to adjust the interest rate it uses for other purposes in
the future without also affecting the benefits of participants in
all plans.
Nondiscrimination and Cross-testing
As a condition of tax-favored treatment, section 401(a) (4)
requires that retirement plans demonstrate that the contributions
or benefits provided under the plan do not discriminate in favor
of highly compensated employees. Under current law, this
demonstration can be on the basis of either contributions or
benefits, without regard to whether the plan is a defined
contribution plan or a defined benefit plan.
section 408 of the bill would generally prohibit the
practice known as "cross-testing" a qualified defined
contribution plan. The bill would generally require defined
contribution plans, and aggregations of defined contribution and
defined benefit plans, to demonstrate nondiscrimination on the
basis of actual plan contributions, as opposed to projected
benefits at retirement.
Cross-testing a defined contribution plan is needed when
plans provide different allocations, as a percentage of
compensation, to different employees. If the employees receiving
larger allocations are older than the other employees, the
difference may be justified by looking at the equivalent benefits
those allocations are projected to generate. While some argue
that cross-tested defined contribution plans merely make explicit
the age-bias that is implicitly found in traditional defined
benefit plans, there are significant differences between these
types of plans. For example, the amount of benefit an employee
receives from a defined benefit plan does not depend on the
investment return in the fund; and the delivery of that benefit
is further guaranteed by the PBGC. However, employees in a
cross-tested defined contribution plan bear investment risk. An
employee will receive the hypothetical benefit that is used to
satisfy the nondiscrimination rules only if the plan's investment
return and the conversion of the employee's account balance into
retirement income actually match the assumptions used in the
projection.
5
Creative practitioners have recently gone further than
merely mimicking the distributional aspects of defined benefit
plans by relating allocations to age. They have developed
aggressive plan designs that provide significantly higher
contributions for one class of employees (such as the owners of a
business) than for the rest of the employees.
If most of the
favored class is older than the other employees, as is often the
case in these situations, cross-testing may be used to satisfy
the nondiscrimination rules in an inappropriate way.
The potential for highly-compensated employees receiving
sUbstantial benefits in cross-tested plans has received
considerable press attention. For example, discussions of crosstesting have made their way into the Wall street Journal, Pension
World and Financial Planning magazine. These articles emphasize
the potential for highly-compensated employees to maximize
benefits for themselves while minimizing contributions for rankand-file workers.
For example, a June 1993 Financial Planning
article is headlined "Skewed retirement plans help owners at
workers' expense."
The Wall street Journal article leads with
the question "Is it a retirement plan , or a tax shelter?" An
article in the March 1994 Journal of the American society of CLU
and ChFC contains an illustration of an employer using crosstesting to reduce the allocations for rank-and-file workers from
15% of pay to 3% of pay, while the owner continues to receive an
allocation of $30,000. I have attached copies of a small
collection of these articles for the record.
The Administration is concerned that such practices and the
increasing attention that they have been receiving, can
• reduce the share of tax-subsidized retirement funds that
benefit rank-and-file workers
• encourage employers to abandon the defined benefit
system, thus eroding the PBGC premium base
• discourage the hiring of older rank-and-file workers (to
the extent that the Age Discrimination in Employment Act
doesn't protect these workers), and
• generally have a detrimental impact on the public's
perception of the integrity of our tax-favored retirement
system.
For these reasons, the Administration continues to support
restricting cross-testing.
Let me emphasize that this proposal was developed because
some employers are manipulating the cross-testing rules in order
to obtain a tax subsidy for retirement plans that provide
excessive contributions to highly compensated employees, at the
6
expense of rank-and-file workers. Since the Administration
proposed limiting cross-testing, we have heard from and met with
a number of interested groups. The purpose of our meetings with
these representatives has been to identify the types of plans
that provide meaningful benefits to rank-and-file workers, in
contrast to the abusive cases. We have received some useful
suggestions in this regard.
We hope that we can work with the committee in tailoring the
proposal to target the troublesome cases. In this process,
however, our guiding principle remains -- the abusive practices
must stop.
Rounding rules for indexed values
Many of the statutory dollar thresholds and limits used in
the qualified plan area are indexed to changes in the cost of
living. For example, the annual limit on contributions under
section 401(k) is $9,240 in 1994 (increased from $8,994 in 1993).
The bill would change the indexing rules so that the indexed
values for a year are available before the start of the year and
would provide for rounding of these indexed values to the next
lowest multiple of $500 or $5,000. The earlier determination of
the indexed values and the use of rounded values would simplify
administration by employers and communication with employees,
because the indexed values would not necessarily change each
year. The proposal also has the effect of raising revenue to
offset some costs of the bill. A similar rounding rule was
adopted in last year's reconciliation bill for the compensation
limit of section 401(a) (17).
Conclusion
In conclusion, I would like to emphasize that now is the
time to act, while the PBGC's problems are still manageable.
Although the PBGC has assumed significant liabilities over the
past ten years from the termination of underfunded plans, PBGC's
responsibility for benefit payments under those plans is spread
out over a number of years.
Enactment of the Retirement
Protection Act of 1993 will require employers sponsoring defined
benefit plans to do a better job of living up to their
commitments by adequately funding their plans, thereby reducing
PBGe's potential liability.
7
Removal Notice
The item identified below has been removed in accordance with FRASER's policy on handling
sensitive information in digitization projects due to copyright protections.
Citation Information
Document Type: Newspaper Article
Number of Pages Removed: 10
Author(s): Ellen E. Schultz
Title:
"Small Firms Turn Retirement Plans Into Owners' Gain"
Date:
1994-08-16
Journal:
Wall Street Journal
Volume:
Page(s):
URL:
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
DEPARTMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220 • (202) 622·2960
FOR RELEASE AT 2:30 P.M.
July 19, 1994
CONTACT:
Office of Financing
202/219-3350
TREASURY'S WEEKLY BILL OFFERING
The Treasury will auction two series of Treasury bills
totaling approximately $24,800 million, to be issued July 28,
1994. This offering will provide about $625 million of new cash
for the Treasury, as the maturing 13-week and 26-week bills are
outstanding in the amount of $24,181 million.
In addition to the
maturing,13-week and 26-week bills, there are $15,267 million of
maturing 52-week bills. The disposition of this latter amount
was announced last week.
Federal Reserve Banks hold $10,361 million of bills for
their own accounts in the three maturing issues. These may be
refunded at the weighted average discount rate of accepted
competitive tenders.
Federal Reserve Banks hold $3,962 million of the three
maturing issues as agents for foreign and international monetary
authorities.
These may be refunded within the offering amount
at the weighted average discount rate of accepted competitive
tenders. Additional amounts may be issued for such accounts if
the aggregate amount of new bids exceeds the aggregate amount
of maturing bills.
For purposes of determining such additional
amounts, foreign and international monetary authorities are
considered to hold $3,666 million of the original 13-week and
26-week issues.
Tenders for the bills will be received at Federal Reserve
Banks and Branches and at the Bureau of the Public Debt,
Washington, D. C.
This offering of Treasury securities is
governed by the terms and conditions set forth in the Uniform
Offering Circular (31 CFR Part 356) for the sale and issue by the
Treasury to the public of marketable Treasury bills, notes, and
bonds.
Details about each of the new securities are given in the
attached offering highlights.
000
Attachment
HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS
TO BE ISSUED JULY 28, 1994
July 19, 1994
Offering Amount .
.
.
.
.
Description of Offering:
Term and type of security
CUSIP number . . . . . .
Auction date
. . . .
Issue date
. . . . .
Maturity date .
Original issue date . . .
Currently outstanding
Minimum bid amount
Multiples . . . . . .
.
.
.
" .
. . . . .
.
.
.
$12,400 million
$12,400 million
91-day bill
912794 N7 5
July 25, 1994
July 28, 1994
October 27, 1994
April 28, 1994
$11,496 million
$10,000
$ 1,000
182-day bill
912794 Q2 3
July 25, 1994
July 28, 1994
January 26, 1995
July 28, 1994
$10,000
$ 1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids .
Competitive bids
Accepted in full up to $1,000,000 at the average
discount rate of accepted competitive bids
(1) Must be expressed as a discount rate with
two decimals, e.g., 7.10%.
(2) Net long position for each bidder must be
reported when the sum of the total bid
amount, at all discount rates, and the net
long position is $2 billion or greater.
(3) Net long position must be determined as of
one half-hour prior to the closing time for
receipt of competitive tenders.
Maximum Recognized Bid
at a Single yield
35% of public offering
Maximum Award . . .
35% of public offering
Receipt of Tenders:
Noncompetitive tenders
Competitive tenders
Payment Terms . . .
Prior to 12:00 noon Eastern Daylight Saving time
on auction day
Prior to 1:00 p.m. Eastern Daylight Saving time
on auction day
Full payment with tender or by charge to a funds
account at a Federal Reserve Bank on issue date
DEPARTMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBliC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C. • 20220 • (202) 622-2960
Contact:
FOR IMMEDIATE RELEASE
July 19, 1994
Scott Dykema
(202) 622-2960
BENTSEN TO UNVEIL STUDY OF UNINSURED AMERICAN WORKERS
Treasury Secretary Lloyd Bentsen will brief reporters tomorrow, Wednesday,
July 20, 1994, on a Treasury Department state-by-state study of American workers without
health insurance. The briefing will be in the White House briefing room at 11 a.m.
-30-
LB-958
DEPARTMENT
OF
THE
TREASURY
NEWS
~J78~9~. . . . . . . . . . . . . . . . . . . . . . . . . . . .1I
..............................
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220 • (202) 622-2960
FOR IMMEDIATE RELEASE
Text as Prepared for Delivery
July 20, 1994
REMARKS OF TREASURY SECRETARY LLOYD BENTSEN
WHITE HOUSE PRESS CORPS
WASHINGTON D.C.
I'm often asked: Who are these Americans without health insurance?
We tried answering that in a study Treasury just completed. We did an analysis
by states and by congressional districts estimating how many Americans have no health
insurance -- and who they are. Are they young? Do they have jobs?
The bottom line: the uninsured are your middle-income working neighbors.
Let me illustrate with the congressional district that includes my neighborhood. I
hope you take a look at your states and congressional districts, like I'm doing for Texas.
In the 15th District of Texas, on the Mexican border, the district I represented in
Congress -- there are 173,000 uninsured, almost 82 percent of them are in working
families, and 58,000 are uninsured children.
In Texas, there are 3.8 million people with no insurance, 84 percent are in
working families, and 972,000 are children.
Think about that: millions of children across this country have no insurance.
Children don't hire lobbyists. They don't have anyone to speak for them in this debate,
but they're the ones most vulnerable. Now you know why as a Senator from Texas, I
spent so much time working on improving health care coverage for children. Now we
have a chance to complete the job.
There's a sense in this country that uninsured are poor, or disabled, or elderly.
Not true. Most of those individuals already have coverage through Medicaid, Medicare,
and other public programs.
LB-959
2
By far, most of the uninsured are members of middle-income working families.
The Treasury study shows there are 37 million uninsured and 84 percent are in working
families.
And these people aren't poor.
more than $30,000 a year.
One in three is a member of a family making
Most uninsured either have an employer who doesn't provide coverage, or the
worker can't afford to buy it without help. And for most of the uninsured, being without
insurance, is a long-term, not a short-term problem.
If you have insurance, it's easy to say: "The uninsured don't affect me. That's
their problem." But it's your problem, too, because insurance costs are higher; taxes are
higher because of higher federal health costs; and Americans who lose their jobs may
well join the uninsured.
Let me conclude by saying this year we have a serious shot at achieving universal
coverage. It makes sense to build on the employer-based system, since that's how most
people today obtain their insurance. And we need health care to be affordable to both
employers and employees.
This is important to every one of us. Every one of us can tell a story about a
family member, a co-worker, a neighbor who's run into trouble with the current system.
That's what we're talking about -- fixing these problems.
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Texas
Total
District
Re resentative
1
2
3
4
5
Jim Chapman
Charles Wilson
Sam Johnson
Ralph M. Hall
John Bryant
Joe Barton
Bill Archer
Jack Fields
Jack Brooks
J. J. Pickle
Chet Edwards
Pete Geren
Bill Sarpalius
Greg laughlin
E. de la Garza
Ronald D. Coleman
Charles W. Stenholm
Craig A. Washington
larry Combest
Henry B. Gonzalez
lamar S. Smith
Tom Delay
Henry Bonilla
Martin Frost
Michael A. Andrews
Dick Ar~ey
Solomon P. Ortiz
Frank Tejeda
Gene Green
Eddie Bernice Johnson
6
7
8
9
10
11
12
13
14
@
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Total
Percent
114
117
90
110
129
94
100
104
112
125
121
122
130
128
@
164
122
137
121
158
105
107
158
130
124
102
162
161
178
96
96
79
94
108
83
88
90
95
107
99
104
109
108
141
134
103
113
103
130
91
92
130
111
106
90
134
133
148
118
3,233
83.8
82.4
88.0
85.5
84.2
87.9
87.6
85.9
84.7
85.3
82.1
85.1
83.8
84.3
@
82.0
83.8
82.6
85.5
82.3
86.0
86.6
82.8
85.4
85.7
87.9
82.5
82.4
83.1
28
28
17
26
31
18
20
22
26
24
29
29
33
33
58
49
31
32
30
43
23
23
49
34
29
19
50
49
55
34
972
Estimates of the Uninsured
in Working Families and
Uninsured Children by
Congressional District
: 111111111
•
111111.11
•• 11.
.11.1
•
I
• ••••• 111111111 :
•••••
•
I
11.1.
.1.11
111111111
Department of the Treasury
July 19, 1994
•
Table of Contents
Section I.
Profile of the Uninsured: Myth vs. Reality
Section II.
Estimation Procedures for Allocation of Uninsured Across Congressional
Districts
Section III.
Uninsured, Uninsured in Working Families, and Uninsured Children by
Congressional District
Section IV.
Background Data
Section I
Profile of the Uninsured: Myth vs. Reality
PROFILE OF THE UNINSURED:
MYTH VS. REALITY
As health reform reaches a critical stage in Congress, fashioning the right solution requires
having a clear understanding of the characteristics of the uninsured. Contrary to popular myth,
the uninsured are not all poor, elderly, or otherwise vulnerable. In fact, over half of the uninsured
live in families where at least one spouse is afull-year, full-time worker. Approximately 84
percent come from families whose head works at least part of the year. In addition, while even
short exposures without insurance put people at significant financial and health risk, being
uninsured is predominately a long-term problem. Finally, those who do purchase insurance, and
taxpayers as a group, bear much of the burden of the uninsured -- through both "cost shifting" to
private insurance premiums and increased spending on public programs.
Myth #1:
The uninsured are unemployed.
Reality:
The uninsured are working Americans.
The vast majority of the uninsured -- 83.8 percent -- belong to working families. Federal
programs already cover most of the non-working population. Medicare provides near-universal
coverage for those over 65, and Medicaid covers 50 percent of those in poverty and 25 percent of
those just above the poverty line.
As a result, large numbers of the uninsured are clustered in working families with moderate
incomes, who do not qualify for Medicaid. Insurers in general charge higher rates to the selfemployed and small businesses, which makes it difficult for them to obtain affordable coverage.
Job Status of the Uninsured
Full year. full-time
Full year. part-time
6.6%
Part-year
25.0%
2
Myth #2:
The uninsured are poor.
Reality:
The bulk of the uninsured have moderate incomes; many are middle-income.
The vast majority of the uninsured -- 72 percent -- have incomes above the federal poverty
threshold. While the average uninsured American family has a modest income, it is far from
being in poverty.
The bulk of the uninsured are in hard-working families for whom health insurance is
unaffordable. Because small businesses and the self-employed have difficulty obtaining
affordable insurance, almost one in three of the uninsured is a member of a family making more
than $30,000 a year.
Family Income of the Uninsured
Percent of Uninsured
35%r--------------------------------------------------------------------,
30%
27.7%
25%
20%
15%
10%
5%
0% Under $9,999
$20,000-$29,999
$50,000 & over
$10,000-$19,999
$30,000-$49,999
Family Income
3
Myth #3:
For most of the uninsured, being without health insurance is a short-term,
rather than a long-term, problem.
Reality:
54 percent of those uninsured today will be uninsured for more than two
years. 75 percent will be uninsured for more than a year.!
Some have suggested that being uninsured is a short-term problem, not a long-term condition.
Even short periods of time without insurance do put people at significant financial and health
risk. But being without health insurance is not a short-term problem. A recent study from the
University of Missouri reports that nearly 75 percent of uninsured Americans are "chronically"
uninsured, and will remain uninsured for longer than one year. Less than one in twenty out of
those uninsured today will obtain health coverage before they have been uninsured for five
months.
Distribution of Uninsured, by Time without Coverage
Percent of the Uninsured
60%~-----------------------------------------.
50%
40%
30%
20%
10%
3.5%
o%LJ....L
1-4
5-8
9-12
13-16
17-24
Length of Time without Coverage (Months)
25 or more
4
Myth #4:
The uninsured are mainly young and healthy; they choose not to buy
insurance.
Reality:
Almost one quarter of the uninsured are children. Nearly half of the
uninsured are over 30. Less than 30 percent of the uninsured are between 18
and 30 years of age.
Most of the uninsured are not young, healthy adults, but rather children and persons over 30.
Nevertheless, the young are a disproportionate share of the uninsured, because, with modest
incomes and poor access to affordable coverage, they cannot pay for insurance.
Age of the Uninsured
Percent of the Uninsured
35%,------------------------------------------,
30%
25%
20%
15%
10%
5%
0%
under 18
18-24
30-44
25-29
Age
45-54
55-64
5
Myth #5:
I have health insurance-the uninsured do not affect me.
Reality:
-- Americans who lose their jobs may well become uninsured.
-- Private insurance costs are high because of the uninsured.
-- Taxes are higher because of high Federal health costs.
Nine out of ten Americans with private health insurance receive insurance through employers.
Those who lose their jobs for an extended period of time may well lose their health insurance.
In addition, the uninsured place a large direct burden on those who do have insurance -- through
higher taxes and through higher private insurance premiums. The effects of a large uninsured
popUlation go well beyond the individuals without coverage. The uninsured do receive health
care -- often in emergency rooms, at very high costs. Hospitals, doctors and other providers raise
the fees they charge those who have private insurance in order to cover the bill for the inefficient,
high-cost services received by the uninsured.
The lack of private health insurance for some raises taxes for all. Some say the obvious solution
is to cut, or "cap," Medicare and Medicaid. But cutting these programs puts pressure on doctors,
hospitals and other providers to raise the fees they charge those with private insurance. As
government programs pay less, everyone else pays more.
According to the Congressional Budget Office, unreimbursed costs for hospitals alone totaled
over $28 billion in 1991. As a result, private payers are charged substantially more by hospitals
than the actual cost of their services.
Hospitals' Unreimbursed Costs, 1981-1991
Percentage of Hospitals' Total Costs
14%
12%
10%
8%
6% ~-------L-------L------1~98=7~--~1=98~9~--~1~991
1981
1983
1985
6
Myth #6:
An employer mandate is not necessary to fix the health care system, or to
decrease the number 0/ uninsured.
Reality:
The United States has an employment-based health care system. The major
cause of increasing numbers of uninsured is employers not providing
coverage.
According to the March 1993 Current Population Survey, nine out of ten of the nonelderly who
purchase private insurance obtain it through the workplace.
Recent increases in the number of uninsured can be attributed to a decline in the number of
employers who offer coverage. The share of the nonelderly population with employment-based
coverage declined from 66.8 percent in 1988 to 62.S percent in 1992. This fall was partly offset
by a rise in the number of nonelderly Americans with publicly-financed health insurance -- from
12.4 percent to 15.1 percent. Even with this boost in publicly-financed coverage, the share of the
non-elderly who are uninsured grew from 15.9 percent of the population in 1988 to 17.4 percent
in 1992.
Source of Private Health Insurance, 1992
Employment Based
89.6%
Other Private
10.4%
7
Conclusion
F or millions of Americans with health insurance, the fear of losing their health coverage is a
constant source of insecurity: over 38 million Americans were uninsured at some point in time
in 1992.
Universal coverage is a universal issue. It is not simply about the unemployed, the poor, or the
young and healthy. Hard-working Americans are disadvantaged by today's health care system,
and have the most to gain by reform that includes universal coverage. Today, the statistics show
that the poor and elderly are covered by government programs, while millions of working
Americans and their families are uninsured. Universal coverage is essential to strengthen the
link between work and security.
It makes sense to build on the employer-based system. Most people today with private insurance
obtain it through their employer -- it is a system that works for the vast majority of Americans.
With universal coverage, small business will not be disadvantaged compared to large businesses,
and those who purchase insurance will no longer pay more than their fair share.
NOTES
Unless otherwise indicated, all numbers come from the March 1993 Census Population Survey.
All CPS numbers refer to the non-elderly population (less than 65 years of age).
Whither the Health Care Crises? Misinterpretations a/Chronically Uninsured Estimates,
Timothy McBride, University of Missouri-St. Louis, April 1994.
1.
Section II
Estimation Procedures for Allocation of Uninsured
Across Congressional Districts
Estimation Procedures
Estimated Distribution Across States and Congressional
Districts of Uninsured Persons Under 65
This state-by-state and district-by-district analysis provides an estimate of the
numbers of persons, persons in working families, and children under 18 without health
insurance in 1992. The results are based on responses to the Current Population Survey
(CPS) for March 1993. We define working families as those families (including unrelated
individuals) in which either the reference person or spouse (where applicable) worked
during 1992. All our counts of the uninsured refer only to persons under 65 years of age.
The distributions of uninsured persons were derived as follows:
1.
The Bureau of the Census provided CPS estimates for each state and the District of
Columbia of the numbers and percentages of persons and children not covered by
health insurance (including private insurance, Medicare, Medicaid, or other
insurance) during 1992.
2.
Regression analysis at the individual level was used to estimate the relationship
between the probability of being uninsured and a set of economic and demographic
variables. The regressions employed individual, family, and household data from
the CPS. The variables in the regressions included age, race, Hispanic origin,
household income, age of household head, household composition (e.g., married
couple with children), tenure status (owner or renter), counts of household members
by industry, class of work (Le., private wage-and-salary, government, self-employed)
and educational attainment, family poverty and work status, and state location.
3.
The regression coefficients were used to estimate uninsured percentages for each
congressional district, using district-level data from the 1990 Census. These
percentages were then adjusted within each state so that the estimated total
numbers of uninsured persons, persons in working families, and children in the state
equalled the corresponding values taken from the 1993 CPS.
Caveats:
The estimates are subject to the usual qualifications with respect to
predictions from multiple regression analysis. That is, the coefficients
obtained from the regressions are subject to error, and do not necessarily
reflect all the factors influencing the insurance coverage rate at the district
level. Furthermore, the CPS state-level coverage rates are themselves
subject to sampling error, particularly the rates for children.
Office of Economic Policy, Department of the Treasury, July 19, 1994
Section III
Uninsured, Uninsured in Working Families, and
Uninsured Children by Congressional District
United States
Total
State
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Percent
694
84
541
479
5,937
412
255
79
108
2,656
1,222
70
172
1,536
609
294
269
532
932
141
544
601
922
347
513
724
77
147
550
76
488
416
5,052
343
206
72
83
2,324
1,016
57
149
1,232
532
276
246
389
724
125
461
491
738
314
434
607
68
135
79.3
90.5
90.2
86.8
85.1
83.3
80.8
91.1
76.9
87.5
83.1
81.4
86.6
80.2
87.4
93.9
91.4
73.1
77.7
88.7
84.7
81.7
80.0
90.5
84.6
83.8
88.3
91.8
177
16
117
158
1,319
81
44
16
16
591
338
14
53
331
121
69
61
129
233
31
78
137
189
46
141
175
12
38
United States
Total
State
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Percent
292
145
997
237
81.2
84
127
831
249
87.6
83.4
83.8
80.1
31
192
77
297
2,352
917
1,884
771
84.1
51
46
90.2
1,218
82.6
87.3
88.3
76.9
200
79.8
15
463
204
9
279
198
Oklahoma
701
1,006
612
Oregon
393
347
Pennsylvania
1,038
Rhode Island
89
798
71
South Carolina
615
497
80.8
113
South Dakota
Tennessee
106
681
3,839
92
553
3,233
86.8
81.2
84.2
33
133
972
Utah
Vermont
204
184
90.2
56
49
87.5
65
6
Virginia
889
740
83.2
150
Washington
505
461
91.3
122
West Virginia
271
207
76.4
61
Wisconsin
457
407
89.1
119
56
51
91.1
16
37,066
31,057
83.8
8,335
Texas
Wyoming
Total
65
Alabama
Total
District
1
2
3
4
5
6
7
Total
Percent
Re resentative
Sonny Callahan
Terry Everett
Glen Browder
Tom Bevill
Bud Cramer
Spencer Bachus
Earl F. Hilliard
102
97
102
101
91
85
116
694
80
78
81
80
73
68
90
550
79.0
79.7
79.0
79.4
80.2
80.6
77.5
79.3
28
25
26
25
20
17 .
36
177
Alaska
Total
District
1
Re resentative
Don Young
Percent
84
76
90.5
16
~rizona
Total
District
1
2
3
4
5
6
Total
Re resentative
Sam Coppersmith
Ed Pastor
Bob Stump
Jon Kyl
Jim Kolbe
Karan English
Percent
86
129
78
77
84
87
541
80
113
71
72
75
77
488
93.3
87.3
90.6
93.3
90.1
88.6.
90.2
15
36
16
13
15
21
117
Arkansas
Total
District
1
2
3
4
Total
Re resentative
Blanche M. Lambert
Ray Thornton
Tim Hutchinson
Jay Dickey
Percent
126
114
118
120
479
109
100
104
104
416
86.1
87.6
87.6
86.1
85.1
45
35
37
41
158
California
Total
District
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Uninsured
Children
Re resentative
Dan Hamburg
Wally Herger
Vic Fazio
John T. Doolittle
Robert T. Matsui
Lynn Woolsey
George Miller
Nancy Pelosi
Ronald V. Dellums
Bill Baker
Richard W. Pombo
Tom Lantos
Fortney Pete Stark
Anna G. Eshoo
Norman Y. Mineta
Don Edwards
Sam Farr
Gary A. Condit
Richard H. Lehman
Calvin M. Dooley
Bill Thomas
Michael Huffington
Elton Gallegly
Anthony C. Beilenson
Howard P. McKeon
Howard L. Berman
Carlos J. Moorhead
David Dreier
Henry A. Waxman
Xavier Becerra
Percent
101
102
105
91
108
90
100
120
111
77
114
99
102
88
86
126
118
121
117
163
109
109
108
91
91
149
105
103
95
179
86
85
90
78
91
78
86
102
93
68
96
86
89
77
76
108
100
101
99
133
92
93
94
80
79
127
91
89
81
150
85.0
83.5
85.2
86.0
84.4
87.0
85.9
85.0
83.8
87.8
84.0
87.3
87.0
87.4
87.8
85.6
84.8
83.9
84.6
81.4
84.6
85.3
86.8
87.5
86.7
85.5
85.9
86.7
85.8
84.0
22
23
23
18
23
15
21
17
20
13
28
16
20
13
13
30
27
33
29
54
28
21
24
14
18
37
19
22
10
43
California
District
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Total
Re resentative
Matthew G. Martinez
Julian C. Dixon
Lucille Roybal-Allard
Esteban Edward Torres
Maxine Waters
Jane Harman
Walter R. Tucker '"
Steve Hom
Ed Royce
Jerry Lewis
Jay Kim
George E. Brown, Jr.
Ken Calvert
Alfred A. McCandless
Dana Rohrabacher
Robert K. Dornan
Christopher Cox
Ron Packard
Lynn Schenk
Bob Filner
Randy Cunningham
Duncan Hunter
Percent
159
131
197
144
150
92
149
113
104
103
111
120
107
111
99
150
86
94
101
139
90
110
5,937
134
110
163
122
124
80
123
96
91
86
96
102
91
94
86
128
75
81
85
115
79
94
5,052
83.8
84.1
82.7
84.9
82.9
87.2
82.4
85.2
87.0
83.9
86.3
84.9
85.5
84.6
87.3
85.4
87.7
85.9
84.3
82.9
87.3
85.2
85.1
44
28
51
39
43
13
46
23
20
25
27
33
26
28
16
38
14
19
13
38
17
25
1,319
Colorado
Total
District
1
2
3
4
5
6
Total
Uninsured in
Working Families
Re resentative
Patricia Schroeder
David E. Skaggs
Scott Mcinnis
Wayne Allard
Joel Hefley
Dan Schaefer
Uninsured
Children
Percent
80
63
79
76
58
55
412
66
53
65
64
48
48
343
81.6
85.3
82.1
83.3
82.3
86.0
83.3
16
11
18
17
11
9
81
connecticut
District
1
2
3
4
5
6
Total
Re resentative
Barbara B. Kennelly
Sam Gejdenson
Rosa L. Delauro
Christopher Shays
Gary A. Franks
Nancy L. Johnson
Percent
46
41
44
43
40
39
255
37
33
36
35
33
32
206
80.0
80.4
80.4
80.2
81.6
82.3
80.8
9
7
8
7
7
6
44
Delaware
Total
)istrict
1
Re resentative
Michael N. Castle
Percent
79
72
91.1
16
District of Columbia
Total
District
1
Re resentative
Eleanor Holmes Norton
108
Uninsured in
Working Families
Percent
83
76.9
16
Florida
District
Re resentative
1 Earl Hutto
2
Pete Peterson
3 Corrine Brown
4 Tillie Fowler
5 Karen L. Thurman
6 Cliff Stearns
7 John L. Mica
8 Bill McCollum
9 Michael Bilirakis
10 C.W. Bill Young
11
Sam Gibbons
12 Charles T. Canady
13 Dan Miller
14 Porter J. Goss
15 Jim Bacchus
16 Tom Lewis
17 Carrie Meek
Ileana Ros-Lehtinen
18
19 Harry A. Johnston
20
Peter Deutsch
21
Lincoln Diaz-Balart
E. Clay Shaw, Jr.
22
23 Alcee L. Hastings
Total
Percent
113
119
137
105
105
108
108
119
100
103
128
116
94
100
103
99
153
160
88
105
161
95
138
2,656
99
104
119
92
92
94
95
105
88
90
112
102
82
88
91
87
132
140
78
93
141
83
120
2,324
87.3
87.4
86.8
87.9
87.0
87.4
88.0
87.9
87.9
87.7
87.6
87.5
87.7
87.6
87.7
87.8
86.8
87.1
88.1
88.0
87.5
87.6
87.2
87.5
26
28
39
21
21
25
23
24
20
20
28
29
18
20
21
21
46
35
17
21
39
14
37
591
Total
District
1
2
3
4
S
6
7
8
9
10
11
Total
Re resentative
Jack Kingston
Sanford Bishop
Mac Collins
John Linder
John Lewis
Newt Gingrich
George Darden
J. Roy Rowland
Nathan Deal
Don Johnson
Cynthia McKinney
Percent
113
132
10S
99
120
87
110
112
112
112
120
1,222
91
101
89
87
96
78
94
93
96
93
98
1,016
80.1
76.7
8S.3
88.7
80.2
89.1
32
44
29
21
31
20
8S.0
83.2
8S.2
83.2
81.S
83.1
30
33
30
30
37
338
Hawaii
District
1
2
Total
Re resentative
Neil Abercrombie
Patsy T. Mink
Percent
32
27
81.7
5
38
70
30
81.2
9
57
81.4
14
daho
Total
listrict
1
2
Total
Re resentative
Larry LaRocco
Michael D. Crapo
Percent
84
88
172
73
76
149
86.6
86.6
86.6
25
28
53
Illinois
Total
District
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
Percent
Re resentative
Bobby L. Rush
Mel Reynolds
William O. Lipinski
Luis V. Gutierrez
Dan Rostenkowski
Henry J. Hyde
Cardiss Collins
Philip M. Crane
Sidney R. Yates
John Edward Porter
George E. Sangmeister
Jerry F. Costello
Harris W. Fawell
J. Dennis Hastert
Thomas W. Ewing
Donald Manzullo
Lane Evans
Robert H. Michel
Glenn Poshard
Richard J. Durbin
89
85
69
142
80
61
92
57
80
55
72
79
50
70
79
70
80
72
79
76
1,536
68
67
56
111
65
51
70
47
64
45
58
62
42
57
64
58
64
58
63
62
1,232
77.2
78.4
81.6
77.8
81.4
82.7
76.3
83.1
80.9
81.9
81.1
78.9
83.0
82.1
80.3
82.0
80.5
81.1
79.7
80.7
80.2
22
22
13
36
12
10
24
10
13
9
16
18
10
15
16
15
18
15
18
17
331
"diana
Total
)istrict
1
2
3
4
5
6
7
8
9
10
Total
Re resentative
Peter J. Visclosky
Philip R. Sharp
Timothy J. Roemer
Jill L. Long
Steve Buyer
Dan Burton
John T. Myers
Frank McCloskey
Lee H. Hamilton
Andrew Jacobs, Jr.
Percent
62
63
61
59
60
46
61
63
62
70
609
54
55
53
52
53
41
53
55
55
61
532
86.8
87.1
87.6
88.0
87.4
88.6
87.2
86.9
87.4
86.9
87.4
13
12
12
12
13
7
11
12
13
15
121
Iowa
Total
Oistrict
1
2
3
4
5
Total
Re resentative
James A. Leach
Jim Nussle
Jim Lightfoot
Neal Smith
Fred Grandy
53
61
60
56
63
294
50
58
57
53
59
276
94.4
93.8
94.1
93.6
93.4
93.9
10
16
14
12
17
69
Jistrict
1
2
3
4
Total
Re resentative
Pat Roberts
Jim Slattery
Jan Meyers
Dan Glickman
Percent
76
69
58
66
269
69
63
53
60
246
91.2
91.4
91.8
91.5
91.4
20
16
10
15
61
Total
District
1
2
3
4
5
6
Total
Re resentative
Tom Barlow
William H. Natcher
Romano L. Mazzoli
Jim Bunning
Harold Rogers
Scotty Baesler
Percent
91
90
84
85
93
88
532
66
67
63
64
62
67
389
72.8
74.0
75.4
75.1
66.8
75.3
73.1
22
23
18
21
26
19
129
Louisiana
Total
Jistrict
1
2
3
4
5
6
7
Total
Re resentative
Bob Livingston
William J. Jefferson
W.J. Tauzin
Cleo Fields
Jim McCrery
Richard H. Baker
James A. Hayes
Percent
123
147
131
150
127
123
131
932
99
110
103
111
101
98
103
724
80.9
75.2
78.2
73.9
79.1
79.1
78.5
77.7
27
38
34
42
30
28
33
233
Maine
Total
District
1
2
Total
Re resentative
Thomas H. Andrews
Olympia J. Snowe
Percent
68
73
141
61
64
125
89.2
88.2
88.7
14
17
31
Total
District
1
2
3
4
5
6
7
8
Total
Re resentative
Wayne T. Gilchrest
Helen Delich Bentley
Benjamin L. Cardin
Albert R. Wynn
Steny H. Hoyer
Roscoe G. Bartlett
Kweisi Mfume
Constance A. Morella
Percent
73
63
69
70
57
69
93
50
544
62
54
59
60
49
59
75
43
461
84.9
85.6
84.8
85.8
86.2
85.3
80.6
87.1
84.7
11
8
10
10
6
10
17
5
78
Massachusetts
Total
District
Re resentative
1
2
John W. Olver
Richard E. Neal
Peter I. Blute
Barney Frank
Martin T. Meehan
Peter G. Torkildsen
Edward J. Markey
Joseph P. Kennedy II
John Joseph Moakley
Gerry E. Studds
3
4
5
6
7
8
9
10
Total
Percent
64
63
59
56
57
55
55
78
59
55
601
52
52
48
46
47
45
46
60
48
46
491
81.3
81.6
82.5
82.2
82.2
83.3
83.4
77.3
82.0
83.0
81.7
16
17
14
13
14
11
10
16
13
12
137
Total
District
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Total
Re resentative
Bart Stupak
Peter Hoekstra
Vern Ehlers
Dave Camp
James A. Barcia
Fred Upton
Nick Smith
Bob Carr
Dale E. Kildee
David E. Bonior
Joseph Knollenberg
Sander M. Levin
William D. Ford
John Conyers, Jr.
Barbara-Rose Collins
John D. Dingel/
64
61
58
62
62
62
58
53
55
50
37
48
53
68
81
51
922
Uninsured in
Working Families
Percent
51
50
48
49
49
51
47
43
44
41
31
40
43
51
57
42
738
80.0
81.9
82.9
79.9
79.4
81.2
81.1
82.2
80.2
82.6
84.3
83.1
82.1
75.6
70.2
81.6
80.0
14
14
12
13
14
13
12
9
10
8
6
7
8
17
22
9
189
Minnesota
Total
District
1
2
3
4
5
6
7
8
Total
Percent
Re resentative
Timothy J. Penny
David Minge
Jim Ramstad
Bruce F. Vento
Martin Olav Sabo
Rod Grams
Collin C. Peterson
James L. Oberstar
49
51
25
42
48
28
57
47
347
45
47
23
38
43
26
50
42
314
91.0
91.2
93.6
90.6
89.3
93.2
89.2
88.7
90.5
7
8
3
4
4
4
10
7
46
Uninsure
Children
Total
District
1
2
3
4
5
Total
Percent
Re resentative
Jamie L. Whitten
Bennie Thompson
G.V. Montgomery
Mike Parker
Gene Taylor
101
113
100
101
98
513
87
94
85
85
83
434
85.7
83.1
85.3
84.6
84.4
84.6
26
37
26
27
25
141 .
Missouri
Total
District
1
2
3
4
5
6
7
8
9
Total
Percent
Re resentative
William Clay
James M. Talent
Richard A. Gephardt
Ike Skelton
Alan Wheat
Pat Danner
Mel Hancock
Bill Emerson
Harold L. Volkmer
86
57
73
84
83
80
88
91
82
724
71
49
62
70
70
68
74
74
69
607
82.3
86.4
85.1
83.3
84.0
84.8
83.8
81.8
84.4
83.8
22
12
15
21
19
19
22
25
20
175
Montana
District
1
Re resentative
Pat Williams
77
68
88.3
12
Nebraska
Total
District
1
2
3
Total
Re resentative
Doug Bereuter
Peter Hoagland
Bill Barrett
50
43
55
147
45
39
50
135
91.7
92.5
91.5
91.8
12
9
17
38
Nevada
District
Re resentative
1
2
James H. Bilbray
Barbara F. Vucanovich
Total
153
139
292
124
113
237
81.0
81.4
81.2
43
40
84
New Ham shire
Total
District
1
2
Total
Percent
Re resentative
Bill Zeliff
Dick Swett
72
73
145
63
64
127
87.6
87.6
87.6
15
16
31
District
1
2
3
4
5
6
7
8
9
10
11
12
13
Total
Re resentative
Robert E. Andrews
William J. Hughes
Jim Saxton
Christopher H. Smith
Marge Roukema
Frank Pallone, Jr.
Bob Franks
Herbert C. Klein
Robert G. Torricelli
Donald M. Payne
Dean A. Gallo
Dick Zimmer
Robert Menendez
81
82
65
71
60
75
64
85
79
101
59
56
118
997
67
68
55
60
52
63
55
71
66
80
51
48
94
831
83.1
82.8
84.4
84.0
85.7
84.3
85.7
83.6
84.0
79.5
86.4
85.5
79.9
83.4
18
18
12
15
10
13
10
17
13
24
9
8
25
192
New Mexico
Total
District
1
2
3
Total
Re resentative
Steven H. Schiff
Joe Skeen
Bill Richardson
Percent
96
103
99
297
82
85
82
249
85.4
82.8
83.4
83.8
22
29
27
77
New York
District
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Re resentative
George J. Hochbrueckner
Rick A. Lazio
Peter T. King
David A. Levy
Gary L. Ackerman
Floyd H. Flake
Thomas J. Manton
Jerrold Nadler
Charles E. Schumer
Edolphus Towns
Major R. Owens
Nydia M. Velazquez
Susan Molinari
Carolyn B. Maloney
Charles B. Rangel
Jose E. Serrano
Eliot L. Engel
Nita M. Lowey
Hamilton Fish, Jr.
Benjamin A. Gilman
Michael R. McNulty
Gerald B. H. Solomon
Sherwood L. Boehlert
John M. McHugh
James T. Walsh
Maurice D. Hinchey
Percent
54
58
49
57
58
83
88
75
67
99
95
141
65
62
123
143
96
65
53
57
65
64
73
73
69
72
46
50
42
49
49
67
71
61
55
72
75
103
53
52
85
94
75
55
45
49
55
54
60
59
58
59
85.4
85.1
86.1
85.2
84.8
80.8
80.9
81.4
82.1
73.3
78.1
72.9
82.2
84.7
69.1
65.7
77.6
84.5
85.3
85.9
84.8
84.8
82.4
80.1
84.3
82.3
9
9
8
9
9
19
16
10
11
26
25
30
12
5
26
36
23
10
8
10
11
12
16
16
14
13
New York
District
27
28
29
30
31
Total
Re resentative
Bill Paxon
Louise M. Slaughter
John J. LaFalce
Jack Quinn
Arno Houghton
63
67
70
74
75
2,352
54
56
59
61
62
1,884
85.6
83.9
83.8
81.7
82.8
80.1
12
13
14
16
17
463
North Carolina
District
1
2
3
4
5
6
7
8
9
10
11
12
Total
Re resentative
Eva Clayton
Tim Valentine
H. Martin Lancaster
David E. Price
Stephen L. Neal
Howard Coble
Charlie Rose
W. G. Hefner
J. Alex McMillan
Cass Ballenger
Charles H. Taylor
Melvin Watt
Percent
92
75
78
66
77
70
78
78
65
73
76
90
917
75
64
65
57
65
61
62
66
56
63
64
75
771
81.1
84.8
82.8
86.1
84.9
86.7
79.2
84.3
86.8
86.4
83.9
83.7
84.1
27
16
18
11
16
13
17
19
12
15
17
22
204
North Dakota .
District
1
Re resentative
Earl Pomeroy
51
46
90.2
9
Ohio
District
Re resentative
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
David Mann
Rob Portman
Tony P. Hall
Michael G. Oxley
Paul E. Gillmor
Ted Strickland
David L. Hobson
John A. Boehner
Marcy Kaptur
Martin R. Hoke
Louis Stokes
John R. Kasich
Sherrod Brown
Tom Sawyer
Deborah Pryce
Ralph Regula
James A. Traficant, Jr.
Douglas Applegate
Eric D. Fingerhut
Total
72
56
62
65
63
70
61
61
66
62
74
65
58
64
63
65
66
68
55
1,218
59
47
51
54
53
56
51
51
55
51
59
54
49
53
52
54
54
56
46
1,006
82.1
83.9
82.5
82.9
83.7
80.7
82.8
83.5
82.5
83.0
80.1
83.1
83.7
82.5
83.3
82.9
81.7
81.6
83.9
82.6
18
12
13
16
16
18
14
14
16
13
19
15
13
14
11
16
16
17
11
279
Total
District
1
2
3
4
5
6
Total
Re resentative
James M. Inhofe
Mike Synar
Bill Brewster
Dave McCurdy
Ernest J. Istook, Jr.
Frank Lucas
114
120
120
114
110
122
701
101
105
104
99
97
106
612
88.1
86.9
86.5
87.0
88.3
87.2
87.3
30
36
35
31
29
36
198
District
1
2
3
4
5
Total
Percent
Re resentative
Elizabeth Furse
Robert F. Smith
Ron Wyden
Peter A. DeFazio
Mike Kopetski
72
82
82
80
77
393
63
73
72
71
68
347
88.2
88.3
88.2
88.4
88.4
88.3
11
15
13
13
13
65
Penns Ivania
Total
District
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Total
Re resentative
Thomas M. Foglietta
Lucien E. Blackwell
Robert A. Borski
Ron Klink
William F. Clinger, Jr.
Tim Holden
Curt Weldon
James C. Greenwood
Bud Shuster
Joseph M. McDade
Paul E. Kanjorski
John P. Murtha
M. Margolies-Mezvinsky
William J. Coyne
Paul McHale
Robert S. Walker
George W. Gekas
Rick Santorum
William F. Goodling
Austin J. Murphy
Thomas J. Ridge
69
58
50
49
54
51
37
36
54
53
53
54
35
54
47
45
47
47
46
48
52
1,038
49
43
38
38
41
39
29
29
42
41
41
40
28
41
37
35
37
36
37
37
40
798
71.8
74.1
76.8
76.8
76.0
78.0
79.2
79.9
77.0
77.2
76.9
75.3
79.8
75.4
78.4
79.2
79.2
77.3
79.1
76.0
76.8
76.9
17
12
10
10
11
10
5
6
12
11
11
12
5
10
8
8
8
8
8
9
11
200
Rhode Island
District
1
2
Total
Re resentative
Ronald K. Machtley
Jack Reed
45
44
89
36
35
71
79.9
79.6
79.8
7
7
15
South Carolina
District
1
2
3
4
5
6
Total
Re resentative
Arthur Ravenel, Jr.
Floyd Spence
Butler Derrick
Bob Inglis
John M. Spratt, Jr.
James E. Clyburn
96
94
100
101
105
119
615
78
76
81
83
85
94
497
80.6
81.3
81.3
82.0
81.0
79.1
80.8
16
16
18
17
20
26
113
South Dakota
Total
District
1
Re resentative
Tim Johnson
106
92
86.8
33
Total
District
1
2
3
4
5
6
7
8
9
Total
Percent
Re resentative
James H. Quillen
John J. Duncan, Jr.
Marilyn Lloyd
Jim Cooper
Bob Clement
Bart Gordon
Don Sundquist
John S. Tanner
Harold E. Ford
77
73
74
80
74
71
69
78
85
681
62
60
60
64
61
59
57
63
67
553
80.4
81.6
80.9
80.6
82.4
83.4
82.2
80.7
79.2
81.2
14
13
14
17
13
14
13
17
19
133
Texas
District
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Re resentative
Jim Chapman
Charles Wilson
Sam Johnson
Ralph M. Hall
John Bryant
Joe Barton
Bill Archer
Jack Fields
Jack Brooks
J. J. Pickle
Chet Edwards
Pete Geren
Bill Sarpalius
Greg Laughlin
E. de la Garza
Ronald D. Coleman
Charles w. Stenholm
Craig A. Washington
larry Combest
Henry B. Gonzalez
lamar S. Smith
Tom Delay
Henry Bonilla
Martin Frost
Michael A. Andrews
Dick Armey
Percent
114
117
90
110
129
94
100
104
112
125
121
122
130
128
173
164
122
137
121
158
105
107
158
130
124
102
96
96
79
94
108
83
88
90
95
107
99
104
109
108
141
134
103
113
103
130
91
92
130
111
106
90
83.8
82.4
88.0
85.5
84.2
87.9
87.6
85.9
84.7
85.3
82.1
85.1
83.8
84.3
81.7
82.0
83.8
82.6
85.5
82.3
86.0
86.6
82.8
85.4
85.7
87.9
28
28
17
26
31
18
20
22
26
24
29
29
33
33
58
49
31
32
30
43
23
23
49
34
29
19
Texas
District
27
28
29
30
Total
Re resentative
Solomon P. Ortiz
Frank Tejeda
Gene Green
Eddie Bernice Johnson
162
161
178
141
3,839
134
133
148
118
3,233
82.5
82.4
83.1
84.0
84.2
50
49
55
34
972
Utah
District
1
2
3
Total
Re resentative
James V. Hansen
Karen Shepherd
Bill Orton
63
66
75
204
57
60
67
184
90.4
90.5
89.8
90.2
20
19
26
65
Vermont
District
1
Re resentative
Bernard Sanders
56
49
87.5
6
District
1
2
3
4
5
6
7
8
9
10
11
Total
Re resentative
Herbert H. Bateman
Owen B. Pickett
Robert C. Scott
Norman Sisisky
Lewis F. Payne, Jr.
Robert W. Goodlatte
Thomas J. Bliley, Jr.
James P. Moran
Rick Boucher
Frank R. Wolf
Leslie L. Byrne
Percent
78
79
101
84
94
89
72
66
93
70
62
889
66
64
82
70
78
74
61
56
76
60
53
740
83.5
82.1
81.5
83.1
83.2
83.2
84.8
84.5
81.6
84.8
85.1
83.2
14
13
21
16
17
15
11
7
17
11
8
150
District
1
2
3
4
5
6
7
8
9
Total
Re resentative
Maria Cantwell
AI Swift
Jolene Unsoeld
Jay Inslee
Thomas S. Foley
Norman D. Dicks
Jim McDermott
Jennifer Dunn
Mike Kreidler
Percent
46
56
56
71
61
56
60
44
56
505
43
51
51
64
55
51
55
40
51
461
91.9
91.4
91.3
90.8
91.0
91.1
91.2
92.0
91.4
91.3
9
14
14
23
16
14
10
9
13
122
District
1
2
3
Total
Representative
Alan B. Mollohan
Robert E. Wise, Jr.
Nick J. Rahall II
Total
Uninsured
(OOO's)
90
90
91
271
Uninsured in
Working Families
(OOO's)
Percent
70
71
66
207
78.0
78.4
72.8
76.4
Uninsured
Children
(OOO's)
19
20
22
61
Wisconsin
District
1
2
3
4
5
6
7
8
9
Total
Re resentative
Peter Barca
Scott L. Klug
Steve Gunderson
Gerald D. Kleczka
Thomas M. Barrett
Thomas E. Petri
David R. Obey
Toby Roth
F. J. Sensenbrenner, Jr.
Percent
49
49
57
49
57
51
54
51
40
457
44
44
50
44
51
45
48
46
36
407
89.2
89.1
88.9
89.1
89.1
89.0
88.9
89.0
89.3
89.1
12
10
16
11
16
13
16
14
9
119
District
1
Representative
Craig Thomas
Total
Uninsured
(OOO's)
56
Uninsured in
Working Families
(OOO's)
Percent
51
91.1
Uninsured
Children
(OOO's)
16
Section IV
Background Data
State
Alabama
District
Under 65 Population
Number
Uninsured
Population
Percent
Uninsured
694
84
18.9
16.8
Under 65, Householder or
Spouse Worlced
Percent
Uninsured
Population
Alaska
AriZona
Arkansas
501
3,135
17.3
2,111
541
479
3,225
464
2,847
22.7
1,846
Califomia
27,930
5.937
21.3
Colorado
2,923
412
14.1
Connecticut
2.822
255
647
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
3,666
17.1
16.4
165
Percent
Uninsured
15.3
9.8
17.1
942
12.4
702
22.5
24,304
8,522
15.5
2,651
12.9
857
9.5
9.0
2,541
8.1
823
5.3
79
12.2
599
12.0
187
8.3
474
108
22.8
373
22.3
125
13.0
11.428
2,656
23.2
10.213
22.8
3,238
18.2
5.740
1,222
21.3
4,958
20.5
1,680
20.1
1.029
939
70
6.8
907
316
4.5
172
18.3
14.5
874
6.3
17.0
337
3,306
2,408
13.4
11.5
11.5
15.7
10.0
8.0
8.7
10.626
9.223
4,619
2,559
2,218
269
12.1
2,093
11.8
532
16.6
2,706
14.4
Louisiana
3.203
3,771
932
24.7
1.118
4,369
141
12.6
3,122
1,009
23.2
Maine
Maryland
544
12.5
3,918
12.4
11.8
Kentucky
Population
1,159
22.5
20.8
1.536
609
294
Iowa
Kansas
Under 18
4,996
12.2
11.5
1,510
794
705
939
1,296
326
8.6
13.8
17.9
1,193
9.6
6.5
Massachusetts
5,050
4,453
11.0
1,294
10.5
8,152
601
922
11.9
Michigan
11.3
7,172
10.3
2,481
7.6
Minnesota
3,840
347
9.0
3,554
8.8
1,070
4.3
Mississippi
2,373
513
2,052
4,511
n4
21.2
15.1
860
1,342
16.4
Missouri
Montana
Nebraska
21.6
16.0
726
1,438
77
657
1,357
10.4
248
4.9
147
10.6
10.2
9.9
465
25.2
14.0
1,028
23.1
336
8.2
24.9
944
297
10.5
1,870
10.2
4,031
13.0
Nevada
1,157
292
New Hampshire
1,038
145
New Jersey
6,739
14.8
5,969
New Mexico
1,377
997
297
13.5
13.9
21.6
1,196
20.8
457
16.9
15.428
2,352
15.2
12,972
14.5
4,345
10.7
5,819
917
15.8
5,225
14.8
1,681
12.2
5.6
NewYorlc
Nolth Carolina
North Dakota
Ohio
531
51
9.6
496
9.3
164
9,815
1,218
12.4
8,701
11.6
3,050
9.1
Oldahoma
Oregon
2,863
2,638
701
24.5
2,564
23.9
933
21.2
393
14.9
785
8.3
10,345
1,038
10.0
2.433
9,052
14.3
Pennsylvania
8.8
2,996
6.7
Rhode Island
830
10.7
18.7
717
2,810
9.9
17.7
208
1,042
7.0
10.8
17.2
572
16.1
207
15.8
15.5
3,740
14.8
1,2n
10.5
South Carolina
3,286
South Dakota
Tennessee
4,388
89
615
106
681
Texas
15,509
3,839
24.8
13,870
23.3
4,856
20.0
Utah
1,605
204
12.7
1,511
12.2
648
10.0
537
56
10.4
488
10.0
156
4.0
Virginia
5,654
889
15.7
5,195
14.2
1,548
9.7
Washington
4,467
505
11.3
4,169
11.1
1,310
9.3
West Virginia
1,516
271
17.9
1,211
17.1
14.1
Wisconsin
4,501
10.2
4,173
9.8
421
457
56
433
1,475
13.3
403
12.7
148
10.6
223.371
37,067
16.6
197,615
15.7
67,106
12.4
Vermont
Wyoming
Total
616
Page 1 of 9
8.0
State
Alabama
District
1
Alabama
Alabama
Alabama
2
3
Alabama
Under 65 Population
Number
Uninsured
Population
102
526
Under 65, Householder or
Spouse Worked
Percent
Uninsured
19.4
523
97
18.6
524
102
19.5
4
513
101
5
534
91
Alabama
6
529
85
16.0
Alabama
7
518
116
22.4
Alaska
o
501
84
16.8
Arizona
1
546
86
15.7
Arizona
2
3
4
5
6
543
482
533
129
Arizona
78
Arizona
Arizona
Arizona
Arkansas
Arkansas
Arkansas
Arkansas
California
California
California
California
511
Population
460
Percent
Uninsured
17.5
Under 18
Population
178
Percent
Uninsured
15.7
16.8
169
14.8
17.6
17.8
162
159
15.8
19.7
463
458
452
17.0
475
15.3
157
12.9
473
14.5
148
11.7
444
20.2
186
19.2
464
16.4
165
9.8
513
15.6
147
10.3
23.9
476
23.8
189
19.1
16.2
437
16.2
147
11.0
n
14.4
140
9.0
84
500
461
14.4
16.4
16.3
139
11.1
521
87
16.7
1
527
126
24.0
460
456
2
3
4
543
525
21.0
479
22.6
516
114
118
120
464
447
1
2
3
4
524
101
19.2
507
533
102
23.3
16.1
16.7
180
11.8
23.8
185
24.3
20.8
22.4
173
20.1
168
22.2
23.2
176
23.3
18.9
164
13.2
20.1
453
430
19.9
163
14.0
105
19.8
463
19.4
168
13.7
527
91
17.2
460
17.0
159
11.2
533
108
20.2
19.9
168
13.9
10.9
California
5
6
521
90
17.2
457
462
7
539
100
18.5
472
16.9
18.2
140
California
166
12.5
California
8
9
10
11
519
120
23.1
450
22.6
101
16.3
530
111
21.0
451
14.6
77
114
14.4
480
20.7
14.1
139
537
154
8.3
21.3
457
21.0
15.3
12.7
10.2
California
California
California
California
California
California
12
13
California
14
535
516
99
19.1
461
18.7
544
102
484
18.3
88
18.7
16.6
184
127
161
473
16.3
125
12.6
California
15
531
543
86
15.8
488
15.5
141
9.5
California
16
557
126
22.6
488
22.1
179
16.7
California
17
536
118
22.1
464
21.7
166
16.1
California
121
22.4
459
22.1
117
21.9
460
21.5
198
185
16.7
California
18
19
California
20
163
29.7
455
29.1
220
24.4
California
21
538
534
549
535
109
20.4
460
20.1
22
523
109
20.8
4S5
20.4
191
143
14.6
California
California
23
481
19.5
175
13.9
24
17.0
477
16.7
134
10.7
California
25
556
108
91
91
19.9
California
543
533
16.4
491
16.1
174
10.5
California
26
552
149
26.9
484
26.3
178
21.0
15.9
14.5
California
27
523
458
19.7
140
13.9
28
534
105
103
20.1
California
19.3
474
18.9
164
13.2
California
29
30
503
95
18.8
440
18.5
552
179
32.4
475
31.6
82
173
24.9
23.4
California
12.0
California
31
547
469
28.5
187
532
24.6
456
24.1
151
18.4
560
197
35.3
474
34.4
205
24.9
Califomia
32
33
34
159
131
29.1
California
548
144
26.2
476
25.6
188
20.5
Califomia
35
555
150
469
26.5
200
21.5
Califomia
36
92
480
16.7
122
10.6
Califomia
37
539
558
27.1
17.1
149
26.7
469
26.2
217
21.3
California
Page 2 of 9
Under 65, Householder or
Spouse Worked
Under 65 Population
Number
Uninsured
Percent
Uninsured
Under 18
20.9
Population
151
Percent
Uninsured
15.0
18.6
158
13.0
19.1
183
13.5
19.3
190
14.0
481
21.2
210
16.0
19.5
4n
19.2
187
13.8
111
22.5
423
22.1
170
16.5
538
99
18.4
481
18.0
132
12.0
150
26.8
488
26.2
182
20.9
47
558
535
86
16.0
479
15.7
1<43
9.8
Califomia
48
·538
94
17.5
470
17.2
161
11.5
Califomia
49
527
101
19.2
450
19.0
103
12.7
Califomia
50
465
24.8
193
19.6
51
16.9
474
16.6
154
10.7
Califomia
52
20.5
465
20.1
174
14.5
Colorado
1
470
17.1
417
15.7
124
12.5
Colorado
2
499
139
90
110
80
63
25.2
Califomia
551
532
536
12.6
463
11.5
141
7.8
Colorado
473
79
16.7
422
15.3
145
12.4
Colorado
3
4
482
76
15.8
<437
14.5
152
11.5
Colorado
5
502
11.7
154
7.1
6
498
11.1
445
466
10.8
Colorado
Connecticut
Connecticut
Connecticut
58
55
10.2
142
6.2
1
466
480
465
468
46
10.0
416
8.9
137
6.5
41
8.6
428
7.8
139
4.8
44
9.5
417
8.5
<43
9.2
418
8.3
40
39
8.5
<431
7.7
8.4
431
7.5
133
134
144
136
Population
Population
State
Califomia
District
38
530
113
21.3
Califomia
39
546
104
19.1
460
486
Califomia
40
531
103
19.4
452
Califomia
41
565
111
19.7
498
Califomia
42
556
120
21.6
Califomia
43
548
107
Califomia
44
491
Califomia
45
Califomia
46
Califomia
Connecticut
Connecticut
Connecticut
2
3
4
5
474
6
Percent
Uninsured
5.9
5.5
4.7
4.5
o
469
647
79
12.2
599
12.0
187
8.3
98
474
108
22.8
373
22.3
125
13.0
Florida
1
20.9
478
20.6
161
16.0
119
22.1
479
21.7
162
17.1
534
137
25.7
473
25.2
183
21.0
Florida
2
3
4
539
538
113
Florida
523
468
19.6
1<43
14.7
5
453
23.3
400
22.9
116
18.0
Florida
6
21.6
444
21.2
152
16.5
Florida
7
21.0
462
20.6
1<43
15.7
Florida
119
22.0
486
21.5
142
16.8
Florida
8
9
G9
514
540
105
105
108
108
20.0
Florida
4n
100
428
15.7
10
449
103
403
20.6
22.4
129
Florida
21.1
22.9
112
17.4
Florida
535
128
23.9
479
23.4
148
18.7
Delaware
District of Columbia
Florida
Florida
11
12
23.1
450
22.6
161
18.1
13
504
420
116
Florida
94
22.3
376
21.8
110
16.8
Florida
14
452
100
22.1
404
21.6
121
16.7
Florida
15
.95
20.9
4f43
20.5
137
15.5
Florida
16
462
21.3
.15
20.9
130
16.0
Florida
17
s..9
103
99
153
160
27.8
486
27.3
194
23.5
31.9
Florida
18
502
Florida
19
<437
Florida
20
Florida
127
27.2
20.2
449
394
31.1
19.7
113
14.6
510
88
105
20.6
459
20.2
138
15.3
21
548
161
29.4
492
28.7
156
24.9
Florida
22
.18
95
22.7
374
22.2
81
17.0
Florida
23
530
138
26.0
472
25.4
176
21.2
Georgia
517
113
21.9
426
21.2
156
20.7
Georgia
2
513
132
25.7
24.9
171
25.8
Georgia
3
526
105
19.9
405
465
19.2
158
18.1
Page 3 of 9
Under 65 Population
Number
Uninsured
Population
99
535
Percent
Uninsured
18.4
Under 65, Householder or
Spouse Worked
Percent
Uninsured
Population
493
17.7
Under 18
Population
137
State
Georgia
District
4
Georgia
5
6
7
8
9
518
547
516
120
23.2
428
22.5
87
15.9
21.4
505
455
15.4
141
144
20.7
152
514
112
21.7
510
112
442
450
Georgia
10
112
Georgia
Hawaii
11
1
Hawaii
2
1
2
522
521
507
522
22.0
21.4
Georgia
Georgia
Georgia
Georgia
Idaho
Idaho
465
474
110
120
32
38
84
88
89
85
23.1
69
142
13.5
25.4
15.5
Illinois
3
Illinois
Illinois
4
5
522
550
509
561
516
Illinois
6
536
61
Illinois
7
8
9
10
11
547
92
Illinois
Illinois
Illinois
Illinois
Illinois
Illinois
Illinois
2
563
57
508
80
544
55
72
79
50
70
79
70
80
Illinois
13
527
525
561
Illinois
14
552
Illinois
15
529
12
Illinois
16
534
Illinois
17
Illinois
Illinois
18
19
507
522
Illinois
20
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
2
3
4
5
6
7
8
Indiana
9
Indiana
10
1
2
3
4
5
1
2
3
4
1
Iowa
Iowa
Iowa
Iowa
Iowa
Kansas
Kansas
Kansas
Kansas
Kentucky
Kentucky
Kentucky
Kentucky
80
502
511
503
493
498
503
495
n
79
76
62
63
61
59
60
507
46
501
492
498
61
63
62
70
6.4
7.2
18.2
18.5
17.0
15.5
Percent
Uninsured
15.7
21.9
14.2
20.0
20.4
20.8
21.0
160
21.2
20.8
145
149
20.0
439
448
459
432
442
22.3
168
22.4
5.9
6.6
138
178
3.5
5.2
16.9
158
17.2
179
431
462
448
473
15.9
14.5
172
191
15.5
15.9
12.9
11.5
12.5
145
211
116
17.3
10.7
449
455
23.4
14.3
11.4
16.8
480
10.5
445
15.8
10.1
15.7
506
444
9.4
14.5
10.0
13.6
478
15.0
444
9.0
12.7
15.0
501
490
9.3
12.7
14.0
8.3
458
13.9
13.1
15.8
13.7
15.7
14.9
12.4
474
441
12.2
14.6
461
11.7
152
185
170
117
163
1n
168
178
184
155
175
161
8.8
6.4
12.8
5.8
10.8
5.8
9.2
10.7
5.8
8.1
10.5
8.5
11.4
457
12.7
168
9.1
431
445
460
454
462
471
458
476
14.6
13.8
160
164
159
143
152
164
11.5
157
8.1
4.7
12.2
12.9
12.5
13.8
461
11.6
451
12.2
11.8
12.8
12.2
11.7
12.2
9.2
461
11.8
12.1
11.6
11.0
11.5
8.6
152
141
137
10.5
8.3
8.6
8.0
7.4
8.0
8.8
156
149
8.5
157
6.5
10.0
502
506
53
61
13.1
10.0
12.1
476
12.1
162
9.7
505
60
11.9
476
11.9
152
522
56
10.8
490
10.8
9.3
7.6
495
63
76
69
12.7
14.3
12.5
465
12.6
158
165
504
13.8
12.1
178
172
11.2
9.0
6.0
506
532
533
552
577
466
518
9.8
10.4
58
10.1
545
9.8
174
556
66
11.9
525
11.5
181
8.3
518
91
17.5
436
15.1
14.9
90
84
85
16.6
464
14.4
16.0
15.9
458
467
13.8
151
164
146
13.7
162
12.8
2
542
3
526
4
538
Page 4 of 9
13.9
12.7
Under 65 Population
Number
Uninsured
Population
93
538
Percent
Uninsured
Under 65, Householder or
Spouse Worked
Percent
Population
Uninsured
410
15.2
Under 18
170
Percent
Uninsured
15.2
541
88
16.4
471
14.1
147
13.2
534
123
23.0
461
21.5
166
16.0
539
147
27.2
25.6
187
551
131
23.8
430
458
22.4
198
20.2
17.2
537
150
27.9
421
26.3
199
21.0
528
127
24.1
444
22.6
176
17.2
Louisiana
5
6
541
123
22.8
455
21.4
1n
16.1
Louisiana
7
541
131
24.2
452
22.7
192
17.4
11.8
13.5
State
Kentucky
District
5
Kentucky
6
Louisiana
Louisiana
Louisiana
Louisiana
Louisiana
2
3
4
526
11.5
167
8.3
483
481
486
13.3
11.0
12.9
13.0
475
12.3
12.4
515
11.7
159
146
144
142
155
10.1
513
9.6
152
4.1
69
12.7
489
12.0
154
6.8
539
93
17.2
455
16.4
154
10.8
549
50
9.1
504
8.6
503
12.7
440
11.7
146
138
12.0
12.6
Maine
1
580
68
Maine
2
538
73
Maryland
Maryland
1
536
73
2
538
3
4
531
5
6
566
63
69
70
57
542
Maryland
7
Maryland
8
Massachusetts
1
Maryland
Maryland
Maryland
Maryland
17.3
Population
568
13.6
11.7
11.1
7.7
5.7
7.0
6.5
3.6
Massachusetts
2
502
64
63
141
12.0
3
505
59
11.6
442
449
11.7
Massachusetts
10.8
137
10.3
Massachusetts
4
504
56
11.2
446
10.4
134
9.6
Massachusetts
5
523
57
462
10.1
6
7
8
9
55
55
453
446
10.0
Massachusetts
505
496
149
129
9.2
Massachusetts
10.8
10.8
10.3
111
9.2
523
499
491
78
434
103
123
129
151
15.1
Massachusetts
Massachusetts
Massachusetts
Michigan
10
1
488
507
14.9
11.8
441
13.9
10.9
55
64
11.3
440
10.5
13.0
427
61
12.0
456
11.3
471
11.9
10.9
10.3
12.2
443
12.3
59
Michigan
2
Michigan
Michigan
3
4
507
Michigan
5
504
Michigan
6
508
Michigan
7
8
9
10
11
508
58
62
62
62
58
526
Michigan
Michigan
Michigan
Michigan
11.1
8.9
10.4
9.6
9.5
168
8.3
166
7.3
11.2
157
8.5
436
11.2
164
8.6
12.3
453
11.2
155
8.4
11.4
451
10.4
158
7.4
53
10.0
473
9.2
151
5.7
526
55
10.5
458
9.6
509
50
9.8
459
8.9
162
148
6.4
5.4
4.5
516
507
37
7.3
466
6.7
138
505
48
9.5
460
8.7
529
53
10.0
474
9.1
140
140
5.0
Michigan
12
13
Michigan
14
512
68
13.2
420
12.2
173
10.0
Michigan
15
16
497
81
16.3
3n
15.1
10.2
448
9.3
471
10.4
439
10.1
4.9
463
51
11.0
435
504
25
4.9
4n
10.7
4.9
136
144
136
2.5
482
42
444
8.6
125
2.9
474
48
8.8
10.2
10.0
103
4.1
518
28
5.3
430
489
5.3
151
2.5
464
57
12.2
424
11.9
140
6.9
Minnesota
1
2
3
4
5
6
7
8
51
49
165
148
13.5
504
463
47
10.2
417
10.0
136
4.8
Mississippi
1
471
101
21.5
414
21.0
162
16.2
Mississippi
2
472
113
24.0
400
23.5
195
18.9
Michigan
Michigan
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Page 5 of 9
5.5
5.9
5.7
Under 65, Householder or
Spouse Worked
Under 65 Population
State
District
Population
Number
Uninsured
Percent
Uninsured
Population
Percent
Uninsured
Under 18
Population
Percent
Uninsured
15.5
Mississippi
3
4n
100
20.9
416
20.4
167
Mississippi
4
470
101
21.4
406
21.0
168
16.1
Mississippi
5
483
20.3
415
19.9
168
15.0
Missouri
1
2
3
4
5
502
98
86
17.2
438
16.2
152
14.2
523
57
10.8
480
10.2
150
8.3
496
499
504
500
73
14.6
450
13.7
142
10.9
84
83
16.9
441
15.9
152
14.0
16.4
451
15.4
143
13.0
80
16.1
452
15.1
151
12.8
491
88
18.0
439
16.9
142
15.1
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
6
7
8
488
91
18.6
424
17.5
153
16.1
Missouri
9
508
82
16.1
457
15.1
154
12.9
Montana
o
726
n
10.6
657
10.4
248
4.9
Nebraska
Nebraska
Nebraska
1
476
50
10.4
449
10.1
148
8.4
2
502
43
8.5
8.3
160
5.6
459
11.6
158
10.7
Nevada
2
581
55
153
139
11.9
Nevada
3
1
474
434
New Hampshire
1
2
520
Missouri
New Hampshire
26.5
510
24.2
164
26.5
24.0
518
21.9
172
23.3
13.9
473
13.4
148
10.4
518
72
73
14.1
471
13.6
150
10.7
528
81
15.3
464
14.4
165
11.0
2
510
82
16.2
447
15.3
150
11.9
3
508
65
12.8
452
12.1
149
8.2
4
5
6
498
71
14.3
443
13.5
148
9.8
523
60
11.5
474
10.9
148
6.7
525
75
14.2
468
13.5
134
9.6
7
516
64
12.4
468
11.7
132
7.5
New Jersey
New Jersey
New Jersey
New Jersey
New Jersey
New Jersey
576
New Jersey
New Jersey
8
511
85
16.7
453
15.8
139
12.5
New Jersey
9
502
79
15.7
447
14.9
118
11.2
New Jersey
10
528
101
19.1
443
18.1
156
15.2
New Jersey
11
534
59
11.0
488
10.4
142
6.1
New Jersey
New Jersey
New Mexico
New Mexico
12
530
56
10.7
477
10.1
144
5.7
13
526
118
22.5
445
21.2
146
17.1
1
461
408
20.0
137
15.9
22.6
158
18.1
3
21.3
388
400
21.9
New Mexico
20.6
162
16.7
New York
1
453
463
505
96
103
99
20.8
2
54
10.8
444
10.5
150
6.0
New York
2
518
58
11.2
454
10.9
145
6.5
New York
3
4
5
6
7
8
496
489
485
509
49
9.8
127
6.0
11.6
439
430
9.5
57
11.3
132
6.8
12.0
425
11.6
121
7.1
16.2
425
15.7
151
12.3
4n
58
83
88
18.4
400
17.8
109
14.3
486
75
15.3
409
390
390
14.9
97
10.4
14.1
113
9.9
18.5
168
15.5
New York
NIIWYork
New York
New York
New York
New York
New York
New York
9
461
67
14.6
10
518
99
19.0
11
525
95
17.6
170
14.6
12
522
141
18.2
27.1
423
New York
395
26.1
165
18.0
New York
New York
New York
13
492
65
13.2
416
12.9
133
8.7
14
482
62
12.8
422
12.4
66
7.4
15
506
123
24.3
360
23.6
146
18.0
New York
16
534
143
26.7
361
26.0
200
18.0
New York
New York
New York
17
489
96
19.7
393
19.1
144
16.0
18
4n
65
13.6
417
13.1
114
8.8
19
509
53
10.4
447
10.1
139
6.0
Page 6 of 9
Under 65, Householder or
Spouse Worked
Under 65 Population
State
District
Population
Number
Uninsured
Percent
Uninsured
Under 18
Population
Percent
Uninsured
Population
Percent
Uninsured
New York
20
509
57
11.1
451
10.8
154
6.4
New York
21
485
65
13.5
425
13.0
132
8.7
New York
22
500
64
12.7
438
12.3
149
8.1
New York
23
487
73
15.0
415
14.5
147
10.7
10.3
New York
24
505
73
14.5
416
14.1
157
New York
25
499
69
13.8
435
13.3
147
9.2
New York
New York
26
498
n
14.4
423
13.9
136
9.8
27
499
63
12.6
442
12.2
149
7.9
New York
28
498
67
13.5
432
13.0
144
8.7
New York
29
488
70
14.4
423
13.9
141
9.9
New York
30
488
74
15.3
412
14.8
142
10.9
New York
North Carolina
31
490
75
15.3
419
14.8
155
11.0
1
476
92
19.3
410
18.2
160
16.6
North Carolina
2
480
75
15.6
435
14.6
11.8
North Carolina
3
487
78
16.0
429
15.1
138
145
NOOh Carolina
4
506
66
13.0
484
12.2
129
8.5
North Carolina
5
476
n
16.1
431
15.1
130
12.3
North Carolina
484
503
70
14.5
449
13.5
130
10.3
78
15.5
419
14.7
143
12.1
487
78
16.0
438
15.0
155
12.5
North Carolina
6
7
8
9
496
65
13.1
460
12.3
137
8.7
North Carolina
10
484
73
15.0
448
14.1
137
11.1
North Carolina
11
454
76
16.7
406
15.7
128
13.0
North Carolina
12
487
90
18.4
436
17.2
147
15.1
North Dakota
o
531
51
9.6
496
9.3
Ohio
1
515
n
14.0
454
13.0
164
163
10.9
Ohio
2
3
525
56
10.7
473
9.9
167
7.0
519
11.9
458
11.1
155
8.4
Ohio
4
515
62
65
12.7
459
11.8
167
9.5
Ohio
517
63
12.2
466
11.3
174
8.9
515
70
13.5
444
12.7
163
10.8
523
61
11.7
484
10.9
8.3
525
61
11.7
471
10.9
163
169
Ohio
5
6
7
8
9
519
66
12.8
11.9
163
9.6
Ohio
10
62
12.3
459
448
11.5
147
8.8
North Carolina
North Carolina
Ohio
Ohio
Ohio
Ohio
12.5
5.6
8.3
Ohio
11
503
506
74
14.6
432
13.7
160
11.9
Ohio
12
538
65
12.2
480
11.3
168
8.8
Ohio
13
530
58
11.0
476
10.2
172
7.5
Ohio
14
514
64
12.5
11.7
150
9.1
Ohio
15
534
63
11.7
454
478
10.9
139
8.0
Ohio
16
512
65
12.8
456
11.9
165
9.6
Ohio
17
499
66
13.3
437
12.4
156
10.3
Ohio
18
504
440
12.7
163
10.7
19
502
68
55
13.6
Ohio
11.0
453
10.2
146
7.3
Oklahoma
1
489
114
23.4
442
22.8
153
19.8
Oklahoma
2
3
469
120
25.7
417
25.0
159
22.6
463
120
26.0
410
25.4
152
23.0
OIdahoma
OIdahoma
Oklahoma
Oklahoma
4
492
114
23.2
438
22.7
158
5
6
480
110
436
22.3
151
19.9
19.3
471
122
22.9
25.8
421
25.2
159
22.7
Oregon
1
540
72
13.3
499
12.7
155
6.9
Oregon
2
516
82
16.0
475
15.3
163
9.3
Oregon
3
530
82
15.5
489
14.8
152
8.7
Oregon
4
523
80
15.3
482
14.6
155
8.7
Oregon
5
529
n
14.5
488
13.9
160
8.0
Page 7 of 9
State
Pennsylvania
District
1
Pennsylvania
Pennsylvania
2
3
Pennsylvania
4
Under 65 Population
Number
Uninsured
Population
508
69
58
495
Percent
Uninsured
13.5
11.7
Under 65, Householder or
Spouse Worked
Percent
Uninsured
Population
12.0
411
Under 18
Population
164
Percent
Uninsured
10.7
136
8.6
50
10.4
413
417
10.4
479
9.2
49
10.0
423
8.9
138
144
144
6.7
7.1
Pennsylvania
5
487
501
54
10.8
431
9.5
Pennsylvania
6
484
51
10.5
430
9.2
Pennsylvania
7
494
37
7.5
443
6.7
140
134
Pennsylvania
8
36
54
7.0
10.9
432
6.1
9.6
155
151
3.6
Pennsylvania
520
493
471
9
Pennsylvania
10
484
10.9
147
7.7
11
474
11.3
425
414
9.6
Pennsylvania
53
53
9.9
134
8.1
Pennsylvania
Pennsylvania
12
483
54
11.1
411
9.8
144
13
492
35
54
47
7.2
11.2
446
6.3
135
8.1
3.6
409
9.9
124
7.9
9.4
441
8.3
141
5.8
7.6
7.1
3.6
7.9
Pennsylvania
14
481
Pennsylvania
15
Pennsylvania
16
495
512
45
8.7
463
7.7
159
5.0
Pennsylvania
17
504
47
9.2
455
8.1
148
5.5
Pennsylvania
18
474
47
9.9
416
8.7
127
6.2
Pennsylvania
19
505
46
9.2
456
8.1
Pennsylvania
Pennsylvania
20
21
483
496
48
52
414
1
412
418
45
44
151
100
108
174
170
165
7.3
7.1
96
94
100
101
105
119
106
8.8
9.3
10.0
9.8
16.3
16.0
17.6
17.5
18.2
20.7
16.1
15.4
14.4
14.6
16.0
5.5
6.6
Rhode Island
Rhode Island
10.0
10.5
10.8
143
138
2
South Carolina
South Carolina
2
561
555
South Carolina
3
537
South Carolina
4
542
South Carolina
5
545
10.6
360
17.1
4n
16.9
477
18.6
463
471
18.6
19.3
455
17.2
572
n
16.1
404
73
15.1
15.3
415
6
545
o
616
Tennessee
1
480
486
482
74
478
493
80
74
16.7
15.1
498
71
502
2
467
21.9
South Carolina
South Dakota
Tennessee
Tennessee
432
357
162
180
191
207
129
131
6.8
9.5
9.2
10.6
10.5
11.2
13.5
15.8
11.0
142
9.9
10.2
11.9
14.3
131
9.7
14.2
427
437
13.5
149
9.2
69
13.7
433
13.1
152
8.7
409
138
Tennessee
3
4
5
6
7
8
480
78
16.3
406
15.5
146
11.4
Tennessee
9
489
85
17.4
16.6
155
12.4
Texas
1
482
114
23.7
405
427
22.4
150
18.4
Texas
2
493
117
23.7
22.5
153
18.6
Texas
3
526
90
17.0
428
491
16.1
146
11.4
Texas
4
497
110
22.2
450
20.9
154
16.8
Texas
5
506
129
25.4
451
24.0
152
20.2
Texas
94
17.4
504
16.4
17.4
485
154
154
159
11.9
504
Tennessee
Tennessee
Tennessee
Tennessee
404
6
541
Texas
7
542
100
18.5
Texas
Texas
8
9
10
11
535
104
510
112
19.5
22.0
457
18.5
20.8
156
14.2
16.7
535
125
23.5
483
22.2
137
17.9
502
121
24.1
434
22.9
153
19.0
508
122
24.0
457
22.6
154
18.7
Texas
12
13
493
130
26.4
437
24.9
158
21.2
Texas
14
497
128
25.8
444
24.4
160
20.7
443
31.9
198
29.4
457
29.4
183
26.5
Texas
Texas
Texas
Texas
15
513
173
33.8
Texas
16
527
164
31.1
Page 8 of 9
12.9
State
Texas
District
17
Texas
18
19
Texas
Under 65 Population
Number
Uninsured
Population
484
122
Percent
Uninsured
25.3
Under 65, Householder or
Spouse Worlced
Percent
Population
Uninsured
429
23.9
Under 18
Population
155
Percent
Uninsured
20.1
523
137
26.2
455
24.8
516
121
23.4
468
22.1
152
164
21.0
18.1
25.6
15.7
Texas
20
519
158
30.5
452
28.8
168
Texas
21
498
105
453
20.0
146
Texas
22
539
107
21.2
19.8
495
18.7
161
14.5
Texas
23
524
158
30.1
459
28.4
192
25.6
Texas
24
525
130
24.7
475
23.3
171
19.6
Texas
25
534
124
23.1
21.8
161
17.9
Texas
T_
26
27
547
18.7
31.4
145
Texas
Texas
28
29
102
162
161
485
510
451
Texas
30
31.3
33.4
26.6
448
469
471
Utah
Utah
Utah
530
531
178
141
13.1
26.7
26.7
28.9
21.4
63
11.8
2
533
66
12.4
500
504
3
541
75
13.9
506
o
537
56
10.4
488
13.3
10.0
226
Vermont
156
4.0
511
78
15.3
470
13.9
148
9.3
Virginia
516
515
533
17.6
29.6
29.6
31.5
25.1
11.3
11.9
186
185
190
160
220
202
9.0
9.5
11.8
Virginia
2
535
79
14.7
478
13.5
147
8.8
Virginia
3
101
20.0
84
16.5
152
152
493
492
513
522
498
94
19.0
18.1
453
452
481
66
14.0
12.6
13.9
10.6
12.8
11.8
7.9
6.2
93
18.6
446
533
70
13.2
500
542
62
11.5
508
509
493
491
46
56
9.1
11.3
479
461
56
11.3
458
493
71
14.3
459
488
61
56
60
44
12.5
11.5
453
483
Wisconsin
Wisconsin
4
5
6
7
8
9
10
11
1
2
3
4
5
6
7
8
9
1
2
3
1
2
3
4
5
6
7
8
453
466
18.2
Virginia
506
510
Wisconsin
9
497
506
Wyoming
o
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Washington
Washington
Washington
Washington
Washington
Washington
Washington
Washington
Washington
West Virginia
West Virginia
West Virginia
Wisconsin
Wisconsin
Wisconsin
Wisconsin
Wisconsin
Wisconsin
Total
481
518
511
502
89
72
486
15.0
17.2
16.4
12.7
11.5
17.0
11.9
10.4
112
132
155
146
8.9
146
150
14.0
12.2
56
90
17.9
476
410
11.3
12.3
8.3
10.8
17.0
16.9
487
128
142
11.0
11.1
12.6
8.5
11.0
447
449
133
154
166
148
143
96
158
149
138
146
509
505
505
512
90
91
17.7
418
18.1
383
17.4
149
49
9.7
468
9.3
167
49
9.6
476
496
57
11.4
460
9.2
10.9
166
150
12.6
7.2
5.5
6.0
9.2
9.3
13.8
10.9
9.5
10.3
5.9
8.8
13.9
13.9
14.5
7.3
6.8
9.9
500
49
9.8
464
9.4
152
7.2
503
492
57
11.3
462
11.0
169
9.6
51
10.3
456
490
11.1
10.3
454
461
9.9
10.6
154
8.2
9.4
472
9.9
7.6
168
8.0
421
54
51
40
56
13.3
403
223,371
37,067
16.6
197,615
Page 9 of 9
169
8.2
5.6
12.7
169
148
10.6
15.7
67,106
12.4
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY~
~
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIAAVENUE,.N.W. - WASHINGTON, D.C. - 20220 - (202) 622·2960
FOR RELEASE AT 2:30 P.M.
July 20, 1994
CONTACT:
Office of Financing
202/219-3350
.
TREASURY TO AUCTION 2-YEAR AND 5-YEAR NOTES
TOTALING $28,250 MILLION
The Treasury will auction $17,250 million of 2-year notes
and $11,000 million of 5-year notes to refund $15,290 million of
publicly-held securities maturing July 31, 1994, and to raise
about $12,950 million new cash.
In addition to the public holdings, Federal Reserve Banks
hold $1,627 million of the maturing securities for their own
accounts, which may be refunded by issuing additional amounts
of the new securities.
The maturing securities held by the public include $700
million held by Federal Reserve Banks as agents for foreign
and international monetary authorities. Amounts bid for these
accounts by Federal Reserve Banks will be added to the offering.
Both the 2-year and 5-year note auctions will be conducted
in the single-price auction format. All competitive and noncompetitive awards will be at the highest yield of accepted
competitive tenders.
Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington, D. C.
This offering of Treasury securities is governed by the terms
and conditions set forth in the Uniform Offering Circular (31 CFR
Part 356) for the sale and issue by the Treasury to the public of
marketable Treasury bills, notes, and bonds.
Details about each of the new securities are given in the
attached offering highlights.
000
Attachment
IJt-960
HIGHLIGHTS OF TREASURY OFFERINGS TO THE PUBLIC OF
2-YEAR AND 5-YEAR NOTES TO BE ISSUED AUGUST 1, 1994
July 20, 1994
Offering Amount . . . . .
Description of Offering:
Term and type of security
...
Series . . . . . .
. . . .
CUSIP number . . . .
..
Auction date . . .
Issue date . . .
. . .
Dated date . . . .
Maturity date
Interest rate .
....... .
0
yield . . . .
. . . .
.
.
Interest payment dates . .
Minimum bid amount . . . . . . . .
Multiples . . . . . .
Accrued interest
payable by investor
Premium or discount . . . . . . . .
$17,250 million
$11,000 million
2-year notes
AJ-1996
912827 Q5 4
July 26, 1994
August 1, 1994
August 1, 1994
July 31, 1996
Determined based on the
highest accepted bid
Determined at auction
January 31 and July 31
5-year notes
Q-1999
912827 Q6 2
July 27, 1994
August 1, 1994
August 1, 1994
July 31, 1999
Determined based on the
highest accepted bid
Determined at auction
January 31 and July 31
$5,000
$1,000
$1,000
$1,000
None
Determined at auction
None
Determined at auction
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids . . . Accepted in full up to $5,000,000 at the highest accepted yield
Competitive bids . . . . (1) Must be expressed as a yield with two decimals, e.g., 7.10%
(2) Net long position for each bidder must be reported when the
sum of the total bid amount, at all yields, and the net long
position is $2 billion or greater.
(3) Net long position must be determined as of one half-hour prior
to the closing time for receipt of competitive tenders.
Maximum Recognized Bid
· 35% of public offering
at a Single Yield
Maximum Award . . . . . . · 35% of public offering
Receipt of Tenders:
Noncompetitive tenders · Prior to 12:00 noon Eastern Daylight Saving time on auction day
· Prior to 1:00 p.m. Eastern Daylight Saving time on auction day
Competitive tenders
Payment Terms . . . . . . · Full payment with tender or by charge to a funds account at a
Federal Reserve Bank on issue date
DEPARTMENT
OF
THE
TREASURY
~~178fq~. . . . . . . . . . . . . . . . . . . . . . . . . . . .. .
..............................
OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960
July 20, 1994
Monthly Release of U.S. Reserve Assets
The Treasury Department today released U.S. reserve assets data for the month of
June 1994.
As indicated in this table, U.S. reserve assets amounted to $75,732 million at the end
of June 1994, up from $74,420 million in May 1994.
End
of
Month
Gold
Stock 1/
Special
Drawing
Rights l/J/
i/
Reserve
Position in
IMF 1/
74,420
11,052
9,522
42,005
11,841
75,732
11,052
9,731
42,765
12,184
Total
Reserve
Assets
May
June
Foreign
Currencies
1994
1/
Valued at $42.2222 per fine troy ounce.
1/
Beginning July 1974, the IMF adopted a technique for valuing the SDR based on a
weighted average of exchange rates for the currencies of selected member countries. The
U.S. SDR holdings and reserve position in the IMF also are valued on this basis
beginning July 1974.
J/
Includes allocations of SDRs by the IMF plus transactions in SDRs.
~/
Valued at current market exchange rates.
LB-961
UBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
i :"
r ' ( ':' " ' .. ,
FOR IMMEDIATE RELEASE
Ju ly 21, 1994
JW. L :\
~
~
~:
... -,
,.
.') :. 1.1
. .:.,!_JJJ
- - -
CONTACT: Office of Financing
202-219-3350
RESULTS OF TREASURY'S AUCTION OF 52-WEEK BILLS
Tenders for $16,893 million of 52-week bills to be issued
July 28, 1994 and to mature July 27, 1995 were
accepted today (CUSIP: 912794S96).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average
Discount
Rate
5.18%
5.20%
5.20%
Investment
Rate
5.47%
5.49%
5.49%
Price
94.762
94.742
94.742
$46,000 was accepted at lower yields.
Tenders at the high discount rate were allotted 55%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
Received
$54,181,168
AcceQted
$16,892,991
$48,708,826
925,942
$49,634,768
$11,420,649
925,942
$12,346,591
4,250,000
4,250,000
296,400
$54,181,168
296,400
$16,892,991
-
An additional $30,000 thousand of bills will be
issued to foreign official institutions for new cash.
5.04 -- 94.904
~-962
5.19 -- 94.752
TREASURY"
NEWS
omCE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE. N.W. - WASHINGTON, D.C. - 20220 _ (202) 622-2960
TEXT AS PREPARBD POR DELIVERY
Embargoed for release until
10:00 a.m., July 21, 1994
STATEMENT OF THE HONORABLE
LAWRENCE SUMMERS
UNDER SECRETARY OF THE TREASURY
FOR INTERNATIONAL AFFAIRS
BEFORE THE COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
SUBCOMMITTEE ON INTERNATIONAL FINANCE AND MONETARY POLICY
UNITED STATES SENATE
July 21, 1994
Mr. Chairman and Members of the Committee:
It is a pleasure to be with you here today to present the
Treasury Department's spring 1994 Report on International
Economic and Exchange Rate Policy.
The report itself covers
information available just through the end of May, with the
principal exception of exchange markets, which are through June.
I will, however, endeavor to provide a comprehensive overview of
the current global economic situation in my remarks.
Naples Economic summit
I would like to start with a brief report on the Naples
Economic Summit.
The President had a very productive series of
meetings with the other G-7 leaders, leading to a number of
significant conclusions.
As you can imagine, the world economy loomed large in
everyone's thoughts.
The leaders agreed on a set of principles
to guide efforts to create employment, and renewed their
commitment to strengthen and sustain the recovery while
maintaining low inflation.
Japan agreed that tax cuts were still
required to stimulate their economy. With an eye toward building
the economic ties of the future, the leaders agreed to begin
developing common information and communications infrastructure,
ensuring more integration, openness and competition.
LB-963
-2-
Growth strategy Beginning to Pay Off
The G-7 economies have come a long way in the past year.
Last summer the United states had just begun its recovery, and we
were still hoping for a turnaround in Europe and Japan. I told
you in my testimony last spring that European recovery was "still
in the distance" and that Japan needed a multi-year tax cut to
stimulate its economy. At the Tokyo Summit, in July of last
year, the G-7 endorsed a growth strategy that included deficit
reduction in the united States, European interest rate reductions
in Europe and fiscal stimulus in Japan.
We are beginning to see the fruits of that strategy. A year
later, recovery has taken firm hold in North America and the
united Kingdom, and the G-7 countries as a whole will grow by a
full percentage point faster than last year -- the best
performance in five years. After posting declines in 1993,
Germany, France and Italy will all show positive growth this
year. We are hopeful that growth in Japan will accelerate as the
new government has reiterated its commitment to cut taxes until
the recovery has strengthened. I think it is now safe to say
that we have all finally put the recession behind us.
The united states continues to lead the pack. The u.s.
economy is still growing faster than any other G-7 economy
despite the fact that we are further into recovery. Over
75 percent of the total growth in the G-7 in 1993 and 1994 is
accounted for by the rise in u.s. GDP, though we account for only
40 percent of G-7 GDP. u.s. job growth for this year will be
more than for the OECD as a whole, in contrast to another
substantial fall in Europe's employment. And the President's
ambitious program of deficit reduction has put us on track to
have the second lowest budget deficit in the G-7, after Japan.
A most encouraging sign is that our recovery is being led by
investment. Business purchases of equipment accounted for fully
one third of the increase in real GOP over the past three
quarters. By building capacity and investing in people, we are
building the foundation for a long period of sustained growth.
More good news is that inflation remains in check. with
inflation in the G-7 expected to decline below 2.5% for 1994, we
are experiencing the best inflation performance in thirty years.
While long-term interest rates have risen this year, it appears
that this reflects to a large extent the expectation of stronger
growth rather than fears of inflation. It is also important to
keep in mind that rates are going up everywhere, not just in the
united states. In fact, ten-year bond yields have gone up less
in the United states than in four of the other G-7 countries;
only German and Japanese rates rose less.
-3-
There are a number of factors at work in this increase in
long-term rates. A growing economy produced an increased demand
for credit, which tended to push up long-term rates. Also, the
willingness of market participants to hold long positions in
bonds decreased as yields rose, prompting additional sales that
accelerated the rise. This year's rise has also been, in part, a
correction of the remarkable decline in yields which we observed
last year. Whatever the constellation of causes, it is important
to remember that we see no reason to think that the increases to
date will have adverse effects on the real economy in this
country.
When our economy grows faster than those of our trading
partners, one side effect is that we buy more than they do and
our current account deficit increases. It is important to note
that the deterioration we have in fact seen recently is related
to this cyclical pattern and not to any underlying weakness in
the u.s. competitive position. While we do expect the continued
cyclical "lead" of the united states to produce some further
deterioration over the next year or so, the widening process
should slow as growth spreads to more of the G-7 countries. As a
result, the deficit is likely to stabilize as the cyclical
factors recede and is not a significant source of concern.
In Europe, the moderate recovery now under way has so far
been led by exports, but there are signs that growth is spreading
to domestic sectors as well. Unemployment in Europe, though, is
averaging 12 percent, and the economy is unlikely to grow fast
enough over the near term to bring that down significantly.
Governments there are seeking an appropriate policy mix that
recognizes the twin goals of further progress on reducing budget
deficits in some countries, while providing monetary conditions
conducive to a stronger recovery.
In Japan, the government has recognized the need to take a
continued stimulative stance and has indicated it will do so.
Government investment has been the most consistent source of
growth for some time, though consumer spending has begun to
strengthen. While the new government is still getting itself
settled, we were told in Naples that it remains committed to
using fiscal policy to spur growth. Specifically, the Prime
Minister committed to keep the income tax cut in place, and to
withhold an offsetting increase in consumption taxes until the
recovery has strengthened. Indications are that Japan's current
account surplus has peaked and has started to decline. Volume
data, which will show adjustment before value data, indicate that
there is a further decline in the pipeline.
It has become even clearer over the past year that u.S.
economic interests increasingly lie beyond the G-7. Some have
viewed the u.S. push for NAFTA, and now the talk about expanding
NAFTA southward, as a similar turn inward from the world.
-4-
Similarly, many Europeans especially view the Clinton
Administration's emphasis on the Pacific rim and the Asia-Pacific
Economic Cooperation (APEC) forum, as a turn away from Europe.
This points out a unique problem that the united states faces as
the sole remaining super power. We have bilateral relations with
every region and nearly every country in the world; in most
cases, the other country views the United States as its most
important bilateral partner. We must be careful to maintain a
balanced approach.
At the same time, we must seek out the markets and pursue
the policies that will provide the greatest benefit to the
American people. A few facts will make it very clear, for
instance, why the Clinton Administration is placing such a high
priority on the Asia-Pacific region:
o
East Asia includes some of the fastest growing
economies in the world.
o
Even without the united States and Japan, APEC
countries could account for one-quarter of world output
by the year 2000.
o
Trade between the united states and its APEC partners
is 172 percent larger than our trade with the European
Community.
o
We now get 60 percent of our imports from APEC nations,
and those countries buy approximately two-thirds of our
total exports.
FOREIGN EXCHANGE MARKETS
Next, I would like to say a few words about recent
developments in foreign exchange markets. Over the course of the
past nine months, the dollar first appreciated versus the yen and
the mark, then depreciated. Between mid-October of last year and
early January, the dollar appreciated by 10 percent against the
mark and almost 7 percent against the yen. These movements were
generally attributed to continued weak economic performance in
Japan and the expectation that interest rate differentials
between the united States and Germany would move in favor of
dollar assets.
Over the early months of 1994, however, these trends
reversed. This recent depreciation has drawn a lot of attention,
and I'd like to discuss a bit the specifics of our policy and
actions over this period.
-5-
Between early January and the end of June, the dollar
declined by eight percent against the mark and thirteen percent
against the yen. The most important factors in the rise of the
yen and the mark were a reassessment of the pace of economic
recovery in Europe and a renewed focus on the external imbalances
of the united states and Japan. The change of government in
Japan also raised questions in the markets about the new
coalition's ability and willingness to address Japan's current
account surplus with new policy actions.
In response to these moves, the United states, working with
other major countries, intervened in exchange markets on several
occasions:
o
On April 29, we sold several hundred million dollars of
marks and yen. Secretary Bentsen said at the time that we
were concerned about volatility and were moving to "counter
disorderly market conditions."
o
On May 4,
involving
announced
advantage
o
Finally, on June 24, we joined sixteen other countries in a
further significant sale of other currencies.
we participated in a concerted intervention
eighteen other countries. Secretary Bentsen
at the time that the Administration saw "no
in an undervalued currency."
On June 28, Secretary Bentsen made our position as clear as
it could be, when he said: "We believe a stronger dollar is
better for our economy and better for the world's economy."
The recent weakness of the dollar is a complicated
phenomenon with no single cause or explanation.
o
Prospects for recovery have improved in Europe,
dispelling past expectations that interest rates would
fall further and creating new expectations that short
term rates would rise. This has pushed up long term
German rates, in particular, and strengthened the mark.
o
The change of government in Japan has reinvigorated
concern about the Japanese current account surplus.
The perception that the new government might be less
able to make substantial policy changes than its
predecessor has fueled speculation that a rise in the
yen will be required to effect the necessary external
adjustment.
o
The dollar has in fact been relatively stable in the
past year when you look at its relationship with the
currencies of all our trading partners. It is mainly
unchanged since the Administration took office.
-6-
The Administration believes that a strenghening of the
dollar against the yen and mark would have important economic
benefits for the united states. It would restore the confidence
in financial markets that is important to sustaining recovery.
It would boost the attractiveness of u.s. assets and the
incentive for longer-term investment in the economy, and help to
keep inflation low. In addition we believe -- and this view is
shared by other G-7 countries -- that a renewed decline of the
dollar would be counterproductive to global recovery.
The prospects for sustained noninflationary growth in the
united states are more favorable than they have been at any time
in a generation, and should be reflected in a strong and stable
u.s. dollar.
Next, I would like to review some regional developments,
starting with Mexico, then moving to China, Korea and Taiwan.
NORTH AMERICAN FINANCIAL GROOP
Following the March 23 assassination of Mexican presidential
candidate Colosio, the United states announced the establishment
of a temporary bilateral swap facility at the request of the
Mexican authorities. The assassination had prompted the closing
of Mexican financial markets on March 24, giving rise to concern
that the reopening of the market on March 25 would be accompanied
by market disorders that could spillover into u.s. financial
markets. However, no drawings on this facility proved necessary.
On April 26, the united states, Canada and Mexico formed the
North American Financial Group, for regular consultation on
economic and financial developments and policies in the three
countries. These arrangements had been planned earlier in
recognition of the three countries' increasingly interdependent
economic relationships, particularly NAFTA. In connection with
the creation of the North American Financial Group, the monetary
authorities also announced the establishment of a trilateral swap
facility to expand the pool of potential resources available to
each to maintain orderly exchange markets.
CHINA, KOREA AND TAIWAN
From the beginning of its term of office, this
Administration saw the need for more vigorous economic engagement
with the Asia-Pacific region. President Clinton took the bold
step of hosting the first ever meeting of APEC economic leaders
in Seattle in November of last year to initiate important
consultations at the highest level. We are working hard to make
APEC a real force for trade and investment liberalization in the
region. And Secretary Bentsen has initiated a broadened APEC
-7-
dialogue covering macroeconomic and capital market developments
through hosting an unprecedented meeting of APEC finance
ministers in Honolulu in March of this year.
within the APEC group, certain East Asian economies like
China, Korea, and Taiwan are not only growing rapidly; they have
become important players in the global economy. Their external
policies matter to the global system as well as to the U.S.
economy. We must therefore engage them regularly and
consistently to promote trade and exchange liberalization. That
means using all available and appropriate multilateral, regional,
and bilateral means -- the GATT, APEC, the OECD, and the
international financial institutions -- as well as bilateral
negotiations.
China is in the midst of a period of fundamental economic
reform to transform itself to a market-oriented economy. The
United states has every interest in trying to help shape that
transformation and promote China's steady integration with the
global market economy.
In addition to the challenge of reform, China faces the
associated challenge of maintaining macroeconomic stability.
China's leaders know well that controlling inflation is essential
to maintain the political and economic basis momentum for reform.
We saw, for example, that the inflationary threat at the end of
last decade resulted in a costly, temporary halt in reform
progress and a return to government controls.
At the moment, China's economy continues to show clear signs
of overheating. Real growth exceeded 13 percent in 1993 and
remains in double digits this year. Prices in major cities rose
at the rate of 25 percent for the year ending in March 1994.
While Chinese authorities are generally seeking to maintain
tighter control over credit, they have indicated that they will
loosen access to credit for certain loss-making state
enterprises.
China's external situation appears to be strengthening,
however, with very strong export growth exceeding import growth
this year. Reserves have risen $8 billion since end-December
1993. I would also like to mention, as noted in the report, that
China's trade numbers differ considerably from those of its
trading partners and, we believe, significantly understate
China's exports.
In January of this year, Treasury was encouraged by the
announcement of a major reform of China's foreign exchange
regime, along the lines which we had urged during 1993
negotiations. China's dual exchange rates were unified, and the
Chinese announced that government approval would no longer be
required for foreign exchange purchases for trade and trade-
-8-
related transactions. This appeared to be a dismantling of the
system of foreign exchange restrictions which had impeded Chinese
imports, including imports from the united states. China's
authorities announced the creation of a new inter-bank market for
foreign exchange where foreign exchange could be freely purchased
at a market-based exchange rate for import and other
transactions.
In April, however, China took a significant step backward
from these announced reforms by issuing regulations that again
segmented the foreign exchange market.
In particular, foreignfunded enterprises were excluded from the interbank market and
instead must continue to use the swap centers to purchase foreign
exchange needs that exceed export earnings. Foreign-funded
enterprises therefore still face the potential for interference
from the state Administration of Exchange Control in their
desired foreign exchange purchases for imports and other uses.
Moreover, reports indicate that the Chinese authorities are
requiring foreign-funded enterprises to balance their foreign
exchange earnings and expenditures. This system clearly has the
capacity to impede Chinese imports and adjustment in China's
trade surplus with the United states, which reached $23 billion
last year. I would note in this context that treatment of
foreign-funded enterprises is not a small issue. They account
for 40 percent of total Chinese imports. Treasury therefore
concludes China to be manipulating its foreign exchange system in
a manner which prevents effective balance of payments adjustment.
Treasury has pursued a two-part strategy in response to
Chinese actions in this area. First, we have raised our concerns
directly with Chinese central bank officials. In my negotiations
with them, I have stressed our disappointment with the April
regulations, our continued concern over the large and rising
bilateral imbalance, and our firm position that China should
establish a single, unified foreign exchange market with free
access to foreign exchange for both domestic and foreign
enterprises.
Second, we have emphasized this issue in the context of
China's GATT accession negotiations. GATT rules require
countries to refrain from using exchange restrictions which
SUbstitute for trade barriers which are to be liberalized in the
context of entering the GATT. In our view, China's current
system is not compatible with this obligation.
It remains Treasury's judgement that neither Korea nor
Taiwan is manipulating its exchange rate within the meaning of
Section 3004. Nevertheless, Treasury remains concerned about
certain financial and foreign exchange policies in both
countries, particularly capital controls, which discourage
investment and impede the operation of market forces in exchange
rate determination. Treasury will continue to work closely with
-9-
Korea on these issues as it implements its five-year financial
sector liberalization plan and with Taiwan in the context of its
GATT access process. Regarding Korea's financial liberalization,
I would like to welcome Korean Finance Minister Hong's recent
statement that Korea will implement the financial sector
liberalization plan one or two years ahead of schedule to
facilitate OECD entry.
Thank you.
DEPARTMENT OF THE TREASURY
INTERIM REPORT TO CONGRESS
ON
INTERNATIONAL ECONOMIC AND EXCHANGE RAtE POLICY
JULY 1994
Embargoed for release until
10:00 a.m., July 21, 1994
TABLE OF CONTENTS
fI.wl
Part I
Summary and Conclusions
Part II
Global Economic Developments
Part III
Appendix
1
A.
Economic Situation in the G-7 Countries
3
B.
Developments in Foreign Exchange Markets
8
C.
U.S. Balance of Payments Situation
15
Actions Under Section 3004
Korea and Taiwan
20
China
21
Text of Sections 3004 - 3006 of the Omnibus Trade and
Competitiveness Act of 1988
PART I: SUMMARY AND CONCLUSIONS
This Report discusses recent developments in U.S. international economic
policy, including exchange rate policy, since the sixth annual Report to Congress
submitted in November 1993. It is based on information available through May
1994 except for foreign exchange developments, which are described through
June. These reports are required under Sections 3004 and 3005 of the Omnibus
Trade and Competitiveness Act of 1988 (Trade Act).
The outlook for the industrial economies has brightened considerably since
the last report. Recovery is now firmly established in North America and the
United Kingdom. The U.S. economy is flourishing, and Canada and the UK are
expected to show satisfactory growth this year and next. In continental Europe
and Japan, positive real growth is expected this year, though the pace of recovery
remains comparatively weak.
Significant progress has been made on the inflation front. Inflation is under
control throughout the G-7, even in those countries showing the greatest
acceleration in growth. Inflation in the G-7 is expected to average 2.8 percent in
1994, the lowest level since the early 1960s. Particularly notable are essentially
stable inflation in the United States; continued very low inflation in Japan and
Canada; Italy's remarkable achievement in reducing inflation to very moderate
levels; and the sharp decline forecast for German inflation. In countries where
output remains well below potential, this progress towards price stability provides
room for use of monetary policy to strengthen and sustain the expansion. In
countries where the recovery has matured, policy has to be oriented to preventing
acceleration of inflation that could threaten to curtail the expansion.
Despite the growing sense of optimism about recovery and output growth,
unemployment remains alarmingly high and is still riSing in much of Europe,
particularly among the young, and people are staying unemployed longer. There
are over 35 million unemployed in the OECD countries, 22 million of whom are in
Europe alone. Over the past several business cycles, we have seen unemployment
in Europe ratchet ever higher in the slumps and drop less during recoveries. With
each iteration, part of the cyclical joblessness has become structural.
At the Naples Economic Summit, the G-7 reaffirmed their commitment to
take action to sustain the expansion with low inflation. The European participants
committed to further action on the fiscal front to create the conditions that would
permit more flexibility on monetary policy. Japan committed to maintain the recent
income tax cut and not put in place increases in other, offsetting taxes while the
economy remained weak. And, building on the employment conference in Detroit,
the G-7 leaders agreed on an action plan to reduce structural unemployment which
focusses on investment in human capital, reduction of rigidities in labor markets,
fostering innovation and spread of technology, removing barriers to competition
and encouraging opportunities in new areas such as protection of the environment.
2
The pattern of recovery has been associated with some deterioration in the
U.S. current account position, but virtually all the increase in the U.S. deficit during
this period has been cyclical in nature -- the consequence of comparatively rapid
growth in the United States relative to that of our major trading partners. Japan's
external surplus appears to have peaked, and there is some evidence in recent
volume numbers to suggest that further declines are likely.
Recent developments in the exchange markets have been a cause of
considerable concern. By the end of June, the dollar had declined by 13 percent
against the yen and 9 percent against the mark since the beginning of the year.
Both the pace and the extent of these movements were unusual when set against
the backdrop of a general improvement in the fundamental outlook for the U.S.
economy. Given the rise of the dollar against the currencies of many of our other
major trading partners the dollar has been relatively stable since the beginning of
the year when measured on a trade-weighted basis. Nevertheless, the
Administration has expressed concern over the dollar's recent movements against
the major currencies, noting that they have not been in line with fundamental
conditions and that a stronger dollar would be desirable.
Treasury has reviewed the foreign exchange systems and exchange rate
policies of China, Taiwan and Korea -- countries with an important role to play in
promoting a healthy, open global economy and adjustment in external imbalances.
This assessment examines whether these countries are manipulating their
exchange rates within the meaning of Section 3004 of the Trade Act, to prevent
effective balance of payments adjustment or gain unfair competitive advantage in
international trade.
It remains Treasury's judgment that neither Korea nor Taiwan is
manipulating its exchange rate within the meaning of this provision. Nevertheless,
Treasury remains concerned about certain financial and foreign exchange policies in
both countries, particularly capital controls, which discourage investment and
impede the operation of market forces in exchange rate determination.
Treasury welcomes China's decision to unify its dual exchange rates as of
January 1, 1994. Nonetheless, further reforms implemented on April 1, 1994
segmented the foreign exchange market and imposed restrictions that limit foreignfunded enterprises' access to foreign exchange. Based on China's continued
reliance on foreign exchange restrictions, it is Treasury's judgment that China
manipulates its exchange system to prevent balance of payments adjustment and
gain unfair competitive advantage. Treasury urges the Chinese authorities to
eliminate the segmentation of the foreign exchange market and restrictions on
access to foreign exchange. Such steps would facilitate imports and promote
adjustment in China's large bilateral trade surplus with the United States.
3
PART II: GLOBAL ECONOMIC DEVELOPMENTS
A. ECONOMIC SITUATION IN THE G-7 COUNTRIES
Growth
Real GOP growth in the G-7 countries continues to show a clear distinction
among patterns of solid expansion in North America and the UK, some signs of
slow recovery in continental Europe, and continued weakness in Japan.
The U.S. recovery is flourishing, led by investment which will expand
capacity and extend the duration of that expansion. Canada continues firmly on an
expansionary path. The International Monetary Fund (lMF) now projects (see Table
1 below, which also shows the broadly similar average forecast by the June edition
of Consensus Forecasts) U.S. real GOP growth for 1994 of 3.9 percent on a yearover-year basis (3.2 percent over the year to the fourth Quarter of 1994), slowing
to 2.6 percent in 1995. Canada's growth is expected to accelerate to 3.5 percent
this year and 4.1 percent in 1995.
Table 1
G-7 Real GOP Growth
(% change y/y)
1993
United states
Japan
Germany*
France
united Kingdom
Italy
Canada
Total G-7
*
3.0%
0.1
-1.2
-1.0
1.9
-0.7
2.2
1.5
1994F
IMF Consensus
3.7%
3.9%
0.7
0.7
0.9
1.6
1.8
1.2
2.8
2.5
1.1
1.6
3.5
3.5
2.5
2.6
1995F
IMF Consensus
2.6%
2.9%
2.3
1.9
2.5
2.1
2.6
2.7
2.8
2.8
2.5
2.4
3.8
4.1
2.5
2.7
All Germany
F=Forecast; source:IMF, world Economic Outlook, April 1994;
Consensus Economics, Consensus Forecasts June 1994
Growth in Japan has been very weak, although there have recently been
some signs of recovery. The current slowdown is the worst since the end of
postwar reconstruction, taking into account the very low growth also recorded in
1992 (1.1 percent) and projected for this year. Even the 1995 projections would
suggest a very weak recovery, and may be on the optimistic side.
4
The sharp rise in public sector investment in 1992 and 1993 under the fiscal
expansion programs has compensated only in part for the weakness in private
consumption and the two-year decline in private plant and equipment investment.
The February fiscal package -- which includes income tax cuts as well as additional
public infrastructure spending -- will be helpful, but will not fully compensate for
other sources of weak domestic demand.
The outlook for continental Europe is slightly more encouraging, but the
recovery forecast for this year is still quite modest for this stage of the business
cycle and too weak to prevent further increases in unemployment. For the
European Union (EU) countries other than the UK, the IMF projects only 1.0
percent aggregate growth this year, after an 0.8 percent decline in GOP in 1993.
Output Gap
The gap between actual and potential output has been growing in Japan,
France, Germany and Italy, and declining in the United States, Canada and the UK.
Table 2 below shows IMF estimates of this gap for the major countries. While
these calculations are crude and the precise numbers somewhat questionable, the
relationships and directions are indicative. These gaps are expected to remain
sizeable outside the United States, despite narrowing in 1995.
Table 2
G-7: Output GaDs
\ of potential GOP
Canada
France
Germany
Italy
Japan
UK
US
Source:
1993
-5.2\
-3.5
-1.8
-3.9
-3.5
-5.3
-0.9
1994
-4.6\
-4.5
-3.1
-4.7
-5.3
-4.9
+0.1
1995
-3.6\
-4.4
-3.2
-4.2
-5.6
-4.2
+0.2
IMF
Inflation
Inflation has been declining in most G-7 countries, and low inflation for the
G-7 group is likely to continue. IMF and Consensus projections for consumer price
increases (see Table 3 below) show inflation at the lowest aggregate rates since
the early 1960s, excepting only the year 1986, when world petroleum prices were
cut in half.
5
Particularly notable in these projections are essentially stable U.S. inflation
rates; continued very low inflation in Japan and Canada; Italy's remarkable
achievement in reducing inflation to very moderate levels; and the sharp decline
forecast for German inflation. Measures of German inflation have been distorted
by the impact of some increases in value added and other consumption taxes that
enter the consumer price index. As the impact passes from the index, and as tight
German monetary policy achieves success in reducing the rate of wage and price
increases, German inflation has declined. Consumer prices in western Germany
were up only 3.0 percent in the year to June; the IMF projections indicate a
significant decline in the rate of increase over the course of this year and into
1995.
Table 3
G-7 Consumer Price Inflation
(% change y/y)
United states
Japan
Germany*
France
United Kingdom**
Italy
Canada
3.0%
1.3
4.7
2.1
3.0
4.3
1.9
1994
IMF Consensus
2.7%
2.8%
0.7
0.9
2.9
3.0
1.8
1.9
2.6
3.2
3.8
3.9
0.7
0.5
Total G-7
2.8
2.4
1993
*
**
2.3
IMF
3.2%
0.9
2.2
2.1
3.0
3.1
1.7
2.5
1995
Consensus
3.3%
0.8
2.2
2.1
3.5
3.7
1.8
2.7
All Germany for IMF; western Germany for Consensus
For UK , consumer prices excluding mortgage interest in
IMF projections
Global Rise in Long-term Interest Rates
Yields on long-term government bonds increased during the first half of
1994. For the United States, the rise was about 150 basis points. Increases of
between 100 to 200 basis points were recorded on ten-year benchmark issues in
Japan, France, Germany and Italy, and by over 200 percent in Canada and the
United Kingdom. During the first part of this period, the rise was largely
synchronized across national markets. In the latter part, movements were more
divergent.
A number of factors underlay the rise in long-term rates. Expectations
regarding future developments in real economic growth and inflation were affected
6
by adjustments of monetary policy in the United States and Europe and by new
economic data. Also, the willingness of market participants to hold long positions
in bonds decreased as yields rose, prompting additional sales that augmented the
rise. It is generally thought that the substantial decline in yields during 1993,
reflecting the build-up of long positions by a variety of market participants, created
the potential for a substantial correction.
It is not possible to specify with precision the relative importance of the
various factors; however, the generalized rise in yields is consistent with the
improved outlook for economic growth in the United States and in most other
major countries. Stronger growth is associated with greater demand for credit,
and thus with higher interest rates in real terms. Although faster growth also
tends to be associated with rising inflationary expectations, there is no evidence to
date of accelerating price increases in the United States, and inflation also remains
under control in other countries.
External Account Developments
The pattern of recovery in the industrial world has been accompanied by
some deterioration in the U.S. external deficit and by pressures that have limited
the extent of adjustment of Japan's external surplus. Japan's trade and current
account surpluses have remained high as a result of the continued stagnation of
demand in Japan combined with strength in Japan's export markets in North
America and Asia. U.S. external deficits are rising once again, as the U.S.
expansion continues to pull in imports while growth in our export markets in
Europe and Japan remains slack. IMF and Consensus projections for the G-7 are
shown in Table 4.
Table 4
G-7 Current Account Balances
($ billions; \ GOP in parentheses)
1993
United states
-104
Japan
+131
Germany·
-21
France
+17
United Kingdom
-16
Italy
+8
Canada
-24
(-1.6)
(+3.1)
(-1.2)
(+1.0)
(-1.7)
(+1.1)
(-3.5)
Total G-7
(-0.1)
-9
1994F
1995F
IMF
Consensus
IMF
Consensus
-140 (-2.1) -130
-166 (-2.3) -135
+133 (+3.0) +123
+126 (+2.7) +103
-13 (-0.7)
-15
-11 (-0.5)
-7
+10 (+0.8)
+9
+13 (+1.0)
+7
-19 (-2.0)
-17
-20 (-1.9)
-19
+26 (+2.7)
+15
+31 (+3.1)
+17
-15 (-2.6)
-19
-14 (-2.4)
-16
-17
(-0.1)
-34
-40
(-0.2)
• All Germany
F=forecast; source: IMF, World Economic Outlook, April 1994
Consensus Economics, Consensus Forecast
-50
7
Relative national growth rates are a key to understanding these changes in
current account balances. For Japan, the IMF currently is projecting (see Table 1)
real GOP growth of only 0.7 percent for 1994, after 0.1 percent in 1993. In
contrast, growth in important export markets for Japan is projected to be far above
these rates: 3.9 percent in the United States (after 3.0 percent in 1993); 3.5
percent in Canada (vs. 2.4 percent in 1993); and 7.5 percent in Asian developing
countries (vs. 8.4 percent in 1993). It should not be surprising that, under these
conditions, the volume of Japan's imports grew only 1.4 percent in 1993, while
export volume grew 1.6 percent despite the sharp rise of the yen (12 percent in
real trade-weighted terms over the course of 1993).
In the United States, strong growth in imports in the face of relatively weak
export performance, especially to Europe and Japan, contributed to rising trade and
current account deficits. Strong export growth to Japan and Western Europe had
been a major factor in the 1987-91 decline in our deficits. Despite a continued
solid U.S. competitive position, the weak outlook for growth in Europe and Japan
will hamper U.S. export growth until recovery strengthens, and the U.S. recovery
will continue to pull in imports.
The developments in external imbalances, however, are not by themselves a
significant cause of concern. Indeed, the large capital inflows associated with the
external deficit enable the United States to maintain a higher level of investment
than it could do if solely dependent on domestic saving, helping to strengthen our
recovery. The U.S. current account deficit is expected to stabilize as the negative
forces associated with growth differentials recede. Moreover, given the strength
of U.S. investment, the buildup of debt associated with our current account
deficits should not pose a problem.
8
B.
DEVELOPMENTS IN THE FOREIGN EXCHANGE MARKET
Fluctuations of the Dollar against Individual Currencies
The dollar appreciated against the German mark and Japanese yen in the
first half of the period covered in this report. From mid-October until endDecember, the dollar rose in nominal terms by six percent against the mark and by
four percent against the yen. Meanwhile, the mark depreciated by two percent
against the yen. Against other currencies, the results were mixed. The dollar
depreciated very slightly against the Canadian dollar and the Mexican peso. latin
American currencies generally tracked dollar movements, with some exceptions
such as Brazil. Key Asian currencies also followed the dollar, although the floating
Singapore dollar depreciated.
Flows out of yen were attributed to continued economic weakness in Japan
and political uncertainty related to the new coalition government. Demand for
dollars vs. marks was related to expectations that interest rate differentials would
move in favor of dollar assets. During the final quarter of 1993 and first Quarter of
1994, acceleration of the U.S. economic recovery contrasted sharply with
continued weakness in the real economy in Europe.
In the early months of 1994, however, these exchange rate trends reversed
course. Over the period from end-1993 until end-June the dollar declined in
nominal terms by nine percent against the mark and by 13 percent against the yen.
Over this same period, the mark depreciated by 4 percent against the yen.
However, the dollar appreciated by 4 percent against the Canadian dollar
and by almost 10 percent against the Mexican peso. Other Latin American
currencies were steady, with the exception of Brazil's and Venezuela's. After the
Venezuelan Government introduced exchange rate and price controls on June 27,
the Venezuelan bolivar took a third large step in its depreciation since mid-April.
On July 1, Brazil introduced a new currency linked to the dollar as part of a broader
price stabilization policy. The dollar depreciated by 4 percent against the
Singapore dollar, but showed little change against other Asian currencies. Table 5
shows the percent change in the dollar against various currencies since
October 1 5, 1 993.
9
Table 5
Change in Dollar vs. Selected Currencies
(Percentage Change)
Change from
10/15/93 to 12/31/93
Japanese Yen
German Mark
British Sterling
French Franc
Italian Lira
Canadian Dollar
Swiss Franc
Mexican Peso
Korean Won
Taiwan Dollar
4.4%
6.5
2.1
2.5
Change From
10/15/93 to 6/30/94
-7.4%
-1.3
-1.8
3.3
-4.5
-0.4
4.1
-5.9
-0.2
-0.6
0.3
9.0
-0.7
-0.2
6.7
0.7
The most important factors behind the rise of the yen and the mark this year
were a reassessment of the pace of economic activity in Europe and a renewed
focus on the external imbalances of the United States and Japan. Emerging
indications of economic recovery in Germany dampened market expectations about
the extent of monetary easing there and about prospects for declines in German
yields relative to U.S. yields. Japanese political uncertainties raised questions as to
whether Japan's external surplus would be addressed. The widening of the U.S.
current account deficit and continued diversification by U.S. investors into foreign
assets raised questions about prospects for financing the deficit.
In addition to these underlying fundamental factors, market participants
remained sensitive to progress in discussion of trade issues between the United
States and Japan and to the reception of U.S. officials to the stimulus measures
announced by Japan in early February. Dollar movements also were affected at
times by market dynamics and volatility in other asset markets.
Nominal Exchange Rates
October 15, 1993 through June 30, 1994
Dollar VS. Yen and OM
115,,--------------------------------------------------------------~ 1.8
.... 110
~
...;;;<'.' .
o
>'
o
~
c..
'. t'~.ii~·~:··'-!\,~.C\\,.,'\;,;::\.
·····1··"-············
••,
\ '\A
,
/
'., \I
f"'-" •. "
105
,
..... _._.- ......... "-'-'-'_._.
'
...•.. ~,-
....
_.,._._.
__
.j-A-.....'"
\
I
.. :
'\
\,
I.
'.,".
I
..
M-.--.,
V
'
:".. ......
J 1.75
1.7
c_
to
"5
0
1.65 ....
CD
..
Q.
c:
1.6 0~
CD
~ 100
.0··.0.0 ... ·.1 .. ·
..................................0 ............................_.•..... ,.0.0
Yen per Dollar OM per Dollar
1.55
......
0
95
Od'93
Nov '93
Dec '93
Jan '94
Feb '94
Mar '94
Apr '94
May '94
Jun'94
1.5
Yen per OM
rot
1M
. .. .. -..... .0...........................
68
66
66
64
,._._",.,.0.-1 64
l-.-..............: . . ,
.\ .... -..... ......-.... -.-............-.-.-.. /-......•. -.•.-..............---....~...........---.......... :t.-l 62
62
60
.-1 68
..............................----................. -... ---- .......... -.........................----.............---.-................-................---\.1".......... -......................-....................-............. -...-.-.-..........-.---.-....
~';93'" """N~~'~93 Illoe~~93"""""J~~'·94
Source: Reuters daily New York opening levels,
II'
F~t; '94
'M~~;94'''''''' '~~';94'
... -.-...-............. -.................--..................-t 60
"~; '94'
'Jun '94
158
11
The dollar's depreciation accelerated in April and spread beyond the yen to
encompass European currencies as well. Political uncertainty in U.S.-Japan trade
relations increased following Prime Minister Hosokawa's resignation. Meanwhile,
the narrowing of interest rate differentials between the United States and Germany
seemed to have run its course after the Bundesbank made an unexpected cut in
interest rates on April 14 and the Federal Reserve hiked rates on April 18.
Fluctuations of Major Currencies on a Trade-weighted Basis
Taken over a time period of two to three years, the dollar and the German
mark have fluctuated moderately on a trade-weighted basis, while the Japanese
yen has greatly appreciated. However, from mid-October 1993 through June
1994 the dollar has registered a decline of some 2 percent, while the mark has
remained little changed and the yen has appreciated by 3.0 percent.
Real Trade Weighted Index
(Monthly)
October 93 • June 94
120
110
100
--.. -... -.-.-.--.-............- - -........ -._.-.-.-.-... -..-
..- ....- - - - - . - - . - - - . - . - -....- ..-.---.--..---.--.-----.-.....--.--.--..- ... --.-.-.•..--.-.-.-.-........."'---
120
.-.-.-......... -.-.-.-.- .....-.-.-......... -.-.-.--........-.-.--.-........ - ..-.-......•.._ - -... -.-...--.-..... -" .-.-.-.-.... -----.---........ -.-.-.--......... ---.-.-........-.-.-.-.-... - ._.---... -.-.-.-.-....
110
.. ..--.-.-......-..--.-.-.-.-............-.--..--....-.-.-.-.--..........-.-.---.........-.-.-.-..............-.-...-... -.......---.-.-............ -.-.-.-............--.-.-.-....... -...-.-.-.-.-......-....--.-.-....-.........-.-.---..
100
.r.:.;.~..:.~.~.:-:-:.:.=.: ~.:
.' ....... '.'.'.'
- .'.
-'.'.'.' .........•.... ' . ' .... - ... - ...
- ........ - ............ '.-.'.' .. '.'.'.
oo~------~------~--------~------~------~------~------~------~~
~~
~~
~~
~~
~~
~~
.~
~~
~~
I~ _
. ~~_u -·~-·I
North American Financial Group
Following the March 23 assassination of Mexican presidential candidate
Colosio, the U.S. monetary authorities announced on March 24 the establishment
of a temporary bilateral swap facility at the request of the Mexican authorities.
The assassination had prompted the closing of Mexican financial markets on March
24, giving rise to concern that the reopening of the market on March 25 would be
accompanied by market disorders that could spill over into U.S. financial markets.
However, no drawings on this facility proved necessary.
12
On April 26, the U.S., Canadian, and Mexican monetary authorities
announced the creation of the North American Financial Group, a forum for regular
consultation on economic and financial developments and policies in the three
countries. These arrangements had been planned earlier in recognition of the three
countries' increasingly interdependent economic relationships, particularly NAFTA.
In connection with the creation of the North American Financial Group, the
monetary authorities also announced the establishment of a trilateral swap facility
to expand the pool of potential resources available to each to maintain orderly
exchange markets. The United States and Mexico put in place swap agreements
for up to $6.0 billion. The Bank of Canada and the Bank of Mexico expanded an
existing swap agreement to Canadian $1.0 billion. The Federal Reserve and the
Bank of Canada reaffirmed their existing $2.0 billion swap agreement. Each party
has reciprocal privileges to make drawings of the others' currencies under this
facility.
Operations in the Foreign Exchange Market and U.S. Policy
In response to the currency movements in the spring and to market
perceptions about U.S. exchange rate policy, the U.S. monetary authorities, in
cooperation with other major countries, intervened on Friday, April 29 in support of
the dollar. Secretary Bentsen also issued the following statement:
The U.S. monetary authorities intervened today in foreign exchange markets
to counter disorderly market conditions. This is in line with our previously
articulated policy, which recognizes that excessive volatility is
counterproductive to growth. We stand ready to continue to cooperate in
foreign exchange markets.
The U.S. authorities sold $500 million equivalent of marks and $200 million
equivalent of yen on that morning.
On Sunday, May 1, Secretary Bentsen said in a television interview that
"what we're concerned about is volatility in the market" and that the U.S.
authorities intervene "when we see the market move away from what we think are
the underlying economic realities.
II
The April 29 intervention operation was followed on May 4 by a concerted
intervention operation involving the U.S. monetary authorities and the authorities
of 18 other countries. The U.S. monetary authorities sold $750 million equivalent
of marks and $ 500 million equivalent of yen. These operations were accompanied
by a further statement from Secretary Bentsen:
13
"I am concerned by recent developments in the exchange markets. This
Administration sees no advantage in an undervalued currency. The
monetary authorities of the major countries are joining this morning in
concerted intervention. These operations reflect our view that recent
movements in exchange markets have gone beyond what is justified by
economic fundamentals."
These operations demonstrated that the G-7 are prepared to act quickly, and
in concert, in response to deteriorating conditions in foreign exchange markets.
Subsequently, the Bank of Japan accommodated a decline in market interest
rates to record low levels; the Bundesbank lowered its discount and Lombard rates
by 50 basis points each; and the Federal Reserve raised its presumed Fed funds
rate target and discount rate by 50 basis points each. These actions were
followed by a short period of relative stability of exchange rates.
However, in early June, the dollar's decline resumed. Political uncertainties
in Japan were growing. The market was increasingly cautious about the end of
the monetary easing cycle in Europe and about upside risk to European growth
forecasts. With market participants' views growing more bearish, the U.S.
authorities responded with a series of statements reiterating the Administration's
concern, and on June 24 the U.S. monetary authorities and the authorities of 16
other countries made coordinated intervention purchases of dollars. The U.S.
authorities sold $610 million equivalent of yen and $950 million equivalent of
marks, and Secretary Bentsen said
"Our actions today in cooperation with our G-7 partners and other monetary
authorities reflect a shared concern about recent developments in financial
markets. We look forward to continued cooperation to maintain the
conditions necessary for sustained economic expansion with low inflation. n
On June 28, Secretary Bentsen stated
"We believe a stronger dollar is better for our economy and better for the
world's economy. The dollar is not a tool of our trade policy. No country
can be indifferent to a fall in its currency."
The Administration believes that a stronger dollar would have important
economic benefits for the United States. It would restore the confidence in
financial markets that is important to sustaining recovery. It would boost the
attractiveness of U.S. assets and the incentive for longer-term investment in the
economy, and help to keep inflation low. In addition, we believe -- and this view is
shared by other G-7 countries -- that a continuation of recent movements in
exchange markets would be counterproductive to global recovery.
14
The prospects for sustained noninflationary growth in the United States are
more favorable than they have been at any time in a generation, and should be
reflected in a strong and stable U.S. dollar.
15
C. Balance-of-Payments Developments
Trade Developments in 1993
Services have become a major component of international trade in recent
years, in terms of both size and rapid growth. This development has been
particularly important for the United States, as services are an area where the
United States is a world leader, and trade in services has recorded large and rising
surpluses in recent years while goods trade -- which has received much more
attention -- has recorded large deficits. Thus any complete discussion of U.S.
trade performance has to take account of developments in services as well as
goods.
Measures of the U.S. Trade Balance
(B/P data in SUS billions)
-20 , - - - - - - - - - - - - - - - - - - - - - - - - - - - . . , -20
,,
-40
,
.
-60
,
,
,,
,,
,-
. -.
.1
-. --.
-40
,,
,,
,,
-60
,
-80
-80
-100
-100
,,
-120
-120
-140
-140
-160
-160
-1~ ~---~---~---~---~---~---~-1~
1987
1988
1989
1990
1991
1992
1993
Goods Only Goods & Services
Soun:e: Survey d Cunenl BuaInesa, June 1894
The 1993 deficit on goods and services (G&S) trade was $75.7 billion, up
from $40.4 billion in 1992. The widening of the deficit was entirely due to a
larger deficit on goods trade; there was a slight increase in the already large
surplus on services transactions.
16
Cyclical Influences.
The 1993 goods trade balance reflected a continuation of the primarily
cyclical factors noted in the November 1993 Report. The U.S. goods deficit for
the full year (balance-of-payments basis) was $132.6 billion, up from $96.1 billion
for 1992. Exports totalled $456.9 billion, up $16.5 billion (under 4 percent) as
weak demand in Europe and Japan was only partially offset by strong export
growth to Latin America and East Asia, which avoided recession. Reflecting the
solid U.S. expansion during 1993, imports rose $53 billion (nearly 10 percent) to
$589.4 billion. Import growth was broadly based across a range of manufactures
and industrial materials. Capital goods, including computers, accounted for roughly
one-third of the increase.
Growing Role of Developing Countries.
Table 6 shows shifts in the geographic pattern of goods trade since 1991,
when the United States had its lowest annual trade deficit since 1983. The solid
competitive position of U.S. goods meant that exports could keep pace as long as
the market itself was growing. In developing economies where growth was strong
-- notably in Asia and certain countries in Latin America -- the goods trade deficit
was flat or declining. In those industrial regions where growth was weakest,
notably in Europe and Japan, the deficit widened. The notable exception to this
pattern, of course, was China, where exports rose substantially (albeit from a low
base) but imports rose by nearly two-thirds.
Table 6
U.S. Goods Trade with selected Areas: 1991, 1993
($billion; data from Survey of Current Business)
Country
or Region
Exports to
1991
1993
Imports from
1991
1993
Balance
1991
1993
W. Europe
Japan
China
116.8
47.2
6.3
111.3
46.9
8.7
102.0
92.3
19.0
121.0
107.3
31.5
+14.8
-45.1
-12.7
-9.7
-60.5
-22.8
Asian NIEs
44.4
50.1
59.2
64.5
-14.9
-14.5
L. America
Canada
OPEC*
Rest of Wid
63.3
85.9
13.8
39.2
78.2
101.2
14.2
46.3
63.0
93.0
25.3
37.1
75.2
113.0
24.2
52.8
+0.3
-7.1
-11.4
-1.9
+3.0
-12.1
-10.1
-5.9
416.9
456.9
491.0
589.4
-74.1 -132.6
TOTAL
*excl. Venezuela, which is included in Latin
k~erica
17
Current Account Follows Trade Deficit
The widening trade deficit was reflected in the current account balance, as
trade is by far the largest and most volatile component. Table 7 shows data for
the peak deficit year of 1987, for 1991 (post-1987 low point) and for 1993.
Table 7
U.S. Current Account: 1987; 1991; 1993
($billion; data from SCB)
Balance
Goods and
Services
Investment
Income
Transfers
Current Account
*
1987
1991
1993
-152
-28
-76
+8
-23
+15
-35*
+4
-32
-167
-49*
-104
Excludes $42 billion in one-time
transfers from allies to support Desert
Storm. Totals do not add due to rounding.
The succession of large current account deficits -- which began in the early
1980s and is not expected to be broken in the near future -- has eroded the U.S.
net investment position abroad and, inevitably, our net investment earnings. In
consequence, the surplus on net investment income which has been characteristic
of the U.S. balance of payments throughout the post-WWII period has disappeared,
leaving services as the only offset to adverse swings in the goods deficit.
Turning to the capital account, U.S. investors substantially increased their
purchases of foreign assets in 1993, in the form of both portfolio and direct
investments. U.S. purchases of foreign securities were about 2-1/2 times total
equivalent purchases for 1992; direct investment outflows were about 40 percent
above 1992 levels. Net flows of U.S. official capital were negligible.
18
Foreign purchases of U.S. securities also rose substantially -- over
50 percent -- compared with 1992. Foreign direct investment inflows, which
declined substantially in 1992, recovered somewhat in 1993, though they remain
well below the very high annual levels of 1987-90.
Table 8
Capital Flows, 1992-93
Selected Transactions, $billion
1992
1993
Direct Investment
(Inflows)
(Outflows)
-31.1
(+9.9)
(-41.0)
-36.5
+21. 4)
(-57.9)
Securities
(Inflows)
(Outflows)
+21. 6
(+66.7)
(-45.1)
-15.1
(+104.9)
(-120.0)
Official
Foreign
U.S.
+44.8
(+40.9)
(+3.9)
+70.2
(+71.6)
(-1. 4)
+38.9
+46.9
Other
-6.3
+38.4
TOTAL
+67.9
+103.9
Banks, net
Source: Survey of Current Business
Prospects for 1994.
As in 1993, relative growth performance in the U.S. and major foreign
economies will continue to dominate the trade and current account outlook for
1994. The U.S. economy will continue to expand, albeit at a more sustainable
pace, while the prospect is for only modest recovery in Europe, and the timing of a
recovery in Japan remains a question mark. In consequence, the U.S. trade and
current account deficits should continue to widen at least through the remainder of
1994. Data through April are consistent with this outlook. The deficit could
widen further in 1995, though at a slower pace as import growth moderates with
the slower pace of U.S. growth, and exports pick up with stronger demand in
Europe and, perhaps, Japan.
19
The evidence from data on costs and export performance indicates that the
competitive position of U.S. goods remains solid, so that U.S. exports should
respond well to stronger growth abroad. There has been substantial progress
made in reducing the federal budget deficit, which should be reflected in improved
national saving performance and a smaller external deficit than would otherwise be
the case. However, sustained declines in the external deficit, beyond the reversal
of cyclical effects in prospect, will require further improvements in U.S. saving
performance.
20
PART III: ACTIONS UNDER SECTION 30Q4
Section 3004 of the Omnibus Trade and Competitiveness Act of 1988
requires the Secretary of the Treasury to consider whether countries manipulate
the rate of exchange between their currencies and the U.S. dollar for the purposes
of preventing effective balance of payments adjustment or gaining competitive
advantage in international trade. Section 3004 also requires the Secretary to
undertake negotiations with those manipulating countries that have material global
current account surpluses, and significant bilateral trade surpluses with the United
States. This section summarizes the current status of Korea, Taiwan, and China,
countries that have in past reports been designated as manipulating the rates of
exchange between their currencies and the U.S. dollar.
Korea and Taiwan
It remains Treasury's judgement that neither Korea nor Taiwan is
manipulating its exchange rate within the meaning of Section 3004 of the Omnibus
Trade Act of 1988. Nevertheless, Treasury remains concerned about certain
financial and foreign exchange policies in both countries, particularly capital
controls, which discourage investment and impede the operation of market forces
in exchange rate determination.
Korea
The Korean won remains roughly unchanged since Treasury's last report in
November 1993. Korea's trade surplus with the United States rose slightly from
$2.0 billion in 1992 to $2.3 billion in 1993, while the country's overall current
account balance moved into a small surplus of $500 million.
Korea's strong economic performance and initial stock market-opening steps
resulted in large capital inflows in 1993 and early 1994. Concern about the effect
of these inflows on monetary growth and inflation prompted authorities to seek to
stem the capital inflows by imposing exchange controls early in 1994 which placed
onerous requirements on foreign investors and succeeded in dampening these
inflows.
Treasury continues to engage the Korean government as it implements its
five year financial sector liberalization plan. Having set its sights on achieving
OECD membership by 1996, the Korean Government has recently announced that
financial sector liberalization will be accelerated to accomplish that goal. This plan
includes projected steps to liberalize controls on capital flows and current account
payments, including regulations that limit payback periods to only a fraction of
international norms, and access of foreign financial institutions to Korea's financial
21
markets. Treasury will continue to engage in negotiations with the Korean
Government to achieve satisfactory results in these areas.
Taiwan
The New Taiwan dollar also remained roughly constant against the U.S.
dollar since Treasury's November report. Adjustment in Taiwan's external
surpluses continued. Taiwan's overall current account surplus fell to $5.8 billion in
1993 from $8.2 billion in 1992. The shrinkage stems from slow recovery in
Taiwan's export markets as well as increasing competition from other exporting
economies in the region. Taiwan's trade surplus with the United States declined
slightly from $9.4 billion in 1992 to $8.9 billion in 1993.
While Taiwan has incrementally relaxed certain limitations on foreign
exchange transactions and capital flows, the pace of reform has been very slow.
Key restrictions on Taiwan's financial markets, which constrain pressure for NT
dollar appreciation, remain in place. Of particular concern in recent months has
been the ceiling on foreign institutional investment inflows. By December 1993,
foreign institutional investment was nearing the $5 billion ceiling. Taiwan's
authorities waited until March 5 before raising the ceiling to $ 7.5 billion, but, at
the same time, they set a new limit of $2.5 billion for capital raised on foreign
stock markets by local securities investment trust companies (these funds were
not previously subject to any limit).
Building on its existing bilateral talks with Taiwan, Treasury has raised these
issues in the context of Taiwan's current GATT accession negotiations. In
particular, Treasury is engaging in negotiations with Taiwan's authorities regarding
liberalization of Taiwan's financial markets. Treasury will participate in GATT
negotiations regarding a special exchange agreement, which is aimed at ensuring
that Taiwan's foreign exchange regime does not impede trade and investment.
Treasury hopes that these issues can be addressed expeditiously in the GATT
accession process.
China
Treasury welcomes China's decision to unify its dual exchange rates as of
January 1, 1994. Nonetheless, further reforms implemented on April 1, 1994
excluded foreign enterprises from the interbank foreign exchange market and
imposed restrictions that limit their access to foreign exchange. Based on China's
continued reliance on foreign exchange restrictions that could limit imports, it is
Treasury's judgement that China manipulates its exchange system to prevent
effective balance of payments adjustment and gain unfair competitive advantage in
international trade. Treasury urges the Chinese authorities to eliminate the
segmentation of the foreign exchange market and restrictions on access to foreign
22
exchange. Such steps would facilitate imports and promote adjustment in China's
large bilateral surplus with the United States.
Trade and Economic Developments
According to Chinese customs figures, China's trade balance deteriorated
from a surplus of $4.4 billion in 1992 to a deficit of $12.2 billion ;n 1993 while
China's current account deficit was approximately $9.6 billion in 1993. However,
China's reported current account deficit was more than offset by a net capital
inflow of $20.5 billion. As a result, at end-December 1993, China's foreign
exchange reserves stood at $49.9 billion (equivalent to 6 months of imports), up
from $38.2 billion at end-June 1993. 1 China's external debt remains modest.
Total external debt stood at $77 billion at the end of 1993 while China's debtservice ratio was 12 percent. Chinese trade figures suggest that China's external
position has improved somewhat in 1994. For January-March 1994, China's
exports increased faster than imports, resulting in a trade deficit of $1.3 billion.
Table 9
Chinese Balance of payments Figures
($ Billions)
1990
Trade Balance
8.7
Current Account
12.0
Capital Account
3.3
Net Errors & Omissions -3.1
Increase in Reserves
-12.0
(- = increase)
1991
8.2
13.3
8.1
-6.8
-14.5
1992
4.4
6.4
-0.2
-8.3
2.1
1993
-12.2
- 9.6
20.5
- 9.1
-
1.8
Q I
1994
-1.3
na
na
na
ns
Source: Chinese and IMF Statistics
However, China's trade data are inconsistent with those of its trading
partners. Chinese figures probably significantly underestimate exports as the
requirement that exporters sell foreign exchange to designated banks creates
incentives for exporters to hold foreign exchange offshore. In 1992, for example,
China reported total exports of $85 billion while partner countries reported imports
from China of $134 billion. Some of this discrepancy arises from: 1} valuation
differences (China reports f.o.b. exports while partners report c.i.f. imports); and
2) goods transshipped through Hong Kong and counted as imports by both Hong
Kong and China's other trading partners. However, even after adjusting for these
1 This figure includes reserves of the People/s Bank of China ($23.1 bilfion) as well as the Bank
of China ($25.8 billion). China does not include the latter in its official reserve figures.
23
factors, partner countries report $9 billion more in Chinese exports than China
reports as exports.
According to U.S. data, China's trade surplus with the United States
increased from $18.3 billion in 1992 to $22.8 billion in 1993. U.S. exports to
China rose 18 percent to $8.8 billion while U.S. imports from China rose 23
percent to $31.5 billion. U.S. consumption of low cost, labor intensive goods
produced by China continues to grow rapidly. Footwear, toys, apparel, and plastic
goods constituted the fastest growing categories of U.S. imports from China. On
the export side, U.S. exports of capital goods are increasing most rapidly.
Automobiles, telecommunications equipment, aircraft, and specialized industrial
machinery constituted the fastest growing categories of U.S. exports to China.
In 1993, China continued to grow rapidly. China's GDP grew 13.4 percent
in real terms while real industrial production rose 30 percent and retail sales rose
35 percent in nominal terms. Rapid growth was caused by high fixed investment
and accommodating monetary policy. Nominal fixed investment by state
enterprises increased 58 percent in 1993 while broad money increased 24 percent.
Loose monetary policy led to high domestic demand and increasing inflation. The
retail price index rose 18 percent for the year ending in December 1993 while the
cost of living in 35 cities rose 24 percent.
The authorities attempted to slow the economy in July 1993 with a 16-point
austerity program. This program achieved some initial results as real industrial
production fell from 30 percent for the year ending June 1993 to 16 percent for
the year ending October 1993. However, credit problems in state enterprises
forced the central government to ease credit. The People's Bank of China
reportedly increased base money by 150 billion yuan in September and October.
In the first quarter of 1994, economic activity moderated somewhat but
nonetheless remained strong. Real GDP rose at a 12.7 percent annual rate.
Industrial production was up 19 percent in real terms for the year ending in March
1994 while nominal retail sales increased 24 percent. The nominal growth of fixed
investment by state enterprises declined to 36 percent for the same period. While
production has slowed, inflation continues to rise. For the year ending in March
1994, retail prices rose 24 percent while the cost of living in 35 cities rose 25
percent. The government is now attempting to tighten the money supply, largely
through administrative measures. The government has also resorted to price
controls on basic commodities and services in an attempt to slow inflation.
China's Foreign Exchange System
On January 1, 1994 China unified its dual exchange rates at the more
depreciated swap center rate and announced it would abolish swap centers in
24
favor of an interbank market for foreign exchange. The new, unified exchange
operates as a managed float, with the People's Bank of China (PBOC) setting each
day's exchange rate according to market conditions and relative to the price for
foreign exchange on the previous day. While domestic firms are still required to
surrender their foreign exchange, China announced that government approval
would no longer be required for purchases of foreign exchange for trade and traderelated current account transactions. Moreover, companies are allowed to
purchase foreign exchange automatically from designated banks upon presentation
of: 1) an import contract; 2) a request for payment from a foreign institution; and
3) an import license (if required). 2
On March 26, 1994 the Chinese Government issued new foreign exchange
regulations that went into effect on April 1, 1994. In many areas, the new foreign
exchange regulations are in line with previous announcements. Chinese firms are
permitted to buy foreign exchange for specified purposes upon presentation of
required documents. Permitted transactions include purchase of foreign exchange
to buy imported inputs, to repay foreign debt, and to remit dividends abroad.
However, the Chinese authorities segmented China's foreign exchange market by
excluding foreign-funded enterprises from the new interbank market for foreign
exchange. While Chinese firms may purchase foreign exchange through
designated banks (which in turn trade through the interbank market)' foreignfunded firms must use the existing swap centers.
The new regulations maintain the requirement that foreign enterprises
balance their foreign exchange earnings and expenditures. Foreign-funded
enterprises that have a deficit or surplus of foreign exchange may trade in the
swap centers but only with other foreign-funded enterprises. The Chinese
authorities have also indicated that the State Administration of Exchange Control
(SAEC) must approve individual foreign exchange transactions and has the
authority to deny access to foreign exchange for purposes that do not accord with
national policy. However, there are no clear public regulations stipulating the
conditions under which foreign-funded enterprises can purchase foreign exchange.
Exchange Rate Developments
In 1993, China's administered exchange rate depreciated less than one
percent from 5.75 yuan/dollar to 5.80 yuan/dollar. China's more market-oriented
swap rate depreciated 19 percent, rising from 7.30 yuan/dollar at the end of 1992
to 8.71 yuan/dollar at the end of 1993.
2 In 1992, 53 broad categories of goods accounting for 25 percent of China's total imports
were subject to licensing.
25
On January 1, 1994, China's dual exchange rates were unified at the rate of
8.72 yuan/dollar. The unification represented an effective depreciation of 7.2
percent as enterprises previously importing goods at the administered rate were
forced to use the more depreciated swap rate. As of end May, the unified
exchange rate had appreciated slightly to 8.68 yuan/dollar. After dropping for
several years, China's real effective exchange rate against the dollar has remained
steady in the last two years. Nominal depreciation of the renminbi was offset by
higher inflation in China than in the United States.
Table 10
China: Nominal Exchange Rate Index
(End of Period)
1990
United States
Japan
EC
100
100
100
1991
96.4
88.7
98.9
1992
80.2
73.7
91.1
1993
68.9
56.7
84.8
Table 11
China: Real Exchange Rate Index
(End of Period)
1990
United states
Japan
EC
100
100
100
1991
97.2
99.9
98.6
1992
83.9
78.8
93.8
1993
82.4
70.5
101.3
Exchange Rate Negotiations
On April 21, 1994, the Treasury Department held negotiations with the
People's Bank of China in the context of the Exchange System Reform Working
Group of the Joint Economic Committee. 3 Treasury welcomed the unification of
China's exchange rate and moves to make the renminbi convertible for trade and
trade-related transactions. However, Treasury noted that certain measures
appeared to be a step backward from China's initial reform plans. In particular, the
exclusion of foreign-funded enterprises from the interbank market and the
enforcement of foreign exchange balancing requirements could restrict access to
foreign exchange. The requirements that foreign-funded enterprises use swap
3 The Joint Economic Committee is a forum for the U.S. and Chinese governments to exchange
views on economic issues of mutual concern. After a lapse of seven years, the Joint Economic
Committee was revived in modified form in a meeting chaired by Treasury Secretary Bentsen and
Minister of Finance Uu in Beijing on January 21, 1994. Both sides agreed to the formation of new
working groups to discuss monetary and banking issues, exchange system reform, and investment.
26
centers and that the SAEC must approve access to the centers have the potential
to act as barriers to trade and thus could increase China's bilateral trade surplus
with the United States. The Chinese authorities were urged to eliminate these
restrictions as soon as possible. Treasury noted that elimination of restrictions
would facilitate China's move toward current account convertibility, improve the
efficiency of China's economic system, and promote further reform of the Chinese
economy.
Assessment
Treasury welcomes unification of China's exchange rates as an important
step that will facilitate China's GATT accession and movement toward full
convertibility on the current account. At the same, Treasury remains concerned
that restrictions on access to foreign exchange remain. In particular, the denial of
foreign funded enterprises' access to the interbank market and the enforcement of
foreign exchange balancing requirements could be used to reduce imports,
including those from the United States. Moreover, there are no clear public
regulations stipulating the conditions under which foreign funded enterprises may
purchase foreign exchange. If the Chinese exchange rate comes under pressure,
the SAEC could use its authority to deny foreign funded enterprises' access to the
swap centers and maintain the stability of the renminbi. Thus, it is Treasury's
view that China continues to manipulate its foreign exchange system.
Treasury will continue to negotiate with the People's Bank of China
bilaterally and in the GATT accession context to promote further reform of China's
exchange system aimed at achieving a market-oriented system of exchange rate
determination and foreign exchange allocation.
APPENDIX 1 - OMNIBUS TRADE AND COMPETITIVENESS ACT OF 1988
(H.R. 3)
SEC. 3004. INTERNATIONAL NEGOTIATIONS ON EXCHANGE RATE AND
ECONOMIC POLICIES.
(a)
Multilateral Negotiations.--The President shall seek to confer and negotiate
with other countries-( 1) to achieve--
(2)
(A)
better coordination of macroeconomic policies of the major
industrialized nations; and
(8)
more appropriate and sustainable levels of trade and current
account balances, and exchange rates of the dollar and other
currencies consistent with such balances; and
to develop a program for improving existing mechanisms for
coordination and improving the functioning of the exchange rate
system to provide for long-term exchange rate stability consistent
with more appropriate and sustainable current account balances.
(b)
Bilateral Negotiations.--The Secretary of the Treasury shall analyze on an
annual basis the exchange rate policies of foreign countries, in consultation with
the International Monetary Fund, and consider whether countries manipulate the
rate of exchange between their currency and the United States dollar for purposes
of preventing effective balance of payments adjustments or gaining unfair
competitive advantage in international trade. If the Secretary considers that such
manipulation is occurring with respect to countries that (1) have material global
current account surpluses; and (2) have significant bilateral trade surpluses with
the United States, the Secretary of the Treasury shall take action to initiate
negotiations with such foreign countries on an expedited basis, in the International
Monetary Fund or bilaterally, for the purpose of ensuring that such countries
regularly and promptly adjust the rate of exchange between their currencies and
the United States dollar to permit effective balance of payments adjustments and
to eliminate the unfair advantage. The Secretary shall not be required to initiate
negotiations in cases where such negotiations would have a serious detrimental
impact on vital national economic and security interests; in such cases, the
Secretary shall inform the chairman and the ranking minority member of the
Committee on Banking, Housing, and Urban Affairs of the Senate and of the
Committee on Banking, Finance and Urban Affairs of the House of Representatives
of his determination.
1
SEC. 3005. REPORTING REQUIREMENTS.
(a)
Reports Required .--In furtherance of the purpose of this title, the
Secretary, after consultation with the Chairman of the Board, shall submit to the
Committee on Banking, Finance and Urban Affairs of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the Senate, on or
before October 15 of each year, a written report on international economic policy,
including exchange rate policy. The Secretary shall provide a written update of
developments six months after the initial report. In addition, the Secretary shall
appear, if requested, before both committees to provide testimony on these
reports.
(b)
contain--
Contents of Report.-- Each report submitted under subsection (a) shall
(1)
an analysis of currency market developments and the
relationship between the United States dollar and the currencies
of our major trade competitors;
(2)
an evaluation of the factors in the United States and other
economies that underlie conditions in the currency markets,
including developments in bilateral trade and capital flows;
(3)
a description of currency intervention or other actions
undertaken to adjust the actual exchange rate of the dollar;
(4)
an assessment of the impact of the exchange rate of the United
States dollar on-(A)
(B)
(C)
the ability of the United States to maintain a more
appropriate and sustainable balance in its current account
and merchandise trade account;
production, employment, and noninflationary growth in
the United States;
the international competitive performance of United
States industries and the external indebtedness of the
United States;
(5)
recommendations for any changes necessary in United States
economic policy to attain a more appropriate and sustainable
balance in the current account;
(6)
the results of negotiations conducted pursuant to section 3004;
2
(c)
(7)
key issues in United States policies arising from the most recent
consultation requested by the International Monetary Fund
under Article IV of the Fund's Articles of Agreement; and
(8)
a report on the size and composition of international capital
flows, and the factors contributing to such flows, including,
where possible, an assessment of the impact of such flows on
exchange rates and trade flows.
Report by Board of Governors.--Section 2A( 1) of the Federal Reserve
Act (12 U.S.C. 225a(1)) is amended by inserting after "the Nation"
the following: ", including an analysis of the impact of the exchange
rate of the dollar on those trends".
SEC. 3006. DEFINITIONS.
As used in this subtitle:
(1) Secretary.--The term "Secretary" means the Secretary of the
Treasury.
(2) Board.--The term "Board" means the Board of Governors of the
Federal Reserve System.
3
DEPARTMENT
OF
THE
TREASURY
lREASURY.
~
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
Adv. for 2:15 p.m. EDT
Text as prepared for delivery
July 21, 1994
REMARKS OF TREASURY SECRETARY LLOYD BENTSEN
BRETTON WOODS COMMISSION
I want to congratulate Paul Volker and the Commission for producing an
excellent body of work. It's a pointed report, with very direct recommendations. And I'm
sure you're having some good discussions today. The ideas out on the table now will
help all of us as we debate matters that affect the World Bank and the International
Monetary Fund, and other issues as well. You've performed quite a service.
We talked about the World Bank and the IMF a couple of weeks ago in Naples
at our G-7 meeting. In fact, the first thing the leaders said in the communique was that
we must renew and revitalize these institutions. The challenges are changing. There are
new responsibilities to be met.
We agreed that next year we'll focus on how to be certain the economy of the
next century brings global sustainable development and prosperity. We agreed also to
look at what framework of institutions it will take to meet our challenges, how they can
be adapted, and others built, to accomplish that mission.
That's a tall order. We're starting some of the most serious debate on these
issues here. And I expect that the Bank and IMF shareholders will have more to say this
fall in Madrid. One thing's for certain -- these are big institutions. And at a time when
every nation is strapped for resources, they're going to be increasingly important.
Today I want to look at the last 50 years, and the coming era from the U.S.
perspective -- offer a few thoughts of my own.
Before I looked at the Commission report I wanted to refresh my memory on
Bretton Woods. Richard Gardner, our ambassador to Spain, has updated his '50s work,
"Sterling-Dollar Diplomacy." It's an interesting review and a projection of the challenges
that lie down the road for us.
LB-964
2
He describes it as a political miracle this all came together. I suspect that if we
tried to do it all over again there are some ideas that wouldn't get out of a subcommittee
up on Capitol Hill.
This political miracle was pulled off because we were at a singular moment in
history. We are today in the midst of something similar. Not as dramatic as the end of
a World War, but a period with the same potential for affecting lives for the better. The
necessary change can be accomplished with what Ambassador Gardner describes as the
"common commitment to practical and constructive internationalism that the founding
fathers of these institutions demonstrated."
Our challenges and responsibilities lie in the developing world, in the economies
in transition, in properly managing economic integration, in encouraging high-quality
growth and jobs in the developed nations, and taming population growth.
What are today's conditions?
We now have a world linked not by a common enemy but by a common goal-growth and jobs. To say the world today is smaller is putting it mildly. I can send a fax
to Tokyo faster than I could get a call through to Texas when I first came to Washington.
Trade and investment are growing faster than income. Hundreds of billions of
dollars cross borders at the speed of light every day.
Developing nations with nearly 3 billion people are entering the modem age.
That's history in the making, and an enormous opportunity for risk-takers. The growth
in Asia, for example, is almost palpable -- you can almost see national economies
changing and growing day by day.
And we now have huge economies in transition -- 400 million people in Eastern
Europe and Russia making a change. Let me digress just a moment to say that I'm
pleased to see inflation in Russia down now, and privatization coming along. The
international community, the Bank and the IMP have all helped with what is the largest
economic reconstruction ever undertaken. There's still much to be done, and it's one of
our prime challenges in the years ahead.
That's the world we face now. Not devastated economies that had to be rebuilt,
but a growing global economy where economic institutions and prosperity hold the
prospect of preserving the peace the way the security institutions and the balance of
power did in another era.
The question we must address is: where to from here?
The institutions, to their credit, are already adapting.
3
The IMF, an institution established to support a foreign exchange system and
keep industrial nations liquid, is encouraging and supporting economic stabilization in
emerging economies.
The World Bank -- where the word "development" was a farsighted addition to the
institutional name -- is taking the first steps at changing management practices and the
focus of its activities to better accomplish the long-term goal of development.
In the critical area of trade, we have seen several rounds of liberalization. Trade
is of increasing importance to the United States -- one job in 13 now depends on it.
The latest liberalization, the Uruguay Round, is bringing a strong third leg to the
Bretton Woods system -- the World Trade Organization. It promises a system of greater
trade discipline. This agreement has the potential to be a major job creator, and not just
in the United States. And it's a huge tax cut.
But we must look beyond that. Each institution must focus on the new mission -growth and jobs, prosperity, and peace. The international community must do the same.
The Clinton Administration recognize its responsibility in this regard early on.
We listened to the international community and significantly brought down our deficit to
aid not only our economy, but the global economy as well. And, at a time when
resources are limited, we are beginning to meet our commitments to the development
banks. We intend to pay our overdue bills to institutions which are critical to supporting
regional development and growth. We are turning the comer this year. And next year
we hope to do even better.
The time has long since passed when any nation or group of nations can afford a
Marshall Plan approach to the major economic problems we see, such as helping
economies in transition. That's why we must rely on the international financial
institutions.
There have already been discussions about how the institutions can best meet new
challenges. For instance, the IMF is now examining an allocation of Special Drawing
Rights to equalize the holdings of the Fund's members. That would make additional
hard currency resources available. The United States supports an increase in SDRs for
new members. And at the G-7 meeting we discussed the possibility of a modest increase
in SDRs for existing members.
The United States also supports raising the quota percentage to which the IMF
permits access by member nations to support economic reform. I would note that the
Fund is about as strong as it's ever been in terms of resources, so there's room for an
increased access to credit.
4
I believe we should also be discussing how the IMF and the World Bank can even
more effectively assist countries emerging from conflict or undergoing the kinds of
wrenching transformations we see taking place. Increasingly, we will have to think about
how resources can be mobilized to support investments in one country that benefit many
countries. The Global Environmental Fund is an important start. But I believe we need
to be innovative and creative in how the resources of the international financial
institutions are mobilized to meet many kinds of needs which can't be fully met by hard
loans on commercial terms.
I am pleased to see that the Bretton Woods Commission made recommendations
on the World Bank that parallel what I have proposed to Congress and which I discussed
earlier this year with the Development Committee. There will be a lot of discussion in
the coming months on how the World Bank can move forward. I'm pleased that the
Bank is beginning to formulate answers as to how best to promote sound development
throughout the world.
Priorities should be on getting the most development impact possible from bank
lending. People must be put first. They are the developing world's most important
resource. Investments in the social sector can offer as good or better a long-term return
and contribution to rising prosperity than a bridge or a highway. Education, training,
health care, family planning all need more policy attention.
And we must remember that it is not government that creates jobs, other than in
a short-term sense. It is the private sector that produces economic growth and creates
jobs. The banks must ensure that their work supports, not supplants, private sector
finance. Financial sector reform must be a priority. And I would encourage the banks
to find innovative ways to encourage the flow of private capital to developing nations.
Additionally, the emphasis must be on development from the bottom up, with
local participation to increase effectiveness. I've run a business, and I know there's
absolutely no substitute for being out in the field, seeing what's going on, finding frrsthand what works and what doesn't.
In trade, we cannot sit back and think completing the Uruguay Round and
establishing the WTO is the end of the road. It isn't. Anything that brings down a trade
barrier is by definition good, whether it's one country reducing a tariff, a deal between
two nations, a regional agreement, or a new round of global tariff reductions.
We look forward to extending our network of free trade agreements. And let me
emphasize, these are not exclusionary agreements. They are to spread the net of free
trade even wider.
5
The international financial institutions can help insofar as trade is concerned.
Encouraging economic policies that promote growth and development can contribute to
global trade growth.
I saw a figure the other day that makes that case. In the last dozen years the
World Bank has made 238 loans for a total of $35 billion in which the loans were tied to
trade liberalization. Our exports to countries which took the loans grew nearly 12
percent a year. Our sales to countries that did not take out the loans and did not
liberalize trade grew by less than 4 percent a year.
I want to close by touching on the issue of coordinating economic policies. It's
one of the more controversial aspects of the Bretton Woods report.
Some say a more institutionalized approach to policy coordination is necessary.
That was one of the goals in 1944, to stabilize exchange rates. In theory, not a bad idea.
In practice, it's much more difficult than it might first appear.
Before I deal with some specific observations, let me say first that I recognize the
increasing need to cooperate globally. The smaller the world, the greater the need.
We're doing that, with the G-7, with the Asia-Pacific Economic Cooperation group and
other organizations, and with individual countries. But for the foreseeable future, there
will continue to be a system of government in which the nation-state is a dominant
element. The commitment of the citizen -- to support and defend -- is to the nation, the
entity democratically accountable to the citizens it represents. Moreover, a nation must
retain the ability to act on its own to protect its interests or influence events.
As to policy coordination, a flexible approach is best. To control fiscal and
monetary policy, a rigid system would require coordinating the actions not only of
finance ministries, but also legislatures and central banks. That's a tall order. A flexible
approach takes into account diverse opinions. Besides, economics is not exactly an exact
science, and there's always the law of unintended consequences, not to mention the
human factor.
What is ultimately important to economic performance is sound policy. I prefer
an approach to broad policy coordination that relies on quiet communication and
persuasion to produce results. We have demonstrated that we can work together, and
the finance ministries and central banks will continue to work together on our goal of
strong, non-inflationary growth that provides jobs.
6
As part of our process of communication, we recognize that increasingly particular
sectors have a growing impact on the broader performance of an economy, areas such as
financial regulation and manpower training. Cooperation at that level can have
important benefits. That's why the Clinton Administration organized the Detroit jobs
conference. We are also broadening the communications process, through work with
APEC, and the Summit of the Americas later this year.
Quiet cooperation and consultation is the best practical approach now to greater
economic stability.
The last point I would make is that at the G-7 meeting the leaders asked the
finance ministers to continue to anticipate problems that might arise in keeping the
recovery on track. I've believe the Fund could assist by operating as a global early
warning radar for economic threats that lie over the horizon. At the national level and
even G-7 level we're often focused on the task immediately at hand. Extra help raising
longer term warning flags can make a difference. Any sailor will tell you a small course
correction can keep you off a shoal.
Let me close with this observation: My predecessor, Henry Morganthau, gave a
radio address to explain Bretton Woods to Americans. He pointed to the need for
international cooperation, which is truer today than ever. And he described the
conference's work as a "signpost pointing down a highway broad enough for all men to
walk in step and side by side." For half a century that signpost has pointed the way to a
better future for us all. When the history of Bretton Woods' first century is written, it
must be said that we widened that highway and put more people on the path to a better
future.
Thank you.
-30-
Monthly Treasury Statement
of Receipts and Outlays
of the United States Government
For Fiscal Year r994 fhtotJgh June 30, 1994, and Other Periods
Highlight
The budget estimates provided in Tables 2 and 3 are based on the Mid-Session Review of the
FY 1995 Budget, released by the Office of Management and Budget on July 14, 1994.
This issue includes the semi-annual interest payment to trust funds investing in government securities.
RECEIPTS, OUTLAYS, AND SURPLUS/DEFICIT
THROUGH JUNE 1994
1200
B
I
L
L
I
o
N
S
Contents
Summary, page 2
1000
Receipts, page 6
800
Outlays, page 7
Means of financing, page 20
600
Receipts/outlays by month, page 26
400
Federal trust funds/securities, page 28
Receipts by source/outlays by
function, page 29
200
Explanatory notes, page 30
o
Compiled and Published by
Department of the Treasury
Financial Management Service
Introduction
of receipts are treated as deductions from gross receipts; revolving and manage.
ment fund receipts, reimbursements and refunds of monies previously expended are
treated as deductions from gross outlays; and interest on the public debt (PUblic
issues) is recognized on the accrual basis. Malor information sources include
accounting data reported by Federal entities, disbursing officers, and Federal
Reserve banks.
The Monthly Treasury Statement of Receipts and Outlays of the United States
Government (MTS) IS prepared by the Financial Management Service. Department of
the Treasury. and after approval by the Fiscal Assistant Secretary of the Treasury. is
normally released on the 15th workday of the month following the reporting month.
The publication IS based on data provided by Federal entities. disbursing officers.
and Federal Reserve banks.
Triad of Publications
The MTS is part of a triad of Treasury financial reports. The Daily Treasury
Statement is published each working day of the Federal Government. It provides
data on the cash and debt operations of the Treasury based upon reporting of the
Treasury account balances by Federal Reserve banks. The MTS is a report of
Government receipts and outlays, based on agency reporting. The U.S. Government
Annual Report is the official publication of the detailed receipts and outlays of the
Government. It is published annually in accordance with legislative mandates given
to the Secretary of the Treasury.
Audience
The MrS IS published to meet the needs of: Those responsible for or interested
In the cash position of the Treasury; Those who are responsible for or interested in
the Government's budget results; and individuals and businesses whose operations
depend upon or are related to the Government's financial operations.
Disclosure Statement
This statement summarizes the financial activities of the Federal Government
and off-budget Federal entities conducted in accordance with the Budget of the U.S.
Government. i.e .. receipts and outlays of funds, the surplus or deficit, and the means
of financing the deficit or disposing of the surplus. Information is presented on a
modified cash basis: receipts are accounted for on the basis of collections; refunds
Data Sources and Information
The Explanatory Notes section of this publication provides information conceming the flow of data into the MrS and sources of information relevant to the MrS.
Table 1. Summary of Receipts, Outlays, and the Deficit/Surplus of the U.S. Government, Fiscal Years 1993 and 1994,
by Month
[$ millions]
Period
FY 1993
October
November
December
January
February
March
April
May
June
July ...
August
September
Year-to-Date .••. _..•...•...• _.. _•...•..
FY 1994
October
November
December
January
February
March
April
May
June
Year-to-Dale
Outlays
Receipts
Deficit/Surplus (-)
76,829
74,629
113.686
112.716
65,979
83,288
132.017
70,642
128.570
80,630
86.737
127.504
125,620
107,355
152,633
82.899
114,477
127.263
124,200
107.605
117,471
120.207
109,815
118.939
48,792
32.726
38.947
-29,817
48.498
43.974
-7.817
36.963
-11.099
39.577
23.078
-8.565
11,153,226
11,408,484
1255,258
78,668
83.107
125,408
122.966
72,874
93.108
141,326
83.546
138,124
124,090
121,488
133,660
107.718
114,440
125,423
123.872
115.600
122.923
45,422
38.381
8,252
-15.248
41.566
32.315
-17.454
32.054
-15.202
939,126
1,089,213
150,087
'The receipt. outlay and deficit figures differ from the FY 1995 Budget, released by the Office
of Management and Budget on February 7,1994, by $589 million due mainly to revisions in data
follOWing the release of the Final September Monthly Treasury Statement.
2
Table 2. Summary of Budget and Off-Budget Results and Financing of the U.S. Government, June 1994 and
Other Periods
[$ millions]
Current
Fiscal
Year to Date
This
Month
Classification
Total on-budget and off-budget results:
Total receipts ...............
Budget
Estimates
Full Fiscal
Year 1
Prior
Fiscal Year
to Date
(1993)
Budget
Estimates
Next Fiscal
Year (1995) 1
138,124
939,126
1,259,905
858,355
1,354,333
On-budget receipts .........
Off-budget receipts ..................................
106,014
32.110
685,854
253.272
925,569
334.336
623,449
234.907
1.000.459
353.874
.. . . . . . .
122,923
1,089,213
1,480,013
1,059,523
1,521,447
. , . . . . . . . .. . . . . . . . . . . . . . . . . .
On-budget outlays
. ............
Off-budget outlays ......
107,966
14,956
889,897
199,316
1,199,239
280,774
869,897
189,626
1,229,419
292,028
+15,202
-150,087
-220,108
-201,167
-167.114
-1,952
+17.154
-204,043
+53,956
-273,670
+53,562
-246,448
+45,281
-228.960
+61,846
Total on-budget and off-budget financing ..
-15,202
150.087
220,108
201,167
167,114
Means of financing:
....................
Borrowing from the public
Reduction of operating cash. increase (-) .........
By other means . ....................................
1,898
-23,797
6,697
148.235
1,515
337
210,584
12,506
-2,982
202,609
-1,799
358
175,699
Total outlays ...........
...........
. . . . ... .. . ..
Total surplus (+) or deficit (-) ..
On-budget surplus (+) or deficit (-)
Off-budget surplus (+) or deficit (-)
..............
.,
........ , ...
..............
... No Transactions.
Note: Details may not add to lolals due to rounding.
'These figures are based on the Mid-Session Review of the FY 1995 Budget. released by the
Office of Management and Budget on July 14. 1994.
Figure 1. Monthly Receipts, Outlays, and Budget Deficit/Surplus of the U.S. Government, Fiscal Years 1993 and 1994
$ billions
Outlays
.., ,,
'-:
Receipts
Deficit( -)/SU rplus
Oct.
Dec.
Feb.
Apr.
Jun.
Aug.
Oct.
FY
94
FY
93
3
Dec.
Feb.
Apr.
Jun.
-8,585
Figure 2.
Monthly Receipts of the U.S. Government, by Source, Fiscal Years 1993 and 1994
$ billions
ITotal Receipts
I
1
Dec.
Figure 3.
Feb.
Apr.
Jun.
Aug.
Oct.
FY
FY
93
94
Dec.
Feb.
Apr.
Jun.
Monthly Outlays of the U.S. Government, by Function, Fiscal Years 1993 and 1994
$ billions
Total Outlays
Oct.
Dec.
Feb.
Apr.
Jun.
Aug.
Oct.
FY
FY
93
94
4
Dec.
Feb.
Apr.
Jun.
Table 3. Summary of Receipts and Outlays of the U.S. Government, June 1994 and Other Periods
[$ millions]
This Month
Current
Fiscal
Year to Date
Individual income taxes .......................... .. ............ '
Corporation income taxes .......................... . .......... ..
Social insurance taxes and contributions:
Employment taxes and contributions (off-budget) ........... .
Employment taxes and contributions (on-budget) ............ .
Unemployment insurance ..................................... .
Other retirement contributions ................................ .
Excise taxes ..................................................... .
Estate and gift taxes ............................... .. ........ ..
Customs duties ................................................. ..
Miscellaneous receipts ................ " " " " . " " ............. .
58.123
29.114
404,232
106,207
377.104
88,372
549,583
139,374
32,110
8,742
290
366
4,596
1,068
1,711
2,003
253,272
69,681
21,379
3,434
39,544
11,671
14,479
15,226
234,907
63,522
19,624
3,538
35,164
9,433
13,567
13,124
334,336
93,763
27,767
4,729
54,594
14,197
20,064
21,497
Total Receipts ....... _........................................ .
138,124
939,126
858,355
1,259,905
(On-budget) ................................................. .
106,014
685,854
623,449
925,569
(Off-budget) ................................................ .
32,110
253,272
234,907
334,336
191
159
14
186
4,164
201
23,195
2,542
2,144
1,568
1,942
1,874
156
9,025
47,661
2,179
198,403
22,615
17,460
12,965
1,800
1,867
147
10,034
52,065
1,999
209,615
21,942
22,892
12,395
2,749
2,870
197
11,369
63,250
3,276
267,404
30,623
25,708
17,296
26,911
30,081
2,125
634
790
2,793
338
3,187
229,933
235,082
19,516
5,009
7,435
28,966
4,002
27,132
209,578
223,315
18,641
4,751
7,726
34,052
4,185
24,406
314,964
314,747
26,337
7,083
10,744
36,917
5,786
36,820
53,306
-181
3,001
520
475
1,105
3,361
68
240,416
11,013
26,970
4,222
393
10,004
28,634
483
238,567
7,585
26,160
4,331
775
10,606
27,461
611
299,003
11,115
37,898
6,238
783
14,227
38,177
1,049
Classification
Comparable
Prior Period
Budget
Estimates
Full Fiscal Year'
Budget Receipts
Budget Outlays
Legislative Branch ............ . ................................. .
The Judiciary .................................................... .
Executive Office of the President ............................. ..
Funds Appropriated to the President ........................... .
Department of Agriculture ....................................... .
Department of Commerce ...................................... .
Department of Defense-Military .............................. ..
Department of Defense-Civil .................................. .
Department of Education ...................................... ..
Department of Energy ........................................... .
Department of Health and Human Services, except Social
Security ................................................. .
Department of Health and Human Services, Social Security .. .
Department of Housing and Urban Development .............. .
Department of the Interior ...................................... .
Department of Justice ........................................... .
Department of Labor ........................................... ..
Department of State .... " ...................................... .
Department of Transportation ................................... .
Department of the Treasury:
Interest on the Public Debt ................................. ..
Other ......................................................... ..
Department of Veterans Affairs ................................. .
Environmental Protection Agency ............................. ..
General Services Administration ............................... ..
National Aeronautics and Space Administration ................ .
Office of Personnel Management .............................. ..
Small Business Administration ................................. ..
Other independent agencies:
Resolution Trust Corporation ....................... ..
Other .......................................................... .
Undistributed offsetting receipts:
Interest ........................................................ .
Other .......................................................... .
1,233
-1,953
3,911
2,233
-16,318
5,113
7,102
9,473
-36,407
-2,827
-84,870
-25,549
-81,493
-25,282
-85,891
-37,300
Total outlays .................................................. .
122,923
1,089,213
1,059,523
1,480,013
(On-budget) ................................................. .
107,966
889,897
869,897
1,199,239
280,774
(Off-budget) ................................................ .
14,956
199,316
189,626
Surplus (+) or deficit (-) ................................... .
+15,202
-150,087
-201,167
-220,108
(On-budget) ................................................. .
-1,952
-204,043
-246,448
-273,670
(Off·budget) ................................................ .
+17,154
+53,956
+45,281
+53,562
'These figures are based on the Mid-Session Review of the FY 1995 Budget, released by the
Office of Management and Budget on July 14, 1994.
Note: Details may not add to totals due to rounding.
5
Table 4.
Receipts of the U.S. Government, June 1994 and Other Periods
[$ millions]
This Month
Classification
Gro~s
Receipts
IndiVidual Income taxes:
Withheld
Presidential Election Campaign Fund
Other
Current Fiscal Year to Date
I (Deduct)
Refunds I Receipts
Gross
Receipts
Prior Fiscal Year to
I (Deduct)
Refunds I
.
Receipts
348,678
62
127,428
37.724
9
21,985
Gross
Receipts
Da"
I (Deduct)
Refunds I
R8CeIpta
325,299
25
122,505
.........................
59,719
1,596
58,123
476,168
71,936
404,232
447,829
70,725
3n,lIM
Corporation income taxes ....................................
29,812
697
29,114
116,623
10,416
106,207
99,369
10,996
88,372
26,425
2,577
26,425
2,577
)
)
(*0)
(*0)
214,450
14,357
-45
214,450
14,357
-45
200,829
11.345
-12
29,002
29,002
228,763
228,763
212,162
212,162
2,830
278
2.830
278
22.973
1.536
22.973
1.536
21.528
1.217
21.528
1,217
(
(
)
-1
-1
Total-Individual income taxes
Social insurance taxes and contributions:
Employment taxes and contributions:
Federal old-age and survivors ins. trust fund:
Federal Insurance Contributions Act taxes
Self-Employment Contributions Act taxes
Deposits by States
. . . . . . . . . ..
Other
Total-FOASI trust fund
Federal disability insurance trust fund:
Federal Insurance Contributions Act taxes
Self-Employment Contributions Act taxes
Receipts from railroad retirement account
Deposits by States
Other
Total-FDI trust fund
Federal hospital insurance trust fund:
Federal Insurance Contributions Act taxes
Self-Employment Contributions Act taxes
Receipts from Railroad Retirement Board
Deposits by States
Total-FHI trust fund
Railroad retirement accounts:
Rail industry pension fund
Railroad Social Security equivalent benefit
Total-Employment taxes and contributions
Unemployment insurance:
State taxes deposited in Treasury
Federal Unemployment Tax Act taxes
Railroad unemployment taxes ...
Railroad debt repayment
Total-Unemployment insurance
....
(
(
(
..
..
)
(
..
..
)
(
..
)
200,829
11,345
-12
)
(")
3.108
3.108
24.509
24.509
22.744
22.744
7,467
958
394
7,467
958
394
61.748
4.869
394
61.748
4.869
394
(
(
(
(
)
56,740
3.707
381
-3
56.740
3,707
381
8.819
8.819
67.011
67.011
60.826
60.826
165
-241
1.726
974
29
1.696
974
1.737
968
10
1,728
968
)
40.853
322.982
29
322,953
298,438
10
298,428
11
243
48
..
80
16,981
4,345
21
32
15,132
4,449
57
77
91
)
16,981
4,425
21
32
15,132
4,358
57
77
290
21,459
80
21,379
19,715
91
19,624
..
.. )
165
-241
40.853
243
59
..
(
(*0)
..
(
)
301
(
11
)
..
..
)
-3
Other retirement contributions:
Federal employees retirement - employee
contributions
Contributions for non-federal employees
355
11
355
11
3,359
76
3,359
76
3,466
72
3,466
72
Total-Other retirement contributions
366
366
3,434
3,434
3,538
3,538
Total-Social insurance taxes and
contributions ........................................
Excise taxes:
Miscellaneous excise taxes'
Airport and airway trust fund
Highway tnust fund ..
Black lung disability trust fund
............. ..... , ..........
. . . .. . . , .. . . . . ...
...........
..
41,521
11
41,509
347,876
109
347,767
321,691
101
321,590
2,707
482
1,563
55
211
2,496
482
1,563
55
23,339
3,760
13,032
463
699
24
327
22,640
3,737
12,704
463
20,103
1,958
13,339
474
531
10
170
19,572
1,948
13,169
474
211
4,596
40,594
1,050
39,544
35,875
711
35,164
9,433
.....................................
4,806
Estate and gift taxes .........................................
1,088
20
1,068
11,941
270
11,671
9,678
245
...............................................
1,799
88
1,711
15,118
639
14,479
14,145
578
13,587
1,788
216
1,788
215
12,612
2,629
15
12,612
2,614
10,817
2,462
155
10,817
2,3OB
2,003
15,241
15
15,226
13,279
155
13,12~
Total-Excise taxes
Customs duties
Miscellaneous Receipts:
DepoSits of earnings by Federal Reserve banks
All other
Total -
Miscellaneous receipts ........................
2,004
Total -
........................................
On-budget ......................................
Off-budget ......................................
140,749
2,625
138,124 1,023,561
84,435
939,126
941,866
83,511
858,355
108,639
2,625
106,014
770,289
84,435
685,854
706,959
83,511
&23,441
32,110
253,272
253,272
234,907
Total Total -
Receipts
32,110
'Indudes amounts for the Windfall profits tax pursuant to P L. 96-223.
No Transactions.
(. 'J Less than $500,000.
Note: Details may not add to totals due to rounding.
6
234,901
-
Table 5. Outlays of the U.S. Government, June 1994 and Other Periods
[$ millions]
Classification
Legislative Branch:
Senate ...................................................... .
House of Representatives .................................. .
Joint items .................................................. .
Congressional Budget Office .............................. ..
Architect of the Capitol .................................... ..
Ubrary of Congress ......................................... .
Government Printing Office:
Revolving fund (net) ...................................... .
General fund appropriations .............................. .
General Accounting Office ................................. ..
United States Tax Court ................................. ..
Other Legislative Branch agencies ........................ ..
Proprietary receipts from the public ........................ .
Intrabudgetary transactions ........................... .
Total-Legislative Branch ...........•......•.....••......
The Judiciary:
Supreme Court of the United States ..................... ..
Courts of Appeals, District Courts, and other judicial
services ................................................... ..
Other ........................................................ .
Total-The Judiciary ................................... ..
Executive Office of the President:
Compensation of the President and the White House
Office ..................................................... ..
Office of Management and Budget ........................ .
Other ....................................................... ..
Total-Executive Office of the President
Funds Appropriated to the President:
International Security Assistance:
Guaranty reserve fund ... .. .. .. .. .... .. ................ ..
Foreign military financing grants ........................ ..
Economic support fund ................................... .
Military assistance ........................................ .
Peacekeeping Operations ................................. .
Other ...................................................... .
Proprietary receipts from the public ..................... .
Total-International Security Assistance ............... .
This Month
Current Fiscal Year to Date
Gross /APPlicable/ 0 tl
Outlays
Receipts
u ays
Gross IAPPlicable /
Outlays Receipts
Outlays
39
63
39
62
7
7
2
2
14
26
13
26
320
566
58
16
147
396
1
1
32
9
9
72
31
31
2
3
2
320
23
23
..
(
2
)
3
-2
1
14
6
4
Prior Fiscal Year to Date
/ApPIi~ble/
Receipts
Gross
Outlays
Outla s
y
319
552
58
16
140
396
341
1
340
580
58
16
166
8
572
7
58
16
158
244
244
32
72
320
23
23
-4
-8
-31
80
329
24
25
-31
80
329
24
25
-5
-8
1,942
1,822
19
18
1,771
1,781
68
(" .)
84
1,781
68
1,874
1,867
(* *)
1,867
5
(* *)
-8
191
1,967
2
19
150
1,773
84
2
7
159
1,876
2
29
29
29
29
42
85
42
85
41
77
41
8
3
4
8
14
14
156
156
147
147
5
594
3,816
2,623
-4
466
219
3,523
2,468
15
57
22
-466
929
5,838
7,071
195
4
2
150
(" .)
7
159
(* *)
3
4
1
1
681
3,523
2,468
15
15
15
57
2
2
22
81
161
134
76
161
134
60
394
136
-60
25
462
-8
22
1,800
18
77
437
137
3,816
2,623
-4
21
22
-437
893
6,178
456
21
22
258
6,767
637
128
327
562
222
356
562
222
356
International Development Assistance:
Multilateral Assistance:
Contribution to the International Development
Association ........................................... ..
International organizations and programs ............. .
Other ................................................... ..
1
1
21
21
637
128
327
Total-Multilateral Assistance ....................... .
23
23
1,092
1,092
1,140
1,140
100
58
37
100
58
1,025
488
384
1,025
488
384
993
500
353
993
500
353
Agency for International Development:
Functional development assistance program .......... .
Sub-Saharan Africa development assistance .......... .
Operating expenses ................................... ..
Payment to the Foreign Service retirement and
disability fund ......................................... ..
Other .................................................... .
Proprietary receipts from the public ................... .
Intrabudgetary transactions ........................... ..
37
44
44
58
4
71
54
-71
554
46
572
508
-572
-2
490
618
1,875
2.336
149
-110
64
141
630
453
-630
666
1,669
56
153
65
8
-97
57
3.070
3.737
826
2,911
-236
463
234
-97
9,997
194
9.757
9,599
-9,599
-2
...... .
252
75
178
2,493
Peace Corps .............................................. .
Overseas Private Investment Corporation ............... .
Other ..................................................... ..
13
30
16
149
58
6
(* *)
13
14
6
67
167
3
Total-International Development Assistance ......... .
324
91
233
3,859
788
International Monetary Programs ........................... .
Military Sales Programs:
Special defense acquisition fund ........................ ..
Foreign military sales trust fund ........................ ..
Kuwait civil reconstruction trust fund .................... .
Proprietary receipts from the public ............... .
Other ........................................................ .
-248
-248
-236
53
1,175
-34
1,175
137
9,997
(* *)
(* *)
1,199
-1,199
Total-Funds Appropriated to the President ••.........
1,666
Total-Agency for International Development
19
(* *)
2
1,480
7
2
51
186
20,575
11,550
r *)
7
51
8
9,025
21,238
37
141
463
173
21
9,757
(* *)
7
9,311
-9,311
8
11,204
10,034
Table 5. Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
Classification
This Month
Current Fiscal Year to Date
Gross !APPlic.able[ Outlays
Outlays
Receipts
Gross !APPlicable! OuUa
OuUays
Receipts
ys
Department of Agriculture:
Agricultural Research Service ..
Cooperative State Research Service
Extension Service
Animal and Plant Health Inspection Service
Food Safety and Inspection Service
Agncultural Marketing Service
Soil Conservation Service:
Watershed and flood prevention operations
Conservation operations
Other
Agricultural Stabilization and Conservation Service:
Conservation programs
Other
Farmers Home Administration:
Credit accounts:
Agricultural credit insurance fund
Rural housing insurance fund ...
Other., '
.....................
Salaries and expenses ........... , ....... , ...
Other
Prior Fiscal Year to Dtt.
Gross
OuUays
IAppllcabiel
Receipts
Oua."
56
43
42
40
37
16
56
43
42
40
37
16
523
343
326
355
380
511
523
343
326
355
380
510
551
326
299
367
376
601
367
376
600
20
44
7
20
44
7
195
448
61
195
448
61
164
436
60
164
436
60
36
131
36
131
1.881
600
1.881
600
1.808
565
1.808
565
104
272
136
148
1.616
3.189
118
728
1.645
2,414
..
)
51
9
-203
79
-203
78
1.706
2,798
9
482
68
2
61
384
9
482
66
376
343
4.681
720
5,063
4.062
1,001
223
814
814
375
60
30
2
-87
28
739
227
13
2.234
1.460
304
227
13
-1,000
1.110
784
170
22
2,318
531
-201
4
15.812
204
10.303
204
22,198
175
240
419
51
9
Total-Farmers Home Administration, ...........
719
Foreign assistance programs ..............
Rural Development Administration:
Rural development insurance fund ..................
Rural water and waste disposal grants .......
Other ....................... , ..................
Rural Electrification Administration '"
Federal Crop Insurance Corporation
Commodity Credit Corporation:
...........
Price support and related programs
National Wool Act Program ...........
. ..........
223
109
30
2
430
30
381
4
(
50
517
2
582
r ')
1.498
2.461
..
)
(
3,961
435
3,233
350
5,509
551
326
299
r ')
375
369
3,249
325
5,602
415
170
22
-931
206
16.596
175
Food and Nutrition Service:
. ..............
Food stamp program .. - .....
State child nutrition programs
..............
Women. infants and children programs ",","""""'"
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.009
742
274
32
2,009
742
274
32
19,133
5.823
2,442
398
19,133
5,823
2,442
398
18.460
5,554
2,236
491
18,460
5,554
2,236
491
Total-Food and Nutrition Service .................
3.057
3,057
27,796
27,796
26,741
26,741
113
28
21
83
113
28
21
83
1.182
239
281
484
1,182
239
281
484
1,242
267
236
507
1,242
267
236
507
. . . . . ... . . . . . . . . ..
246
246
2.186
2,186
2,252
2,252
Other
. . . .. . ... . . . . . . . . . .
Proprietary receipts from the public """""'"''''''''''''
Intrabudgetary transactions ..................................
43
40
-52
479
452
-1.093
476
.......................
5,745
1,581
4,164
62,271
14,610
47,661
Department of Commerce:
Economic Development Administration ......................
Bureau of the Census "
.................................
Promotion of Industry and Commerce ..............
23
16
34
3
20
16
34
204
197
240
13
128
-4
16
7
2
126
-4
16
5
1,413
32
96
66
11
Forest Service:
National forest system . . . . . . . . . . . . . . . . . . . ................
Forest and rangeland protection . . . . . . . . . . . ..............
Forest service permanent appropriations
Other ....
. .. . . .. . . .. . . . . . ..
Total-Forest Service
................
Total-Department of Agriculture
Science and Technology:
National Oceanic and Atmospheric Administration
Patent and Trademark Office ....................
National Institute of Standards and Technology
Other
Total-Science and Technology
'"
.......................
27
1,093
29
807
448
-807
-150
66,508
14,443
52,085
192
197
240
105
260
229
15
90
260
1,401
32
96
41
1,217
41
164
57
19
-150
3
147
Other
.............
Propnetary receipts from the public
............
Intrabudgetary transactions
.............
Offsetting governmental receipts
.................
Total-Department of Commerce
3
52
5
143
1,608
-1
-10
69
10
-1
..)
(
..)
(
..
(
25
37
1.571
1.479
69
-90
76
90
..
(
)
)
229
29
28
48
1,431
87
-87
;
(")
(")
76
(' OJ
('
219
18
8
201
2,318
139
2,179
2,148
1,197
41
164
149
-
1,_
Table 5. Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
This Month
Current Fiscal Year to Date
1
Classification
Gross !APPlicable
Outlays
Receipts
Outlays
Gross !APPlicable!
Outlays
Receipts
Outlays
Prior Fiscal Year to Date
I
Gross jApplicable
Outlays
Receipts
a
0utI ys
Department of Defense-Military:
Military personnel:
Department of the Army ..................................
Department of the Navy . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .
Department of the Air Force ..............................
2,325
2,229
1,522
2,325
2,229
1,522
19,817
19,514
13,351
19,817
19,514
13,351
21,050
20,396
15,400
21,050
20,396
15,400
................................
6,076
6,076
52,681
52,681
56.846
56.846
Operation and maintenance:
Department of the Army ..................................
Department of the Navy ..................................
Department of the Air Force ..............................
Defense agencies ..........................................
1,746
2,559
2,076
1,509
1,746
2,559
2,076
1,509
15,483
16,723
18.061
14,474
15,483
16,723
18,061
14,474
17,960
19,600
18.505
14,230
17,960
19,600
18,505
14,230
...................
7,890
7,890
64,741
64,741
70,296
70,296
Procurement:
Department of the Army ..................................
Department of the Navy ..................................
Department of the Air Force ..............................
Defense agencies ..........................................
693
2,280
2,092
396
693
2,280
2,092
396
6,152
19,542
17,680
3,137
6,152
19,542
17,680
3,137
8,827
23,223
19,251
2,740
8,827
23,223
19,251
2,740
.....................................
5,461
5,461
46,512
46,512
54,040
54,040
Research, development, test, and evaluation:
Department of the Army ..................................
Department of the Navy ..................................
Department of the Air Force . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .
Defense agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
443
789
1,167
760
443
789
1,167
760
4,263
5,808
9,631
6,270
4,263
5,808
9,631
6,270
4,650
7,036
9,584
7,011
4,650
7,036
9,584
7,011
Total-Research, development, test and evaluation
3,159
3,159
25,972
25,972
28,282
28,282
Military construction:
Department of the Army ..................................
Department of the Navy ............................ , .. , ..
Department of the Air Force ..............................
Defense agencies .................... , .....................
47
62
109
246
47
62
109
246
651
416
798
1,567
651
416
798
1,567
769
675
870
1,174
769
675
870
1,174
.............................
465
465
3,432
3,432
3,488
3,488
102
64
118
13
102
64
118
10
947
588
807
82
947
588
807
57
1,007
643
682
62
1,007
643
682
48
99
27
99
27
154
271
154
271
110
-58
-66
-22
-66
-23
2,479
-261
2,479
-266
-4,576
-152
3
-4,576
-155
(* *)
(* *)
(")
(* *)
(* *J
(* 'J
(")
5
4
16
(* *)
(* *)
-13
37
24
65
13
20
-13
27
6
136
23
4
65
304
197
247
7
-304
-197
-247
-7
Total-Military personnel
Total-Operation and maintenance
Total-Procurement
Total-Military construction
Family housing:
Department of the Army ..................................
Department of the Navy ........... , ..................
Department of the Air Force ..............................
Defense agencies ..........................................
Revolving and management funds:
Department of the Army ..................................
Department of the Navy ..................................
Department of the Air Force ..............................
Defense agencies:
Defense business operations fund .....................
Other .....................................................
Trust funds:
Department of the Army ..................................
Department of the Navy ..................................
Department of the Air Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Defense agencies ..........................................
Proprietary receipts from the public:
Department of the Army ..................................
Department of the Navy ..................................
Department of the Air Force ..............................
Defense agencies ..........................................
Intrabudgetary transactions:
Department of the Army ..................................
Department of the Navy ..................................
Department of the Air Force ..............................
Defense agencies ..........................................
Offsetting governmental receipts:
Department of the Army ..................................
Defense agencies ..........................................
Total-Department of Defense-Military
..............
3
40
58
26
12
-40
-58
-26
-12
35
-43
35
-43
(* *)
(. *)
-36
-36
23,335
140
9
23,195
25
5
11
6
136
88
124
354
219
155
484
120
-92
199,242
(")
-88
-124
-354
-219
155
484
120
-92
6
--6
(* *)
(")
839
198,403
14
110
-58
89
492
104
-1,014
210,468
89
492
104
-1,014
21
27
-21
-27
854
209,615
Table 5. Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
This Month
Classification
Gross
Outlays
Department 01 Defense-Civil
Corps of EngIneers:
ConstructIon, general
OperatIon and maintenance, general
Other
Proprietary receipts from the public
304
MIlitary retirement:
Payment to military retirement fund
RetIred pay
MIlitary retirement fund
Intrabudgetary transactions
Education benefits
Other
Propnetary receipts from the public
Outla s
y
Gross IAppliC8ble\ Outl
Outlays
Receipts
ays
665
794
1,175
16
76
101
127
-16
16
288
2,634
76
101
127
Total-Corps of Engineers
Total-Department of Defense-Civil
IAPPli~blel
Receipts
Current Fiscal Year to Dete
Prior Fiscal Year to
Gross \Applicable\
Outlays
Receipts Ouae"
727
1,051
906
127
665
794
1,175
-127
127
2,508
2,684
11,908
12,273
11,908
140
727
1,051
906
-140
140
2,54,4
12,273
(' 'J
...................
Department of Education:
Office of Elementary and Secondary Education:
Compensatory education for the disadvantaged
Impact aid
School improvement programs
Indian education
Other
Total-Office of Elementary and Secondary
Education
·. .. . . . ... . . . ... . . . .... .
2,248
2,248
4
4
4
4
-1
3
8
19,932
-11,908
131
53
-8
19,226
-12,273
131
51
139
22,615
22,092
n
3
7
19.226
-12,273
131
48
-7
150
21,942
2,542
22,754
599
23
139
8
1
599
23
139
8
5,459
725
1,158
60
8
5,459
725
1,158
60
8
5,268
756
1,259
61
12
5,268
756
1,259
61
12
770
770
7,409
7,409
7,356
7,356
2,560
18
19,932
-11,908
131
57
0..
Office of Bitingual Education and Minority Languages
Affairs
· . . . . . . . . . . . ..............
Office of Special Education and Rehabititative Services:
. . . . . . . .. . . . . . ...
Special education
Rehabilitation services and disability research "
Special institutions for persons with disabilities
Office of Vocational and Adult Education
20
20
169
169
158
158
352
190
6
141
352
190
6
141
2,423
1,714
96
1,087
2,423
1,714
96
1,087
2,048
1,557
97
1,263
2,048
1,557
97
1,263
Office of Postsecondary Education:
...........
College housing loans
Student financial assistance .............
Federal family education loans ........
. . . . . . . . . . . . . . .. . . . . . .
Higher education
Howard University
.............
.............
Other
-1
276
227
64
13
10
1
5,482
-2,149
549
156
72
39
-38
5,482
-2,149
549
156
72
12
5,782
3,480
539
151
13
53
276
227
64
13
10
-40
5,782
3,480
539
151
13
591
590
4,111
39
4,072
9,978
53
9,925
36
43
323
286
120
323
286
-120
277
260
4
36
43
-4
49
2n
260
-49
5
2,144
17,619
159
17,460
22,994
102
22,892
Total-Office of Postsecondary Education
Office of Educational Research and Improvement .........
Departmental management
. .. . . . . .. . . . . . . . . ... .. . . . , ....
Proprietary receipts from the public '''''''''''''''''''''""
........
2,149
Department of Energy:
Atomic energy defense activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
932
932
8,822
8,822
8,129
8,129
209
269
19
38
54
17
209
269
19
38
54
17
1,062
2,284
264
308
425
213
1,062
2,284
264
308
425
213
1,049
2,134
851
305
380
335
1,049
2,134
851
305
380
335
Total-Department of Education
.............
~
~
~
Energy programs:
General science and research activities . . . . . . . . . . . . . . . . . .
Energy supply, Rand D activities .. .............
Uranium supply and enrichment activities ................
Fossil energy research and development .................
Energy conservation
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .
Strategic petroleum reserve ...............................
Clean coal technology
.. . . . . . . . . . . . .... . ... . .
Nuclear waste disposal fund · . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other
..................................
Total-Energy programs
Power Marketing Administration
Departmental administration
Proprietary receipts from the public
Intra budgetary transactions
...........
Offsetting governmental receipts
..............
34
77
("J
34
77
209
664
2
209
663
188
112
2
188
110
718
("J
718
5,429
2
5,427
5,354
2
5,352
119
28
114
4
28
-121
7
-1
1,294
328
1 ,262
1,673
323
1,092
1,746
581
323
-1.746
109
32
328
-1,269
-266
-109
23
-23
1,568
15,607
2,641
12,965
15,257
2,863
12,395
................
121
.............
..............
7
Total-Department 01 Energy ....... , ............•.......
1,805
.
237
10
1,269
-266
-223
-223
Table 5. Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
Classification
This Month
Current Fiscal Year to Date
Prior Fiscal Year to Date
Gross !APPlicable! Outlays
Outlays Receipts
Gross !APPlicable!
Outlays Receipts OuUays
Gross !APPlicable! Outl
OuUays Receipts
ays
Department of Health and Human Services, except Social
Security:
Public Health Service:
Food and Drug Administration ........................... .
Health Resources and Services Administration .......... .
Indian Health Services .................................... .
Centers for Disease Control and Prevention ............ .
National Institutes of Health .............................. .
Substance Abuse and Mental Health Services
Administration ............................................ .
Agency for Health Care Policy and Research ........... .
Assistant secretary for health ............................ .
66
66
299
147
139
925
299
147
139
925
574
1,838
1,296
1,109
7,734
268
20
56
268
20
56
1,815
84
190
1,919
14,640
7,456
3,574
7,456
3,574
Federal hospital insurance trust fund:
Benefit payments ....................................... .
Administrative expenses ................................ .
Interest on normalized tax transfers .................. .
9,293
81
Total-FHI trust fund ................................ .
(* *)
1,786
1,234
948
7,246
551
1,786
1,234
948
7,246
190
2,045
44
157
2,045
44
157
14,637
14,015
61,539
30,996
61.539
30,996
55,837
33,607
55.837
33,607
9,293
81
75,246
907
75.246
907
67,195
892
67.195
892
9,374
9,374
76,152
76,152
68.087
68.087
Federal supplementary medical insurance trust fund:
Benefit payments ....................................... .
Administrative expenses ................................ .
5,273
143
5,273
143
42,319
1,262
42,319
1.262
38,656
1,078
38,656
1,078
Total-FSMI trust fund .............................. .
5,416
5,416
43,581
43,581
39.734
39.734
Other ...................................................... .
-9
-9
8
8
94
94
Total-Health Care Financing Administration .......... .
25.811
25,811
212,277
212,277
197,359
197,359
Payments to Social Security trust funds ................ .
Special benefits for disabled coal miners ............... .
Supplemental security income program .................. .
7
63
1,945
7
63
1,945
4,152
4,152
584
584
18,082
18,082
4.630
606
16.814
4.630
606
16.814
Total-Social Security Administration .................. .
2,015
2,015
22,818
22,818
22,050
22.050
1,099
100
27
47
74
11
96
224
312
1,099
100
27
47
74
11
96
224
312
12,393
1,935
280
342
612
626
613
2.073
2,927
12.393
1,935
280
342
612
626
613
2,073
2,927
11,747
995
271
306
552
114
279
2,144
2.665
11,747
995
271
306
552
114
279
2,144
2.665
217
217
2,281
2.281
1,971
1.971
(* *)
(* *)
(* *)
(* *)
(* *)
(* *)
Total-Administration for children and families ....... .
2,208
2,208
24,082
24,082
21.045
21.045
Administration on aging ..................................... .
Office of the Secretary ..................................... .
Proprietary receipts from the public ........................ .
Intrabudgetary transactions:
Payments for health insurance for the aged:
Federal hospital insurance trust fund ................. .
Federal supplementary medical insurance trust fund ..
Payments for tax and other credits:
Federal hospital insurance trust fund ................. .
Other .................................................... .
93
93
55
-1,616
642
185
642
185
-13.711
401
132
401
132
-11.814
-3.028
-3.028
-29,296
-29.296
-33.126
-33,126
-546
-546
-1,700
-1,700
-481
-481
26,911
243,647
229,933
221,395
Total-Public Health Service ................. .
Health Care Financing Administration:
Grants to States for Medicaid ........................... .
Payments to health care trust funds .......... .
1,920
(* *)
3
571
1,838
1,296
1,109
7,734
1,815
84
3
554
3
3
14,012
Social Security Administration:
Administration for children and families:
Family support payments to States ..................... .
Low income home energy assistance ................... .
Refugee and entrant assistance ......................... .
Community Services Block Grant ........................ .
Payments to States for afdc work programs ........... .
Interim assistance to States for legalization ............. .
Payments to States for child care assistance .......... .
Social services block grant ............................... .
Children and families services programs ................ .
Payments to States for foster care and adoption
assistance ................................................ .
Other ...................................................... .
Total-Department of Health and Human Services,
except Social Security •...... ,,", ••......••••••...•••
55
1,616
28,527
1,617
11
13,711
13,714
11.814
11,817
209,578
Table 5.
Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
Classification
Department of Health and Human Services, SOCial
Security (off-budget):
Federal old-age and survivors insurance trust fund:
Benefit payments
Administrative expenses and construction
Payment to railroad retirement account
Interest expense on interfund borrowings
Interest on normalized tax transfers
Total-FOASI trust fund
Federal disability insurance trust fund:
Benefit payments
Administrative expenses and construction
Payment to railroad retirement account
Interest on normalized tax transfers
Total-FDI trust fund
Proprietary receipts from the public .
Intrabudgetary transactions 1
Total-Department of Health and Human Services,
Social Security(oH-budget) ..............................
Department of Housing and Urban Development:
Housing programs:
PubliC enterprise funds
Credit accounts:
Federal housing administration fund
Housing for the elderly or handicapped fund
Other ...
Rent supplement payments
Homeownership aSSistance
Rental housing assistance ....
Rental housing development grants
Low-rent public housing
Public housing grants ...
College housing grants
Lower income housing assistance
Section 8 contract renewals
........ . .....
Other
Total-Housing programs
Public and Indian Housing programs:
Low-rent public housing-Loans and other expenses
Payments for operation of low-income housing
...............
projects
Community Partnerships Against Crime
Other
This Month
Current Fiscal Year to Date
Prior Fiscal Year to Olte
Gross !APPlicable! Outlays
Outlays
Receipts
Gross !APPlicable! 0 tl
Outlays
Receipts
u ays
Gross jAPPlicablel
Outlays
Receipts 0utI1Y'
23.192
154
3,420
23.192
154
3,420
206.459
1,209
3,420
206,459
1,209
3,420
197,583
1,385
3,353
197,583
1,385
3,353
26,765
26,765
211.087
211,087
202,321
202,321
3,144
73
106
3,144
73
106
27,312
735
106
27,312
735
106
24,895
659
83
24,895
659
3,323
3,323
28,152
28,152
25,637
-7
-1
-7
-4,147
30,081
30,081
235,092
83
..
(
25,637
)
-10
-4,147
-4,643
10
235,082
223,315
(* .)
10
("')
-4,643
15
10
5
116
97
19
59
52
561
-6
40
9
10
55
675
58
-113
-65
40
9
10
55
4,836
527
-391
162
333
57
80
494
5
592
2,448
14
7.888
2,533
49
4,564
785
231
42
68
497
13
610
1,845
15
8.138
1.801
16
3,959
487
223,315
(* .)
(
47
292
2
908
248
7
47
292
2
908
248
7
4,446
690
333
57
80
494
5
592
2,448
14
7,888
2.533
49
742
1,445
19,743
5,461
14,282
18,685
4,498
14,186
4
-3
294
199
95
155
32
123
221
16
1,919
123
1,919
123
1.790
79
199
2,137
2.024
32
1,992
2.188
221
16
..
)
..
(
)
(".)
604
299
230
42
68
497
13
610
1,845
15
8.138
1,801
16
1,790
79
238
4
234
2,336
Government National Mortgage Association:
Management and liquidating functions fund
Guarantees of mortgage-backed securities ... ............
63
91
-27
760
1.119
-1
-359
855
2
1.186
-2
-331
Total-Government National Mortgage Association
63
91
-27
760
1.120
-360
855
1,188
-333
358
89
22
9
358
89
13
2.619
527
214
95
2.619
527
119
2.347
117
225
83
2.347
117
142
469
9
461
3.360
95
3.265
2.688
83
2,605
364
30
364
30
-197
395
24
22
27
7
-22
Total-Public and Indian Housing programs
Community Planning and Development:
Community Development Grants ......
Home investment partnerships program
Other
Total-Community Planning and Development .......
Management and Administration
Other
Proprietary receipts from the public
Offsetting governmental receipts
Total-Department of Housing and Urban
Development .............................................
(•• J
27
7
2,993
868
12
2,125
197
5
26,593
7,078
6,030
18,641
225
-5
19,516
3
395
24
-225
-3
24,672
Table 5. Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
Classification
This Month
Current Fiscal Year to Date
Gross \APPlicable\ 0 tl
u ays
Outlays Receipts
Gross \Applicable \
Outlays Receipts Outlays
Prior Fiscal Year to Date
Gross
Outlays
I
Applicable \ Outl
Receipts
ays
Department of the Interior:
Land and minerals management:
Bureau of Land Management:
Management of lands and resources ................. .
Other .................................................... .
Minerals Management Service .. , ................. .
Office of Surface Mining Reclamation and
Enforcement ...................................... .
Total-Land and minerals management
Water and science:
Bureau of Reclamation:
Construction program .................................. .
Operation and maintenance ................. . ......... .
Other .................................................... .
Central utah project ...................................... .
Geological Survey ......................................... .
Bureau of Mines .......................................... .
56
56
22
54
22
54
493
176
493
176
567
567
474
474
177
177
513
513
32
32
225
225
219
219
165
165
1,461
1,461
1,383
1,383
36
21
58
36
21
53
226
198
211
357
106
198
211
250
(* *)
226
200
347
20
467
150
22
467
127
128
1,254
200
44
19
3
44
16
146
21
233
20
448
125
178
9
170
1,387
135
1,252
1,382
105
13
133
105
13
133
917
72
1,093
917
959
959
1,093
1,093
1,093
251
251
2,081
2,081
2,052
2,052
Bureau of Indian Affairs:
Operation of Indian programs .................... .
Indian tribal funds ........................................ .
Other ............................. .
134
21
29
134
21
28
1,020
211
349
1,020
211
7
342
997
114
267
15
997
114
252
Total-Bureau of Indian Affairs ....................... .
184
184
1,580
7
1,573
1,379
15
1,363
Territorial and intemational affairs .......................... .
Departmental offices ........................................ .
Proprietary receipts from the public ........................ .
Intrabudgetary transactions ................................. .
Offsetting govemmental receipts ........................... .
23
23
7
7
228
105
185
92
-149
-17
-218
228
105
-1,473
-218
Total-Water and science .......... .
Fish and wildlife and parks:
United States Fish and Wildlife Service ................. .
National Biological Survey ... . ........................... .
National Park Service .................... .
Total-Fish and wildlife and parks
Total-Department of the Interior
6
(* *)
149
-17
792
159
114
448
72
1,473
634
6,624
264
1,872
1,529
568
1,117
1,782
658
427
-27
r *)
1,615
1,486
-92
(* *)
5,009
6,381
1,872
2,149
1,476
585
1,127
1,617
702
694
-192
185
92
-1,486
-92
(* *)
(* *)
1,630
4,751
71
362
2,149
1,476
585
1,127
1,547
702
694
-192
-362
433
7,726
Department of Justice:
Legal activities .............................................. .
Federal Bureau of Investigation ............................ .
Drug Enforcement Administration ........................... .
Immigration and Naturalization Service ..................... .
Federal Prison System ...................................... .
Office of Justice Programs ................................. .
Other ........................................................ .
Intrabudgetary transactions ................................. .
Offsetting govemmental receipts ........................... .
264
98
52
127
203
79
26
-4
Total-Department of Justice ..........•....••..........
845
1,529
568
46
98
52
127
193
79
26
-4
-46
55
790
7,926
411
36
22
411
36
2,964
2,964
22
292
117
292
117
62
62
207
207
14
7,515
14
7,515
2,547
2,547
1,566
1,566
10
1,117
88
1,694
658
427
-27
404
-404
492
7,435
8,159
2,917
292
114
2,917
292
114
Department of Labor:
Employment and Training Administration:
Training and employment services ....... . .............. .
Community Service Employment for Older Americans .. .
Federal unemployment benefits and allowances ........ .
State unemployment insurance and employment service
operations ................................................ .
Payments to the unemployment trust fund ............. .
Advances to the unemployment trust fund and other
funds ..................................................... .
13
Table 5.
Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions)
This Month
Classification
Current Ascal Year to Date
Gross !APPlicable! 0 U
OuUays
Receipts
u ays
Department of Labor:-Continued
Unemployment trust fund'
Federal-State unemployment Insurance:
State unemployment benefits
State administrative expenses
Federal administrative expenses
Veterans employment and training
Repayment of advances from the general fund
Railroad unemployment insurance
Other
Gross
OuUays
IApplicable I
Receipts
OuUays
Prior Fiscal Year to Oat.
Gross
OuUays
jApplicabiel
Receipts
DutIl"
1,825
210
10
14
1,825
210
10
14
21,837
2,300
142
139
21,837
2,300
142
139
27,677
2,532
83
129
27,m
2,532
4
2
4
2
52
15
52
15
58
15
58
2,064
2,064
24,485
24,485
30,493
30,493
8
8
67
67
56
56
Total-Employment and Training Administration
2,603
2,603
30,679
30,679
42,968
42,968
Pension Benefit Guaranty Corporation
Employment Standards Administration:
Salaries and expenses
...............
Special benefits
.............
Black lung disability trust fund
Other
Occupational Safety and Health Administration
Bureau of labor Statistics
Other
Proprietary receipts from the public
Intrabudgetary transactions
72
8
916
-273
617
18
149
49
14
25
29
43
172
182
451
97
219
205
357
172
182
451
97
219
205
357
-2
-3,121
168
246
459
94
210
213
335
-9,853
28,966
35,458
Total-Unemployment trust fund
Other
64
18
149
49
14
25
29
43
(' 'J
2
15
1,405
-787
168
246
459
94
210
213
335
2
-2
-145
-3,121
2,793
30,156
164
35
164
35
1,372
422
1,372
422
1,585
346
1,585
346
37
10
37
10
125
301
84
125
301
84
119
312
75
119
312
75
245
245
2,305
2,305
2,437
2,437
1
83
7
2
1
83
7
2
1,183
558
86
46
1,183
558
86
46
1,236
519
108
52
1,236
519
108
52
("J
("J
-176
-176
-167
338
338
4,002
4,002
4,185
1,755
-1
24
1.755
-1
24
12.847
84
185
12.847
84
185
10.907
107
174
10,907
107
174
1.778
1.778
13,117
13.117
11,188
11,188
National Highway Traffic Safety Administration
21
21
191
191
178
178
Federal Railroad Administration:
Grants to National Railroad Passenger Corporation
...............
Other
35
2
34
425
280
10
425
270
345
276
12
264
35
2
34
705
10
696
621
12
609
Total-Department of Labor
-145
(' 'J
1,188
83
129
.............................
Department of State:
Administration of Foreign Affairs:
Salaries and expenses
Acquisition and maintenance of buildings abroad
Payment to Foreign Service retirement and disability
fund
Foreign Service retirement and disability fund ..
Other
'
Total-Administration of Foreign Affairs
............
Intemational organizations and Conferences
Migration and refugee assistance
Intemational narcotiCS control
............
Other
..............
Proprietary receipts from the public ......
Intrabudgetary transactions
...........
Offsetting govemmental receipts
Total-Department of State ......................... " ...
Department of Transportation:
Federal Highway Administration:
Highway trust fund:
Federal-aid highways
Other.
...............
..............
Other programs
Total-Federal Highway Administration ....
Total-Federal Railroad Administration ...
2,857
64
1,191
-9,853
1,406
(' 'J
14
34,052
("J
-167
(* *)
4,185
345
Table 5. Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
Classification
Department of Transportation:-Continued
Federal Transit Administration:
Formula grants ..................................... .
Discretionary grants ...................................... .
Other ...................................................... .
Total-Federal Transit Administration
Federal Aviation Administration:
Operations ........................................ .
Airport and airway trust fund:
Grants-in-aid for airports ............................... .
Facilities and equipment .............................. .
Research, engineering and development .............. .
Operations .............................................. .
Total-Airport and airway trust fund
This Month
Current Fiscal Year to Date
Prior Fiscal Year to Date
Gross \APPlicable\ 0 tl
Outlays Receipts
u ays
Gross IAPPlicablel
Outlays Receipts
Outlays
Gross \APPlicable \ OuU
Outlays Receipts
ays
159
120
38
159
120
38
96
1,196
2,061
96
1,196
2,061
1,406
944
278
1,406
944
278
316
316
3,353
3,353
2,628
2,628
230
230
1,914
1,914
1,638
1,638
110
155
15
191
110
155
15
191
1,136
1,628
156
1,625
1,136
1,628
156
1,625
1,381
1,505
142
1,709
1,381
1,505
142
1,709
472
472
4,546
4,546
4,737
4,737
Other ..................................... .
(")
r .)
(")
(oo)
-1
(oo)
2
-1
Total-Federal Aviation Administration
701
(")
701
6,460
6,459
6,375
2
6,374
218
28
39
31
(")
218
28
39
31
1,821
248
373
260
4
1,821
248
373
256
1,870
204
373
206
4
1,870
204
373
202
316
(oo)
316
2,701
4
2,697
2,653
4
2,649
58
27
31
1
-6
-5
642
258
274
5
7
368
253
1,021
276
438
-5
583
267
Coast Guard:
Operating expenses .............................. .
Acquisition, construction, and improvements .... .
Retired pay ............................................... .
Other ..................................................... .
Total-Coast Guard .................... ".,""',.,"'"
Maritime Administration .""", .. " " " " ... ".'.,, .. ,,
Other """",,. "".," """".,'." """".,.,","',.,,,.
Proprietary receipts from the public .""."".".,,"""
Intrabudgetary transactions """"""'" """"""."".
Offsetting governmental receipts """""".",,"""'"''
5
-7
10
10
9
9
-9
-3
58
-58
-3
5
-5
27,438
306
27,132
24,938
532
24,406
-290
15
-1,054
131
9
-1,063
131
-1,026
150
9
-1,036
150
7
7
63
63
167
1,751
407
167
1,751
407
2
2
21
21
116
116
164
1,751
403
20
111
164
1,751
403
20
111
Total-Financial Management Service ................ ,'
90
90
2,444
2,444
2,450
2,450
Federal Financing Bank ."""""",,,,,,,,,.,,,,,, .. ""'"
Bureau of Alcohol, Tobacco and Firearms:
Salaries and expenses "." " " " . " " . " " " . " " " " " "
Internal revenue collections for Puerto Rico ., ........... .
United States Customs Service """"""""."""."".
Bureau of Engraving and Printing .".""""""",,""'"
United States Mint , .. " " " ... """""',."".,,.,.,"'.,,.
Bureau of the Public Debt """"".""",,,,,,,,,.,,"'"
553
553
337
337
337
337
25
17
131
-14
63
38
25
17
131
-14
63
38
282
148
1,421
282
148
1,421
273
145
1,318
273
145
1,318
-9
-9
21
220
21
220
-5
-5
-5
-5
228
228
119
264
149
119
264
149
1,241
2,791
912
1,241
2,791
912
1 ,191
2,825
887
1,191
2,825
887
10,768
428
1,922
112
8,637
632
1,496
115
(* 0)
8,637
632
1,496
115
18,175
15,782
(oo)
15,782
Total-Department of Transportation
Department of the Treasury:
Departmental offices:
Exchange stabilization fund ,.""".,.",,,,,,,,,,,,,,,,,,
Other """"."""""""".",,,,,,,.,,,.,,.,,,.,,,.,,,,
Financial Management Service:
Salaries and expenses "".,,"" . "" ".,,"""""""
Payment to the Resolution Funding Corporation ".,., .. .
Claims, judgements, and relief acts .. , .................. .
Net interest paid to loan guarantee financing accounts
Other ."""""""".,.""" .. ,,,,,,,.,,,,,,,,,,,,,,.,,,,
Internal Revenue Service:
Processing tax returns and assistance ,." ... , ........ '"
Tax law enforcement "".,"".",., .. ""',,",,.,""'"
Information systems """.".""".,.,'".,,,,.,,"'.""
Payment where earned income credit exceeds liability
for tax ".".,"".,'". " . , " .. " . , , , , " " . " .. , ' , , , , .. , ' ,
Health insurance supplernent to earned income credit .,
Refunding internal revenue collections, interest ...... , .. .
Other ."".""""""",,,,,.,,,,,,,,.,,,,.,,,,,,,,.,,,, ..
Total-Internal Revenue Service."" ........ ,', .. ".,"
(oo)
(")
35
3,187
-288
15
3,222
169
7
185
10
169
185
10
10,768
428
1,922
112
904
904
18,175
7
15
Table 5. Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
Classl~tlon
Depanment 01 the Treasury:-Continued
United States Secret Service
Comptroller of the Currency
Office 01 Thrift Supervison ...
Interest on the public debt:
PubliC issues (accrual basis)
Special issues (cash basis)
Total-Interest on the public debt
Other
Proprietary receipts from the public
Receipts from off-budget federal entities
Intrabudgetary transactions ........... .
Offsetting governmental receipts ..... .
Total-Depanment of the Treasury
Depanment 01 Veterans Affairs:
Veterans Health Administration:
Medical care ............. .
Other
............... .
Veterans Benefits Administration:
Public enterprise funds:
Guaranty and indemnity fund
loan guaranty revolving fund
Other
Compensation and pensions .................... .
Readjustment benefits ...
. ......... .
Post-Vietnam era veterans education account
Insurance funds:
National service life
United States government life
Veterans special life
Other .........
. ................ .
Total-Veterans Benefits Administration
Construction ..... .
Departmental administration
Proprietary receipts from the public:
National service life .............. .
United States government life ........ .
Other
........................ .
Intrabudgetary transactions ................................. .
Total-Department 01 Veterans Affairs
Environmental Protection Agency:
Program and research operations .......................... .
Abatement, control, and compliance ............... .
Water infrastructure financing
...................... .
Hazardous substance superfund .................... .
Other ................................................ .
Proprietary receipts from the public . . ........... .
Intrabudgetary transactions ......................... .
Offsetting governmental receipts ............ .. ........... ..
Total-Environmental Protection Agency
General Services Administration:
Real property activities ..................................... .
Personal property activities ............................... ..
Information Resources Management Service
Other
.................... .
Proprietary receipts from the publiC ........ .
Total-General Services Administration "."., ..... , .•.
This Month
Current Fiscal Vear to Date
Prior Fiscal Veer to DII..
Gross !APPlic.able! Outlays
Outlays
Receipts
Gross !APPlicable! 0 tl
Outlays
Receipts
u ays
Gross !APplicablel
Outlays
Receipts OutIiya
41
27
15
367
281
134
17,286
36,020
17,286
36,020
53,306
45
384
258
158
153,840
86.576
153,840
86,576
154,227
84,340
154,221
84,340
53,306
240,416
240,416
238,567
238,561
3
-310
42
2,349
42
-2,349
45
310
-1,413
-76
-8,668
584
-8,668
-584
-10,385
76
53,517
393
53,125
254,687
3,258
251,429
1,300
53
23
1,300
30
11,208
2512
201
106
1,164
453
285
12,854
906
65
41
30
17
3
2
3
-1,413
168
40
11
1,458
89
6
61
48
32
-7
-21
1,458
89
6
103
103
2
2
9
3
74
1,889
215
49
42
26
r ')
67
(' ')
3,333
66
140
182
111
39
331
("J
17
-65
3
926
14
99
367
227
89
541
367
192
169
(' .)
475
542
-10,385
-542
248,676
2,525
246,152
11,208
310
10,467
458
192
10,461
266
624
86
94
12,854
906
65
925
585
354
12,702
682
85
926
14
-70
(' ')
828
15
96
3
295
411
336
630
114
18
12,702
682
85
173
828
15
-18
3
16,273
1,215
15,058
49
42
498
739
(' 'J
498
739
468
802
(" ')
468
802
-26
259
-259
300
("J
(' 'J
(" 'J
(' 'J
-300
("J
2996
-996
-28
-26
26,970
28,442
627
958
1 ,444
1,030
573
-153
-250
654
952
1,537
1,033
553
-67
("J
-28
3,001
29,695
66
140
182
111
39
-17
627
958
1,444
1,030
575
4,385
197
36
60
103
("J
408
46
3
18
("J
(' *J
475
396
16
-1,653
15,498
520
18
45
1,653
1,268
18
3
46
16,766
2,725
3
153
-250
408
46
384
49
209
112
1,674
-1
538
54
-7
163
4,222
4,478
197
36
60
103
582
31
59
104
-3
3
393
-574
-26
2,282
26,160
17
122
-250
7
3
574
778
654
952
1,537
1,033
536
-122
-250
8
-8
147
4,331
582
31
59
3
104
-3
3
775
Table 5. Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
Classification
This Month
Current Fiscal Year to Date
Prior Fiscal Year to Date
Gross /APPlicable/ Outlays
Outlays
Receipts
Gross lAPPlicable/
Outlays Receipts
Outlays
Gross /APPlic.able/ Outla s
Outlays
Receipts
y
National Aeronautics and Space Administration:
Research and development ................................. .
Space flight, control, and data communications ........... .
Construction of facilities ................................... ..
Research and program management ...................... ..
Other ....................................................... ..
557
387
36
122
2
557
387
36
122
2
4,866
3,611
301
1,213
12
4,866
3,611
301
1,213
12
5,258
3,755
405
1,177
12
5,258
3,755
405
1,177
12
Total-National Aeronautics and Space
Administration ........................................... .
1,105
1,105
10,004
10,004
10,606
10,606
240
240
2,874
2,874
2,745
2,745
3,072
41
2
27,039
-450
-913
110
26,015
10,815
984
6
81
-25
-32
Office of Personnel Management:
Govemment payment for annuitants, employees health
and life insurance benefits ............................... ..
Payment to civil service retirement and disability fund .... .
Civil service retirement and disability fund ................. .
Employees health benefits fund ........................... ..
Employees life insurance fund .............................. .
Retired employees health benefits fund ................... .
Other ....................................................... ..
Intrabudgetary transactions:
Civil service retirement and disability fund:
General fund contributions ............................ ..
Other .................................................... .
Total-Office of Personnel Management
Small Business Administration:
PubliC enterprise funds:
Business loan fund ...................................... ..
Disaster loan fund ........................................ .
Other ...................................................... .
Other ........................................................ .
Total-Small Business Administration ...........•......
Other independent agencies:
Action ........................................................ .
Board for Intemational Broadcasting ....................... .
Corporation for National and Community Service ......... .
Corporation for Public Broadcasting ....................... .
District of Columbia:
Federal payment ......................................... ..
Other ..................................................... ..
Equal Employment Opportunity Commission ............... .
Export-Import Bank of the United States .................. .
Federal Communications Commission ...................... .
Federal Deposit Insurance Corporation:
Bank insurance fund ..................................... .
Savings aSSOCiation insurance fund ...................... .
FSLlC resolution fund .................................... .
Affordable housing and bank enterprise ................. .
Federal Emergency Management Agency:
Public enterprise funds ................................... .
Disaster relief ............................................. .
Emergency management planning and assistance ...... .
Other ...................................................... .
Federal Trade Commission ................................. .
Interstate Commerce Commission ......................... ..
legal Services Corporation ................................. .
National Archives and Records Administration ............. .
National Credit Union Administration:
Credit union share insurance fund ....................... .
Central liquidity facility .................................... .
Other ..................................................... ..
3,072
1,321
114
1,280
112
1
1
9
9
27,039
11,362
1,024
6
110
-3
-3
-25
..
(
)
11,812
1,937
6
..
(
)
26,015
-532
11,347
1,800
6
..
-817
)
(
81
-32
4,754
1,393
3,361
42,389
13,755
28,634
40,614
13,154
27,461
32
45
1
37
19
1
-5
)
408
175
17
308
216
10
100
-41
7
547
365
11
48
417
(
)
417
826
295
41
371
..
)
280
-70
30
371
68
1,017
534
483
1,534
923
611
15
15
5
124
144
23
275
124
144
23
275
151
169
151
169
319
319
48
..
(
)
..
26
(
58
126
15
15
5
..
698
-2
..
(
)
14
157
11
202
1
466
3
135
437
6
149
-2
1
14
-46
170
838
105
9
30
-3
-14
1
61
27
372
4
28
6
3
33
11
..
-16
( )
..
(
-34
372
4
28
6
3
33
)
11
3
-18
..
(
)
8
9
17
..
12
(
)
1,610
28
698
-11
169
-773
77
(
698
..
160
158
1,091
97
1,734
30
-6,338
-537
-853
3
6,647
37
2,394
11,789
446
1,065
-5,142
-410
1,329
1
374
1,640
201
249
63
31
299
144
)
(
2,227
19
1,670
3
8,565
557
2,523
309
2,807
157
195
65
31
297
163
306
3
..
597
1,640
201
249
63
31
299
144
223
2,807
157
195
65
31
297
163
-19
54
32
223
54
48
..
-17
17
75
30
336
75
46
(
)
698
-159
158
-642
68
1
-242
(
)
1
..
(
)
..
-320
(
)
-16
Table 5.
Outlays of the U.S. Government, June 1994 and Other Periods-Continued
[$ millions]
Classification
Other independent agencies:-Continued
National Endowment for the Arts
National Endowment for the Humanities
National Labor Relations Board
National SCience Foundation
Nuclear Regulatory CommiSSion
Panama Canal CommiSSion
Postal Service
PubliC enterprise funds (off-budget)
Payment to the Postal Service fund
Railroad Retirement Board:
Federal windfall subSidy
Federal payments to the railroad retirement accounts
Rail Industry pension fund:
Advances from FOASDI fund
OASDI certifications
Administrative expenses
Interest on refunds of taxes
Other
Intrabudgetary transactions:
Payments from other funds to the railroad
retirement trust funds
Other
Supplemental annuity pension fund
Railroad SOCial Security equivalent benefit account
Other
Total-Railroad Retirement Board
Resolution Trust Corporation
SecUrll1eS and Exchange Commission
Smithsonian Institution
Tennessee Valley Authority
United States Information Agency
Other
Total-Other independent agencies
....................
This Month
Current Fiscal Year to Date
Prior Fiscal Year to Date
Gross IAPPlicablel Outlays
Outlays
Receipts
Gross . )APPliC8ble) 0 tla
Outlays
Receipts
u ys
Gross jAPPIiC8blel
Outlays
Receipts
Outlay.
16
15
11
283
44
43
3,849
Total-Employer share. employee retirement
129
114
125
1,757
355
386
-2,231
107
33,781
130
204
38
204
38
219
44
219
44
-814
814
54
15
7
-801
801
52
5
4
-801
801
52
5
-3,435
207
2.168
3,508
3
2,775
9
46
129
120
127
1,876
397
389
34,122
-274
35,037
107
..22)
-91
91
6
-91
91
6
(
(' ')
22
.. )
(
(
346
421
37,268
129
114
125
1,757
337
408
36,381
17
-22
-2.601
130
1
1
-814
814
54
15
7
-3,526
232
244
402
-3,526
232
244
402
-3,526
194
2,195
3,590
-3.526
194
2,195
3,590
(' ')
(' ')
(' ')
(' ')
-3,435
207
2.168
3,508
3
-2,619
-2,619
2,773
2,773
2,775
14,859
41
274
7,091
872
1,906
10,948
9,798
80
289
6,322
754
887
26,116
1,034
3,911
41
274
792
872
872
128
-16,318
80
289
1,600
754
759
76,387
70,244
6,144
72,793
83,998
-11,205
(' ')
(. ')
r .)
("")
..)
2.562
7
35
362
138
243
1.329
155
1,233
7
35
-122
138
88
6,287
7,006
-720
r .)
(' ')
Undistributed offsetting receipts:
Other Interest
Employer share, employee retirement:
legislative Branch:
United States Tax Court:
Tax court ludges survivors annuity fund
The Judiciary:
Judicial survivors annUity fund
Department of Defense-Civil:
Military retirement fund
Department of Health and Human Services, except
SOCial Secunty
Federal hospital insurance trust fund:
Federal employer contributions
Postal Service employer contributions
Payments for military service credits
Department of Health and Human Services, Social
Security (off-budget):
Federal old-age and survivors insurance trust fund:
Federal employer contributions
Payments for military service credits
Federal disability insurance trust fund:
Federal employer contributions
Payments for military service credits
Department of State
Foreign Service retirement and disability fund
Office of Personnel Management·
C,Vil service retirement and disability fund
Independent agencies
Court of veterans appeals retirement fund
129
120
127
1,876
51
-32
16
15
11
283
35
-3
484
6,298
(' ')
4
4,722
(. ')
(' ')
r .)
(. ')
(.')
-1,067
-1,067
-9,602
-9,602
-9,859
-9,859
-143
-50
-143
-50
-1,343
-395
-1,343
-395
-1,337
-342
-1,337
-342
-464
-464
-4,056
-4,056
-4,007
-4,007
-50
-50
-436
-436
-428
-428
-9
-9
-82
-82
-81
-81
-777
-777
-7,326
-7,326
-7,101
-7,101
-23,155
-23,155
(
(
..)
(' .)
-2,559
-2,559
-23,241
..)
18
..
(
)
-23,241
Table 5. Outlays of the U.S. Govemment, June 1994 and Other Periods-Continued
[$ millions]
This Month
Classification
Undistributed offsetting receipts:-Continued
Interest received by trust funds:
The Judiciary:
Judicial survivors annuity fund
.......... .
Department of Defense-Civil:
Corps of Engineers
.. .. .. .. ... .. ........ ..
Military retirement fund ............................... ..
Education benefits fund ........... .. ............ ..
Soldiers' and airmen's home permanent fund ...... ..
Other .............................................. .
Department of Health and Human Services, except
Social Security:
Federal hospital insurance trust fund ............ .
Federal supplementary medical insurance trust fund ..
Department of Health and Human Services, Social
Security (off-budget):
Federal old-age and survivors insurance trust fund
Federal disability insurance trust fund .....
Department of Labor:
Unemployment trust fund .............................. .
Department of State:
Foreign Service retirement and disability fund
Department of Transportation:
Highway trust fund ........... .. .............. ..
Airport and airway trust fund ................. ..
Oil spill liability trust fund ............................. ..
Department of Veterans Affairs:
National service life insurance fund ................... .
United States government life Insurance Fund
Environmental Protection Agency ....
National Aeronautics and Space Administration
Office of Personnel Management
Civil service retirement and disability fund ............ .
Independent agencies:
Railroad Retirement Board ............................. .
Other ................................................... .
Other ................................................... ..
Total-Interest received by trust funds ............... .
Gross IAPPlicablel 0 tI
Outlays Receipts
u ays
Total-Undistributed offsetting receipts ... "...........
Total on-budget ................... " .................... ..
Total off-budget .......................................... .
Gross IAPPlicable
Outlays Receipts
J
-4
-4
..77
77
)
(
(<0)
..-2
-2
Out!
Prior Fiscal Year to Date
Gross
Outlays
ays
IApPI~blel
Receipts
Outla s
y
-13
-13
-13
-13
-10,147
-41
-13
-10,147
-41
-5
-5
-9,761
-46
-9,761
-46
-17
-13
-8
-8
-17
)
-1
-1
0)
-5,196
-968
-5.196
-968
-10.560
-2,058
-10,560
-2,058
-10,536
-1,871
-10,536
-1,871
-14.085
-252
-14,085
-252
-28,379
-28,379
-25,710
-25,710
-664
-664
-943
-943
-1,119
-1,119
-2,466
-2,466
-2,526
-2,526
-289
-289
-570
-570
-546
-546
-640
-640
-396
..)
-396
-1,372
-821
-1,372
-821
-1,540
-1,029
-1,540
-1,029
)
-7
-7
-43
-43
-537
-537
-5
-5
....
-1,078
-10
-1
-1
-1,083
-11
)
)
-1,078
-10
-1
-1
-1
-1
-1,083
-11
-1
-1
-12,952
-12,952
-26,072
-26,072
-25,089
-25.089
-30
-30
-456
-693
-11
-122
-10
-19
-693
-10
-19
-84,870
-81,493
-81,493
(00)
(
..
(
(
(0 0)
(0 0)
(
(
-9
-9
-456
-11
-122
-36,407
-36,407
-84,870
(0
r 0)
oJ
Rents and royalties on the outer continental shelf lands ..
Sale of major assets ........................ .. ........... ..
Total outlays......... .......... .••...........................
Current Fiscal Year to Date
268
-38,966
268
19,079
4,123
-268
2,308
-39,234 -108,111
r
-2,308
2,308 -110,419 -104,649
..
(
)
2,127
-2,127
2,127
-106,175
==============================================
138,671
15,749 122,923 1,236,713
147,499 1,089,213 1,216,315 156,792 1,059,523
==============================================
119,592
11,626 107,966 1,000,118
110,221 889,897
990,308 120,411
869,897
14,956
236,594
37,278
199,316
226,007
36,382
189,626
Total surplus (+) or deficit ....................•...........
+15,202
-150,087
-201,167
Total on-budget .......................................... .
-1,952
-204,043
-246,448
Total off-budget ..........................•................
+17,154
+53,956
+45,281
MEMORANDUM
Receipts offset against outlays
[$ millions]
Current
Fiscal Year
to Date
Proprietary receipts ............................... ..
Receipts from off-budget federal entities ......... .
Intrabudgetary transactions .... . .................... ..
Governmental receipts ........................................ .
Total receipts offset against outlays " ................. .
Comparable Period
Prior Fiscal Year
35,684
32,481
170,879
1,467
208,030
180.146
1,380
214,007
... No Transactions.
(0 OJ Less than $500,000
Note: Details may not add to totals due to rounding
'Includes FICA and SECA tax credits, non-rontributory military 5eIVice credits, special benefits
for the aged, and credit for unnegotiated OASI benefit checks.
'Prior period adjustment.
'The Postal Service acx:ounting is composed of thirteen 2!k1ay accounting periods. To
conform with the MrS calendar-rnonth reporting basis used by all other Federal agencies. the MrS
reflects USPS results through 6125 and estimates for $230 million for 6130.
19
Table 6.
Means of Financing the Deficit or Disposition of Surplus by the U.S. Government, June 1994 and Other Periods
[$ millions]
Assets and Liabilities
Directly Related to
Budget ON-budget Activity
Net Transactions
(-) denotes net reduction of either
liability or asset accounts
Account Balances
Current Fiscal Year
Fiscal Year to Date
This Month
!
This Year
liability accounts:
Borrowing from the public'
Public debt secunlles. issued under general Financing authorities:
Obligations of the United States. issued by'
United States Treasury
Federal Financing Bank
Total. public debt securities
Plus premium on public debt securities
Less discount on publiC debt securities
Total public debt securities net of Premium and
discount
Beginning of
Prior Year
This Month
287,330
4,396,489
15,000
4,411,489
4,594,296
15,000
4,609,296
4,630,802
15,000
4,645.802
-17
-9,366
363
4,445
1.373
86,397
1,364
75,554
1.356
77,031
243,662
283,247
4.326,466
4,535.108
4,570,128
36.506
234.313
287,330
36,506
234,313
-8
1,477
35,021
Agency securities. issued under speCial financing authonties (see
Schedule B. for other Agency borrowing, see Schedule C)
I
This Year
Close of
This month
127
2,778
2,697
24,682
27,334
27,461
35.148
246,441
285,944
4,351,149
4,562,441
4,597,589
33,265
86,211
83,335
1,116.740
1,169.686
1,202,951
15
-11,995
(' ')
12,709
698
713
33,250
98,206
83,335
1,104,032
1,168,988
1,202,238
1.898
148,235
202.609
3,247.117
3,393,453
3,395,352
8.852
152
843
-7.955
-1,248
147
-749
(. ')
-1.104
-339
7
-697
43.819
6.950
6,249
3.228
33,719
6.944
4,656
11.184
42.571
7,096
5,500
3.229
3,790
146,385
200,476
3,307,362
3,449,957
3,453,747
3.681
20.116
23,797
-7,933
6,418
3,800
-2.001
-1.515
1,799
17,289
35.217
52,506
5.675
21,519
27,194
9,356
41,635
50,991
209
528
9.203
-8,018
9,522
-8,018
209
528
-3.123
2.000
-1.123
1.185
1,504
9.731
-8.018
1,713
823
117
3
795
-134
4
12.063
-1,221
-10,177
-36
31.762
5.864
-25.514
-98
31,762
5.835
-25.765
-98
31,762
6,659
-25.648
-94
-595
-578
1,523
348
86
2.152
90
12,103
106
11,841
12,190
Loans to International Monetary Fund
Other cash and monetary assets
)
(00)
(oo)
-3,526
-675
-2,096
22,414
25,265
21,739
Total cash and monetary assets
20,828
-1,576
731
88,208
65.804
86,632
Total federal securities
Deduct:
Federal securities held as Investments of government accounts
(see Schedule D)
Less discount on federal securities held as investments of
government accounts
Net federal securities held as investments of government
accounts
Total borrowing from the public
Accrued interest payable to the public
Allocations of special drawing rights
Deposit funds
Miscellaneous liability accounts (includes checks Outstanding etc.)
Total liability accounts ....................................................
Asset accounts (deduct)
Cash and monetary assets:
U.S Treasury operating cash:'
Federal Reserve account
Tax and loan note accounts
Balance
Special drawing rights:
Total holdings
SDR certificates issued to Federal Reserve banks
Balance
Reserve pOSition on the U.S. quota in the IMF:
U.S. subscription to International Monetary Fund:
.................
Direct quota payments
Maintenance of value adjustments
Letter of credit issued to IMF ................ ..................
Dollar deposits with the IMF .'
Receivable/Payable (-) for interim maintenance of value
adjustments
Balance
Net activity. guaranteed loan financing
Net activity. direct loan financing .. '
Miscellaneous asset accounts
Total asset accounts
Excess of liabilities (+)
.....................................................
or assets (-) ....................................
-144
383
-2.022
-2.366
3,398
-2.657
-2.848
2,342
-672
-6,320
6,862
-636
-8,542
9.877
-1,272
-8,685
10.260
-3.294
19,046
-3,202
-447
88,114
65,867
84,912
-15,256
+149,586
+200,922
+3,219,248
+3,384,090
+3,368,835
54
501
245
447
501
-15,202
+150,087
+201,167
+3,384,537
+3,369,336
Transactions not applied to current year's surplus or deficit (see
Schedule a for Details)
..............
Total budget and off-budget federal entities (financing of deficit (+)
or disposition of surplus (-» ............................................
..
(
-489
'Major sOurces of InformatIOn used to determine Treasury's operating cash Income include the
Daily Balance Wires from Federal Reserve Banks. reporting from the Bureau of Public Debt.
electroniC transfers through the Treasury Financial CommunicatIOn System and reconciling wires
~rom Internal Revenue Centers Operating cash IS presented on a modified cash basis. depoSits
are reflected as received and Withdrawals are reflected as processed.
+3,219,248
... No Transactions.
Less than $500.000
Note: Details may not add to totals due to rounding
(" -j
20
Table 6. Schedule A-Analysis of Change in Excess of Liabilities of the U,S, Government, June 1994 and
Other Periods
[$ millions)
Fiscal Year to Date
Classification
This Month
I
This Year
...
Excess of habilities begInning of penod:
Based on composition of unified budget in preceding period
Adjustments during current fiscal year for changes in composition
of unified budget:
Reclassification of the Disaster Assistance liquidating Account,
FEMA, to a budgetary status ..
Revisions by federal agencies to the prior budget results
Reclassification of Thrift Savings Plan Clearing Accounts to a
non-budgetary status ............ . ................ .
Reclassification of Deposit in Transit Differences (Suspense)
Clearing Accounts to a budgetary status
Excess of liabilities beginning of period (current basis) ......... .
3,384,090
Prior Year
3,218,965
2,964,066
(
284
..
)
101
..
(
)
174
3,384,090
3,219,248
2,964,341
Budget surplus (-) or deficit:
Based on composition of unified budget in prior fiscal yr
Changes in composition of unified budget ................ .
-15,202
150,087
201,167
Total surplus (-) or deficit (Table 2)
-15,202
150,087
201,167
Total-on-budget (Table 2)
1,952
204,043
246,448
Total-off-budget (Table 2)
-17,154
-53,956
-45,281
-54
-501
..
-245
)
(' ')
-54
-501
-245
3,368,835
3,368,835
3,165,263
........... .
Transactions not applied to current year's surplus or deficit:
Seigniorage
................ .
Profit on sale of gold .................................... .
Total-transactions not applied to current year's Surplus or
deficit ........................................................ .
Excess of liabilities close of period .................................. .
(
Table 6. Schedule 8-Securities Issued by Federal Agencies Under Special Financing Authorities, June 1994 and
Other Periods
[$ millions]
Net Transactions
(-) denotes net reduction of
liability accounts
Account Balances
Current Fiscal Year
Classification
Fiscal Year to Date
This Month
This Year
Agency securities, issued under special financing authorities:
Obligations of the United States, issued by:
. ...........
Export-Import Bank of the United States ..............
Federal Deposit Insurance Corporation:
Bank insurance fund .................. ...............
FSlIC resolution fund .................. ...................
Obligations guaranteed by the United States, issued by:
Department of Defense:
Family housing mortgages ......................
Department of Housing and Urban Development:
Federal Housing Administration . . . . . . . . . . . . . . . .
Department of the Interior:
...................
Bureau of Land Management
Department of Transportation:
Coast Guard:
Family housing mortgages ............................
Obligations not guaranteed by the United States, issued by:
Legislative Branch:
Architect of the Capitol " ............. ............... ............
Independent agencies:
Farm Credit System Financial Assistance Corporation
National Archives and Records Administration
.............
Tennessee Valley Authority
Beginning of
1
Prior Year
)
(")
(
'" No Transactions.
(. 'J Less than $500,000.
Note: Details may not add to totals due to rounding.
21
..
)
-145
-194
93
943
93
797
93
797
(
..)
(")
7
6
6
-75
-18
213
131
138
13
13
13
12
Total, agency securities ...........................................
This Month
..
(
6
I
This Year
Close of
This month
..
(
11
176
187
188
1,261
302
24,543
1,261
302
24,662
27,334
27,461
120
2,988
2,898
1,261
302
21,675
127
2,778
2,697
24,682
)
..
(")
(
)
Table 6.
Schedule C (Memorandum)-Federal Agency Borrowing Financed Through the Issue of Public Debt Securities
June 1994 and Other Periods
I
[$ millions]
Account Balances
Current Fiscal Year
Transactions
Classification
Fiscal Year to Date
This Month
I
This Year
Borrowing from the Treasury:
Funds Appropriated to the President:
International Security ASSistance:
Guaranty reserve fund
Agency for International Development:
International Debt Reduction
Housing and other credit guaranty programs
Overseas Private Investment Corporation
Department of Agriculture:
Foreign assistance programs
Commodity Credit Corporation
Farmers Home Administration:
Agriculture credit insurance fund
Self-help housing land development fund
Rural housing insurance fund ...
Rural Development Administration:
Rural development insurance fund
Rural development loan fund ..
Federal Crop Insurance Corporation:
Federal crop insurance corporation fund
Rural Electrification Administration:
Rural communication development fund
Rural electrification and telephone revolving fund ..
Rural Telephone Bank
Department of Commerce:
. . . . . . . . .. .
Federal ship financing fund. NOAA
Department of Education:
Guaranteed student loans .....
College housing and academic facilities fund
College housing loans
Department of Energy:
Isotope production and distribution fund
Bonneville power administration fund
Department of Housing and Urban Development:
Housing programs:
Housing for the ederly and handicapped
Public and Indian housing:
Low-rent public housing
Department of the Interior:
Bureau of Reclamation Loans
Bureau of Mines. Helium Fund
Bureau of Indian Affairs:
Revolving funds for loans
Department of Justice:
Federal prison industries. incorporated
Department of State:
Repatriation loans
Department of Transportation:
Federal Railroad Administration:
Railroad rehabilitation and improvement financing funds
Settlements of railroad litigation
...........
Amtrak corridor improvement loans
Regional rail reorganization program
Federal Aviation Administration:
Aircraft purchase loan guarantee program ..
Department of the Treasury:
Federal Financing Bank revolving fund
Department of Veterans Affairs:
Loan guaranty revolving fund
Guaranty and indemnity fund
Direct loan revolving fund
Vocational rehabilitation revolving fund ...........
Environmental Protection Agency:
Abatement. contrOl. and compliance loan program
Small Business Administration:
...............
Business loan and revolving fund
Beginning of
This Year
Prior Year
405
This Month
405
405
348
125
16
348
125
16
8
3
348
125
8
42
354
-9.087
70
5.702
193
24.745
547
15.617
547
15.659
-98
-1.225
1
2.036
226
1
568
5.771
1
2.910
4.546
1
5.044
4.546
1
4.947
561
29
69
3
1.680
5
2.241
34
2.241
34
25
8.099
802
55
8.346
632
55
8.136
600
2.058
154
460
2.058
168
460
2.058
459
460
-113
-210
-32
"
I
Close 01
This month
31
37
-202
113
194
40
-2
291
304
(* *)
(" *)
-490
266
4
370
13
2.332
13
2.597
13
2.597
-475
185
8.959
8.484
8,484
25
25
110
135
135
6
2
5
252
11
252
11
252
9
8
17
26
26
20
20
20
-1
8
8
8
-39
2
39
15
-39
2
39
16
-39
2
39
(* *)
(" *)
(" *)
(* *)
(**)
-13.726
-31.469
114.329
101.092
100.603
1.158
612
7
1
514
183
(* *J
(" *)
860
83
1
2
2.018
695
8
2
2.018
695
8
2
10
4
12
22
22
3.203
5.667
5.667
2,464
22
("")
(* *)
Table 6. Schedule C (Memorandum)-Federal Agency Borrowing Financed Through the Issue of Public Debt Securities
June 1994 and Other Periods-Continued
'
[$ millions]
Account Balances
Current Fiscal Year
Transactions
Classification
Fiscal Year to Date
This Month
I
This Year
Borrowing for the Treasury:-Contlnued
Other independent agencies:
Export-Import Bank of the United States
Federal Emergency Management Agency:
National insurance development fund ...... .
Pennsylvania Avenue Development Corporation:
Land aquisition and development fund ..... .
Railroad Retirement Board:
Railroad retirement account ......... .
Social Security equivalent benefit account
Smithsonian Institution:
John F. Kennedy Center parking facilities
Tennessee Valley Authority................ . ......... .
Total agency borrowing from the Treasury
financed through public debt securities issued
Borrowing from the Federal Financing Bank:
Funds Appropriated to the President:
Foreign military sales ..................... .
Department of Agriculture:
Rural Electrification Administration
Farmers Home Administration:
Agriculture credit insurance fund
Rural housing insurance fund
Rural development insurance fund ...
Department of Defense:
Department of the Navy .......... .
Defense agencies ..... .
Department of Education:
Student Loan Marketing Association ..
Department of Health and Human Services,
Except Social Security:
Medical facilities guarantee and loan fund
Department of Housing and Urban Development:
Low rent housing loans and other expenses .. .
Community Development Grants ................... .
Department of Interior:
Territorial and international affairs ................ . .............. .
Department of Transportation:
Federal Railroad Administration ................ .
Department of the Treasury:
Financial Management Service .......... .
General Services Administration:
Federal buildings fund ................ .. ....... ..
Small Business Administration:
Business loan and investment fund ..
Independent agencies:
Export-Import Bank of the United States
Federal Deposit Insurance Corporation:
Bank insurance fund ........................... . ............. .
Pennsylvania Avenue Development Corporation ..
Postal Service ................................... . .................... .
Resolution Trust Corporation .............. .
Tennessee Valley Authority ...................... .
Washington Metropolitan Transit Authority ............... .
-78
-2,655
Beginning of
Prior Year
This Year
I
Close of
This month
This Month
811
191
386
1,197
1,197
47
8
42
167
89
9
3
76
85
85
-642
-692
2,128
2,690
2,128
4,703
2,128
2,048
20
150
20
150
20
150
-3,229
-16,272
-23,784
183,196
170,154
166,925
-31
-195
-185
4,083
3,919
3,888
-61
-296
-265
22,252
22,018
21,956
-765
-360
-1,675
-945
-3,250
8,908
26,036
3,675
7,998
25,451
3,675
7,233
25,091
3,675
-49
-48
1,624
-96
1,624
-145
1,624
-145
-4,790
-30
4,790
-10
-27
85
78
75
-54
-16
-52
-35
1,801
131
1,747
115
1,747
115
-1
-28
23
22
22
-2
-2
17
16
15
-30
-72
30
5
253
573
1,436
1,685
1,690
-17
-74
-82
670
613
596
-464
-1,411
-1,440
5,795
4,847
4,383
8
75
-258
-2,785
-1,950
488
150
9,732
31,688
6,325
177
217
9,473
27,402
4,675
665
225
9,473
28,902
4,375
665
129,332
116,095
115,605
-4
-1
1,500
-300
-490
Total borrowing from the Federal Financing Bank ............... .
-13,726
-7,660
48
278
-17,448
-1,763
-31,488
... No Transactions
(' .) Less than $500,000
Note: Details may not add to totals due to rounding
Note: This table includes lending by the Federal Financing Bank accomplished by the purchase
of agency financial assets. by the acquisition of agency debt securities, and by direct loans on
behalf of an agency. The Federal Financing Bank borrows from Treasury and issues its own
securities and in tum may loan these funds to agencies in lieu of agencies borrowing directly
through Treasury or iSSUing their own securities.
23
Table 6.
Schedule D-Investments of Federal Government Accounts in Federal Securities, June 1994 and
Other Periods
[$ millions]
Securities Held as Investments
Current Fiscal Year
Net Purchases or Sales (-)
Classification
Fiscal Year to Date
This Month
I
This Year
Beginning of
Prior Year
This Year
I
Close of
This month
This Month
Federal funds:
Department of Agriculture
Department of Commerce
Department of Defense-Military:
Defense cooperation account
Department of Energy
Department of Housing and Urban Development:
Housing programs:
Federal housing administration fund:
Public debt securities
Government National Mortgage Association:
Management and hquidating functions fund:
Public debt securities
Agency securities
Guarantees of mortgage-backed securities:
Public debt securities
Agency securities
Other
Department of the Interior:
Public debt securities
Department of Labor
Department of Transportation
Department of the Treasury
Department of Veterans Affairs:
Canteen service reVOlving fund
Veterans reopened insurance fund
Servicemen's group life insurance fund
Independent agencies:
Export-Import Bank of the United States
Federal Deposit Insurance Corporation:
Bank insurance fund
Savings association insurance fund
FSlIC resolution fund
PubliC debt securities
Federal Emergency Management Agency:
National flood insurance fund ...
National Credit Union Administration
Postal Service ....
Tennessee Valley Authority ....
............
Other ....
Other
(' .)
(' .)
3
1
10
2
13
("')
-47
-4
410
-2.020
306
9
4.081
5
4.538
5
4,491
..
479
-300
5.214
5.693
5.693
-9
-4
2
9
20
16
16
346
328
(
(
3.537
1
184
3.567
1
184
(
)
30
..
-6
7
462
-11.783
13
1.652
356
795
76
2.278
2.508
16.590
881
5.773
2.987
4.820
940
6.736
2.971
4.807
894
7.426
3
14
-108
-3
-44
38
518
150
41
513
41
41
532
42
-349
83
203
76
508
159
-11
3
6.421
538
-2.460
410
4.325
1.283
10.757
1.818
10.746
1.822
13
1.316
-838
828
2.131
2.145
-71
259
2.430
502
82
-202
-422
335
2.413
-720
55
202
71
2.764
3.027
3,452
853
2,715
3.012
5.D78
3.954
936
2.904
3.023
5.457
3,954
935
2,513
2,830
-4
977
..
58.589
21
61.149
)
17
61.419
17
2,826
917
58,610
61,166
61,436
..3
)
)
..
1
4
27
4
5
27
4
5
27
212
5
239
199
239
200
)
(")
-17
19
11
379
-1
-391
270
.............................................
..
13
3.221
1
191
-13
-47
690
Total public debt securities ....
Total agency securities
Total Federal funds
-2
(' ')
270
)
)
17
(
Trust funds:
Legislative Branch:
Library of Congress
United States Tax Court
Other
The Judiciary:
Judicial retirement funds
Department of Agriculture
...........
Department of Commerce
Department of Defense-Military:
Voluntary separation incentive fund
Other
Department of Defense-Civil:
...........
Military retirement fund
Other
..
(
)
..
..3)
(
(
)
1
..
)
27
195
15
7
)
(' .)
..
)
-37
7
895
-7
844
151
815
159
808
159
-1,182
-9
11,987
31
12.094
382
96.690
1.213
109.859
1.252
108.6n
1.243
.............
(
.............
..
(
-7
(
...........
(
(
24
..
(
Table 6. Schedule D-Investments of Federal Government Accounts in Federal Securities, June 1994 and
Other Periods-Continued
[$ millions]
Securities Held as Investments
Current Fiscal Year
Net Purchases or Sales (-)
Classification
Fiscal Year to Date
Beginning of
This Month
I Prior Year
This Year
This Year
I
Close of
This month
This Month
Trust Funds-Continued
Department of Health and Human Services, except Social Security:
Federal hospital insurance trust fund:
Public debt securities ............................................. .
Federal supplementary medical insurance trust fund .................. .
Other .................................................................... .
Department of Health and Human Services, Social Security:
Federal Old-age and survivors insurance trust fund:
Public debt securities ................................................. .
Federal disability insurance trust fund ............ .
Department of the Interior:
Public debt securities .............................. .
Department of Justice .............. .
Department of Labor:
Unemployment trust fund ........... .
Other .............................................................. .
Department of State:
Foreign Service retirement and disability fund .............. .
Other .......................................................... .
Department of Transportation:
Highway trust fund ........ ......................
. ............. .
Airport and airway trust fund .......................................... .
Other ................................ .
Department of the Treasury .......... .
Department of Veterans Affairs:
General post fund, national homes
National service life insurance:
Public debt securities .................................... . ......... .
United States government life Insurance Fund .......... .
Veterans special life insurance fund ............................ .
Environmental Protection Agency ........................... .
National Aeronautics and Space Administration
Office of Personnel Management:
Civil service retirement and disability fund:
Public debt securities ................................................. .
Employees health benefits fund ........................................ .
Employees life insurance fund .......... .. .. .. .. ..
. ............. ..
Retired employees health benefits fund ..
Independent agencies:
Harry S. Truman memorial scholarship trust fund
Japan-United States Friendship Commission .................... .
Railroad Retirement Board ............................................ ..
Other .................................................................. ..
5,310
198
30
5,520
289
139
7,575
4,317
53
126,078
23,268
659
126,289
23,360
768
131,599
23,557
798
16,812
118
54,164
-2,183
43,727
-1,407
355,510
10,237
392,862
7,936
409,674
8,054
-5
-15
26
52
-187
118
184
215
67
210
52
-621
-14
2,419
-30
522
-30
36,607
53
39,646
36
39,026
23
260
478
12
455
38
6,662
38
6,880
50
7,140
50
339
344
-12
-27
-1,648
-144
-100
-50
2,736
-1,733
153
-54
22,004
12,672
1,675
209
20,018
12,183
1,588
186
20,357
12,527
1,576
159
(")
5
39
38
38
530
-8
75
831
(")
384
-7
66
528
1
11,666
125
1,462
5,477
16
11,610
118
1,466
5,971
16
12,051
117
1,527
6,005
16
11,020
-41
-1
9,801
581
923
9,573
497
820
(")
(")
(")
311,705
6,794
13,688
1
310,485
7,416
14,613
1
321,506
7,375
14,612
1
1
(
)
(")
-36
-1
..
2
(")
-150
101
342
16
52
17
11,961
125
53
17
11,847
227
53
17
11,811
225
441
(")
61
33
("')
32,995
83,384
82,358
1,058,131
1,108,519
1,141,515
Total trust funds ....• ,., ........................................ .
32,995
83,384
82,358
1,058,131
1,108,519
1,141,515
Grand total ................................................................. .
33,265
86,211
83,335
1,116,740
1,169,686
1,202,951
Total public debt securities ....................................... .
Note: Investments are in public debt securities unless otherwise noted.
Note: Details may not add to totals due to rounding.
... No Transactions
(" ') Less than $500,000.
25
Table 7. Receipts and Outlays of the U.S. Government by Month, Fiscal Year 1994
[$ millions]
Oct.
Classification
Noy.
Dec.
Jan.
March
Feb.
April
Receipts:
May
June
July
Aug.
Sept.
Fiacal
Veer
To
Oete
Compe"bIe
PetIoct
Prtor
F.Y.
Individual Income taxes
Corporation Income taxes .
Social insurance taxes and
contnbutions:
Employment taxes and
.. .....
contnbutions
Unemployment insurance
Other retirement contributions
. .......
ExCise taxes ..........
. .. . ..
...
Estate and gift taxes
........
Customs duties ...
Miscellaneous receipts .
37.680
2.158
37.634
2,208
54.183
28.239
74.167
3.916
28.107
1.594
29.917
15.574
60.038
20.586
24.384
2.817
58.123
29.114
404.232
106,207
3n,104
29.440
1.046
31.525
2,773
385
4.808
1.305
1,688
781
33.273
259
423
4.695
1.179
1.584
1.575
35,831
794
358
4.011
1.105
1.526
1.258
32,957
2.664
367
3,249
1,093
1,419
1,424
35.976
522
459
5,285
1.211
1.745
2,418
47.348
2.605
370
4.050
2,378
1,479
2,472
35.749
10,426
364
5.253
1.342
1,620
1,589
40.853
290
366
4.596
1,068
1,711
2,003
322,953
21,379
3,434
39.544
11,671
14,479
15,226
298,428
19,624
3,538
35,164
...........
78,668
83,107 125,408 122,966
72,874
93,108 141,326
83,546 138,124
939,126
(On-budget) ........................
55,864
58,700
99,714
94,395
46,880
64,611 104,311
55,366 106,014
685,854
(Off-budget) ........................
22,804
24,407
25,694
28,571
25,995
28,497
32,110
253,272
......
858.355
Total-Receipts this year
343
3.597
990
1,708
1,706
37,015
28,179
88,372
9,433
13,567
13,124
......
., ....
76.829
74,629 1J 3.686 1J 2.716
65.979
83.288 132.017
70.642 128.570
......
55.052
51.215
89.590
90.127
40.879
57.094
96.307
44.520
98.663
......
623.449
21.776
23.414
24.096
22.589
25./00
26.194
35.709
26.122
29.906
......
234.907
378
158
20
206
219
18
204
190
16
212
179
20
202
177
14
198
386
14
164
182
25
188
224
16
191
159
14
1.942
1,874
156
1,800
1,867
147
3,302
397
366
129
347
92
541
406
258
5,838
6,178
557
133
351
348
242
17
388
156
176
5
325
-426
518
101
281
86
233
-305
3,070
116
2,911
945
900
3,993
264
2.263
4,886
277
2.614
3,794
282
974
3,815
244
1.369
3,373
245
1.130
4,264
261
1.342
3.873
231
702
4.206
173
26
4,138
201
11,320
36.341
2,179
17,145
34,920
1,999
6.634
6,413
5.131
5.357
7.049
5.132
8,626
6.953
5,746
2.944
8,668
4.043
5.835
6.156
5.600
5.959
8.169
6.361
8.098
7.089
4.493
3,150
6,354
4.545
6.076
7,890
5.461
52,681
64,741
46,512
56,846
70,296
2,987
404
226
2,875
388
208
2.949
390
241
2.678
415
273
2,252
344
265
3,292
372
303
2,691
188
326
3.090
465
263
3.159
465
294
25,972
3,432
2,399
28,282
3,488
2,381
1,568
-217
816
-28
275
572
-892
-12
542
-52
-1.153
69
876
-209
569
93
37
-189
2,638
28
-4,678
-1,039
.....
23.147
21,796
25.752
18,117
20,943
23.372
23.552
18.530
23.195
198,403
209,615
..... . . . . . . . . . . . . . . . . ..
Civil
Department of Education ........ ....
........
Department of Energy .
Department of Health and Human
Services. except Social Security:
Public Health Service ....... .... ....
Health Care Financing Administration:
Grants to States for Medicaid .....
Federal hospital ins. trust fund
Federal supp. med. ins. trust
.... .. . ...
fund
.....
Other
Social Security Administration
Administration for children and
. . . . . . .. .
families.
....
.....
Other.
De partment of Health and Human
ServlceS. Social Security:
Federal old-age and survivors ins.
tnust fund
Federal disability ins trust fund
Other
De partment of Housing and Urban
......
De veJopment
2,550
1.805
1.710
2,515
3,356
1.723
2.550
2,535
1,492
2.509
1,102
1.269
2,459
1.202
1.221
2,471
1.004
1.561
2.513
2,068
1.263
2,507
2.243
1.158
2,542
2,144
1.568
22,615
17,460
12,965
21,942
22,892
12,395
1,467
1,700
1,633
1,178
1,694
1.954
1.462
1.630
1,919
14.637
14,012
7.394
7.432
6,626
8,006
7.088
9.319
6.097
7.193
6,202
8,196
7.220
10.069
6,475
8.224
6,982
8.339
7,456
9,374
61,539
76,152
55,837
68,087
4.650
3.783
2.970
4.838
3,801
2.061
5.846
3.782
3,892
4.170
2,968
1.760
4.213
2.926
2,087
5,293
3.605
2.110
4.533
3,572
5.625
4.623
3,001
298
5,416
3,565
2.015
43,581
31,004
22,818
39,734
33,701
22,050
2,797
-5.060
2,723
-5.060
2,828
-5.094
2,771
-4,429
2.864
-4.525
2.359
-5,109
2,910
-5.059
2,622
-4,501
2.208
-5,043
24,082
-43,880
-44,888
22.546
2.992
-977
22,554
2.998
-7
22.927
2.991
-17
23.097
3.054
-1.559
23.250
3.077
-10
23,297
3,212
-13
23.398
3,231
-1,558
23.252
3,275
-9
26.765
3,323
-8
211,087
28,152
-4,157
202.321
25,637
2.645
2,415
2.309
1.564
1.886
2.278
2,246
2.048
2,125
19,516
18,641
To/al-Receip/s prior year
(On budget)
...
(Off budget)
Outlays
...
.............
Legislative Branch
.. .
The Judiciary ...... ... ... . ....
EXeCIUtive Office of the President ..
Funds Appropriated to the President:
International Security Assistance .....
International Development
ASSistance ............ .............
.. . ..
Other. ... .......... ........
Department of Agriculture:
Foreign assistance. special export
programs and Commodity Credit
.....
.. ....
Corporation
. .............
......
Other.
Department of Commerce ... ...........
Department of Defense:
Military:
... . ..
Military personnel ....... ,.
Operation and maintenance ........
........... ,.
Procurement ......
Research. development. test. and
............
evaluation . . . . . , ..
Military constnuction ...............
Family housing ....... , .......
Revolving and management
. . . . .. . . . . . .. . . . . .
funds ..
..... ... ... . ....
Other
.
Total Military ...
..
26
54,040
21.045
-4,644
Table 7. Receipts and Outlays of the U.S. Government by Month, Fiscal Year 1994-Continued
[$ millions]
Noy.
Oct.
Classification
Dec.
Jan.
Feb.
March
April
May
June
Aug.
July
Comparable
Period
Prior
F.Y.
Fiscal
Year
To
Date
Sept.
Outlays-Continued
Department of the Interior ..............
Department of Justice ........ ..........
Department of Labor:
Unemployment trust fund ..... , .......
Other ................... " .............
Department of State ....................
Department of Transportation:
Highway trust fund ...................
Other ..................................
Department of the Treasury:
Interest on the public debt ...........
Other ................................. ,
Department of Veterans Affairs:
Compensation and pensions ..........
National service life ...................
Un~ed States govemment life ........
Other ............... ..................
Environmental Protection Agency .......
General Services Administration .........
National Aeronautics and Space
Administration ..........................
Offioe of Personnel Management .......
Small Business Administration . . . . . . . . ..
Independent agencies:
Fed. Deposit Ins. Corp.:
Bank insurance fund ....... , .......
Savings association insurance
fund . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .
FSLlC resolution fund ..............
Postal Service:
Public enterprise funds (offbudget) ............................
Payment to the Postal Service
fund ...............................
Resolution Trust Corporation .........
Tennessee Valley Authority ...........
Other independent agencies ..........
Undistributed offsetting receipts:
Employer share, employee
retirement ............................
Interest received by trust funds ......
Rents and royalties on outer
continental shelf lands ...............
Other .............. ..... .............
527
749
600
905
507
773
675
822
499
734
631
1,023
489
802
448
836
634
790
5,009
7,435
4,751
7,726
2,710
652
843
2,762
61
586
3,146
673
478
3,044
463
407
3,080
444
360
3,183
26
417
2,369
881
251
2,128
551
320
2,064
729
338
24,485
4,480
4,002
30,493
3,559
4,185
1,774
1,377
1,601
1,651
1,516
2,224
1,244
1,255
1,271
1,541
1,135
1,791
1,203
1,459
1,434
1,469
1,755
1,432
12,932
14,200
11,014
13,392
17,638
-102
22,260
75
52,712
983
17,899
590
16,208
4,931
18,122
2,844
18,328
1,207
23,943
666
53,306
-181
240,416
11,013
238,567
7,585
1,400
66
2
1,338
430
239
1,406
57
1
1,705
506
-489
2,748
75
2
1.613
458
384
61
68
1
2,001
456
-658
1,434
57
1
1,618
430
344
1,463
122
2
1,179
543
231
2,787
72
2
1,045
440
-549
97
74
2
1,472
439
417
1,458
77
2
1,464
520
475
12,854
667
14
13,436
4,222
393
12,702
528
15
12,916
4,331
775
1,079
3,335
14
1,214
2,879
146
1,191
3,079
49
1,015
3,249
-7
1,029
3,098
27
1,275
3,207
64
986
3,413
52
1,110
3,012
70
1,105
3,361
68
10,004
28,634
483
10,606
27,461
611
52
-182
-1,322
-452
-3,558
-379
-145
-382
30
-6,338
-5,142
-5
(. ')
4
8
8
-140
-25
-93
-492
-253
-7
-15
-2
-552
-16
207
-3
-14
-537
-853
-410
1,329
-509
-237
146
194
184
-746
-1,049
60
-274
-2,231
-2,601
61
7
106
1,705
......
. ....
......
-678
32
1,780
-439
-18
1,973
23
783
101
1,489
. .....
2,471
101
991
23
-74
212
1,402
. .....
-1,169
168
2,048
1,777
213
1,474
1,233
-122
-1,569
107
3,911
792
11,292
130
-16,318
1,600
10,207
-2,449 -2,592
-5,173 -36,027
-2,601
-122
-2,592
-458
-2,733
-130
-2,585
-726
-2,557 -2,559
-5,467 -36,407
-23,241
-84,870
-23,155
-81,493
-145
-313
-223
-266
-136
(
. .....
. .....
-2,572
-359
....
..)
-2,308
..
-2,127
124,090 121,488 133,660 107,718 114,440 125,423 123,872 115,600 122,923
1,089,213
......
-21
..
(
)
-461
..)
(
n
..)
n
..
-475
-268
(
(
)
(
)
..
(
)
Totals this year:
Total ouUays
.........................
(On-budget) .......... , .....•....•••
100,567
(Off-budget) ....••••••.•..•••...•...
23,523
Total-surplus (+) or deficit (-)
.....
96,724 121,977
83,526
88,523 100,259 100,625
89,728 107,966
889,897
11,683
24,192
25,917
25,871
14,956
199,316
-8,252 +15,248 -41,566 -32,315 +17,454 -32,054 +15,202
24,764
-45,422 -38,381
25,164
(On-budget) ••••••.•........•....... -44,704 -38,024 -22,263 +10,869 -41,644 -35,648
(Off-budget) ••••••••...........••...
719
....
4,255
Total borrowing from the public
Total-outlays prior year .........
(On-budget) . ....
..... . .....
(Off-budget) ........
..
..........
Total-surplus (+) or deficit (-) prior
year ........ ........ .............
(On-budget) ..
... ... .... ... ..
(Off-budget) ... ....... . . . . . . . .
-357 +14,012
71,028
13,995
125,620 107.355 152,633
103,780
21,841
+3,686 -34,362
......
-150,087
......
......
-1,952
-204,043
......
+4,379
+77
+3,333 +13,768
+2,308 +17,154
+53,956
......
6,933
31,633
26,511 -21,801
27,649
148,235
202,609
1,898
82,899 114,477 127,263 124,200 107,605 117,471
. ..... 1,059,523
83,436 116,572
84,925
89,720 103,025 101,752
83,210 103,477
.. ...
869,897
23,919
-2,025
24,757
24.395
. ...
189,626
36.061
24,237
-48,792 -32.726 -38,947 +29,817 -48,498 -43,974
48,727 -32,221 -26,982
65
23,247
505
+5,202
48,842
11,965 +24,614
+344
'" No transactions.
(' 'j Less than $500.000.
Note: Details may not add to totals due to rounding.
27
45.931
22,448
13.994
+7,817 -36,963 +11,099
5,445
+1,957 +13,261
38,690
. ..... -201,167
-4.813
+1,727 +15.912 ,
,
,
,
. ...
-246,448
. ...
+45,281
Table 8.
Trust Fund Impact on Budget Results and Investment Holdings as of June 31, 1994
[$ millions]
Securities held as Investments
Current Fiscal Vear
Fiscal Vear to Date
This Month
Classification
Beginning of
Receipts
Outlays
Excess
Receipts
Outlays
Excess
This Vear
Trust receipts, outlays, and investments
held:
Airport
Black lung disability
Federal disability insurance
Federal employees life and health
Federal employees retirement
Federal hospital insurance
Federal old-age and survivors insurance
Federal supplementary medical insurance
Highways
Military advances
Railroad retirement
Military retirement
Unemployment
Veterans life insurance
All other trust
37.700
81.648
265.122
43.876
14.077
9.599
6,463
31.657
26.921
1.348
3.940
4.546
451
28.152
-1.079
27.350
76.152
211,087
43.581
15.729
9.997
5.862
19.932
24.485
870
2,984
12
15
-2,310
1.079
10.350
5.496
54,035
294
-1.653
-399
601
11.725
2,435
478
955
35,749
553,214
162.386
470,101
162,386
83,113
10,979
35,749
390,828
307,715
83,113
94,469
253
115,017
253
-20,547
572,582
410
805,782
410
-233,200
94.216
114,764
-20,547
572,173
805,373
-233,200
2.820
2,820
23,874
23.874
138,124
122,923
14.394
14.829
43.558
5.432
2.202
1.199
3.221
990
1.553
568
439
472
49
3.323
54
3.109
9.374
26.765
5,416
1.889
1,175
652
2.248
2.064
40
349
407
6
88
-54
11.285
5.455
16.793
15
313
24
2.569
-1.258
-510
528
90
Less: Interfund transactions . . . . . . . . . . .
92,729
46,002
56,980
46.002
Trust fund receipts and outlays on the basis
...........
of Tables 4 & 5
46,728
Total Federal fund receipts and outlays
Less: Interfund transactions
Federal fund receipts and outlays on the
basis of Table 4 & 5
878
55
3.411
4.558
465
25.842
I
This Month
12.672
12.183
12.527
10.237
20.484
318.583
126.078
355.510
23.268
22,004
7.936
22.030
317.609
126,289
392.862
23,360
20,018
8,054
21,988
328,889
131,599
409.674
23.557
20,357
11,961
96,690
36.607
13,253
10,784
11.847
109,859
39.646
13,193
11,687
1,058,131
1,108,519
Total trust fund receipts and outlays
and investments held from Table 6-
0
..........................................
Less: offsetting proprietary receipts
Net budget receipts & outlays
...............
15,202
939,126 1,089,213
-150,087
Note: Details may not add to totals due to rounding.
. . No transactions.
Note: Interfund receipts and outlays are transactions between Federal funds and trust funds
such as Federal payments and contributions. and interest and profits on investments in Federal
securities. They have no net eHect on overall budget receipts and outlays since the receipts side of
such transactions is oHset against bugdet outlays. In this table. Interfund receipts are shown as an
ad,ustment to arrive at total receipts and outlays of trust funds respectively
28
Close of
This Month
11,811
108,6n
39,026
13,695
11,661
1,141,515
Table 9. Summary of Receipts by Source, and Outlays by Function of the U.S. Government, June 1994
and Other Periods
[$ millions]
Classification
This Month
Fiscal Year
To Date
Comparable Period
Prior Fiscal Year
Individual income taxes ........................................... .
Corporation income taxes ........................ .. ............. ..
Social insurance taxes and contributions:
Employment taxes and contributions .......................... ..
Unemployment insurance ....................................... .
Other retirement contributions .................................. .
Excise taxes ....................................................... .
Estate and gift taxes ............................................ ..
Customs ........................................................... .
Miscellaneous ...................................................... .
58,123
29,114
404,232
106,207
377,104
88,372
40,853
290
366
4,596
1.068
1,711
2.003
322,953
21,379
3,434
39,544
11,671
14,479
15,226
298,428
19,624
3,538
35,164
9,433
13.567
13.124
Total ........................................................ .
138,124
939,126
858,355
National defense ............. .. ................................... .
International affairs ................................................ .
General science. space. and technology ......................... .
Energy ............................................................. .
Natural resources and environment ............................... .
Agriculture ........................................................ .
Commerce and housing credit .................................... .
Transportation ..................................................... .
Community and Regional Development .......................... ..
Education, training, employment and social services ............ .
Health .............................................................. .
Medicare ........................................................... .
Income security ................................................... ..
Social Security ......... .. ......................................... .
Veterans benefits and services ................................... .
Administration of justice .......................................... ..
General govemment ............................................... .
Interest ............................................................. .
Undistributed offsetting receipts .................................. .
24.197
582
1,596
261
1,670
320
1.016
3.151
1,184
3,797
9,729
13,279
13,139
30,088
3,011
1,136
1.715
15.880
-2,827
207,933
13,044
12.940
3,356
15,365
14.204
-4.972
26,853
8.189
32.352
79,774
106,576
162,987
239,234
27,171
11,277
8,743
149,735
-25,548
218,505
13.885
12.589
4,124
15,275
19,680
-21.095
24,956
7,383
36,367
73,513
96,492
158,784
227,944
26.353
11,119
10,143
148,787
-25,282
Total ....••.....................•••.•......•.•.•••••..........
122,923
1,089,213
1,059,523
RECEIPTS
NET OUTLAYS
Note: Details may not add to totals due to rounding.
Explanatory Notes
the employee and credits for whatever purpose the money was withheld.
Outlays are stated net of offsetting collections (including receipts of
revolving and management funds) and of refunds. Interest on the public
debt (public issues) is recognized on the accrual basis. Federal credit
programs subject to the Federal Credit Reform Act of 1990 use the cash
basiS of accounting and are divided into two components. The portion of
the credit activities that involve a cost to the Government (mainly
subsidies) is included within the budget program accounts. The remaining
portion of the credit activities are in non-budget financing accounts.
Outlays of off-budget Federal entities are excluded by law from budget
totals. However, they are shown separately and combined with the on.
budget outlays to display total Federal outlays.
1. Flow of Data Into Monthly Treasury Statement
The Monthly Treasury Statement (MTS) is assembled from data In the
central accounting system. The major sources of data include monthly
accounting reports by Federal entities and disbursing officers, and daily
reports from the Federal Reserve banks. These reports detail accounting
transactions affecting receipts and outlays of the Federal Government
and off-budget Federal entities. and their related effect on the assets and
liabilities of the U.S. Government. Information is presented in the MTS on
a modified cash basis.
2. Notes on Receipts
Receipts included in the report are classified into the following major
categories: (1) budget receipts and (2) offsetting collections (also called
: pplicable receipts). Budget receipts are collections from the public that
result from the exercise of the Government's sovereign or governmental
powers, excluding receipts offset against outlays. These collections, also
called governmental receipts, consist mainly of tax receipts (including
social insurance taxes), receipts from court fines, certain licenses, and
depoSits of earnings by the Federal Reserve System. Refunds of receipts
are treated as deductions from gross receipts.
Offsetting collections are from other Government accounts or the
public that are of a business-type or market-oriented nature. They are
classified into two major categories: (1) offsetting collections credited to
appropriations or fund accounts, and (2) offsetting receipts (Le., amounts
depoSited in receipt accounts). Collections credited to appropriation or
fund accounts normally can be used without appropriation action by
Congress. These occur in two instances: (1) when authorized by law,
amounts collected for materials or services are treated as reimbursements to appropriations and (2) in the three types of revolving funds
(public enterprise, intragovernmental, and trust); collections are netted
against spending, and outlays are reported as the net amount.
Offsetting receipts in receipt accounts cannot be used without being
appropriated. They are subdivided into two categories: (1) proprietary
receipts-these collections are from the public and they are offset against
outlays by agency and by function, and (2) intragovernmental fundsthese are payments into receipt accounts from Governmental appropriation or funds accounts. They finance operations within and between
Government agencies and are credited with collections from other
Government accounts. The transactions may be intrabudgetary when the
payment and receipt both occur within the budget or from receipts from
off-budget Federal entities in those cases where payment is made by a
Federal entity whose budget authority and outlays are excluded from the
budget totals.
Intrabudgetary transactions are subdivided into three categories:
(1) interfund transactions, where the payments are from one fund group
(either Federal funds or trust funds) to a receipt account in the other fund
group; (2) Federal intrafund transactions, where the payments and
receipts both occur within the Federal fund group; and (3) trust intrafund
transactions, where the payments and receipts both occur within the trust
fund group.
Offsetting receipts are generally deducted from budget authority and
outlays by function, by subfunction, or by agency. There are four types of
receipts, however, that are deducted from budget totals as undistributed
offsetting receipts. They are: (1) agencies' payments (including payments
by off-budget Federal entities) as employers into employees retirement
funds, (2) interest received by trust funds, (3) rents and royalties on the
Outer Continental Shelf lands, and (4) other interest (Le., interest collected
on Outer Continental Shelf money in deposit funds when such money is
transferred into the budget).
4. Processing
The data on payments and collections are reported by account symbol
into the central accounting system. In tum, the data are extracted from
this system for use in the preparation of the MTS.
There are two major checks which are conducted to assure the
consistency of the data reported:
1. Verification of payment data. The monthly payment activity reported by
Federal entities on their Statements of Transactions is compared to the
payment activity of Federal entities as reported by disbursing officers.
2. Verification of collection data. Reported collections appearing on
Statements of Transactions are compared to deposits as reported by
Federal Reserve banks.
5. Other Sources of Information About Federal Government
Financial Activities
• A Glossary of Terms Used in the Federal Budget Process, March
1981 (Available from the U.S. General Accounting Office, Gaithersburg,
Md. 20760). This glossary provides a basic reference document of
standardized definitions of terms used by the Federal Government in the
budgetmaking process.
• Daily Treasury Statement (Available from GPO, Washington, D.C.
20402, on a subscription basis only). The Daily Treasury Statement is
published each working day of the Federal Government and provides data
on the cash and debt operations of the Treasury.
• Monthly Statement of the Public Debt of the United States
(Available from GPO, Washington, D.C. 20402 on a subscription basis
only). This publication provides detailed information concerning the public
debt.
• Treasury Bulletin (Available from GPO, WaShington, D.C. 20402, by
subscription or single copy). Quarterly. Contains a mix of narrative, tables,
and charts on Treasury issues, Federal financial operations, intemational
statistics, and special reports.
• Budget of the United States Government. Fiscal Year 19 _
(Available from GPO, Washington, D.C. 20402). This publication is a
single volume which provides budget information and contains:
-Appendix, The Budget of the United States Government, FY 19_
-The United States Budget in Brief, FY 19 _
-Special Analyses
-Historical Tables
-Management of the United States Government
-Major Policy Initiatives
3. Notes on Outlays
Outlays are generally accounted for on the basis of checks issued,
electronic funds transferred, or cash payments made. Certain outlays do
not require issuance of cash or checks. An example is charges made
against appropriations for that part of employees' salaries withheld for
taxes or savings bond allotments - these are counted as payments to
• United States Government Annual Report and Appendix (Available
from Financial Management Service, U.S. Department of the Treasury,
Washington, D.C. 20227). This annual report represents budgetary
results at the summary level. The appendix presents the individual receipt
and appropriation accounts at the detail level.
30
Scheduled Release
The release date for the July 1994 Statement will be 2:00 pm EST August 19, 1994.
For sale by the Superintendent of Documents, u.s. Government Printing
Office, Washington, D.C. 20402 (202) 512-1800. The subscription price is
$35.00 per year (domestic), $43.75 per year (foreign).
No single copies are sOld.
DEPARTMENT
OF
THE
TREASURY
NEWS
rIREASURY
omCE OF PUBUC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.• 20220. (202) 622-2960
For Release Upon Delivery
Expected at 11:00 a.m.
1uly 25, 1994
STATEMENT OF
LESLIE B. SAMUELS
ASSISTANT SECRETARY (TAX POlleY)
DEPARTMENT OF THE TREASURY
BEFORETBE
HOUSE COMMITTEE ON WAYS AND MEANS
Mr. Chairman and Members of the Committee:
I am pleased to be here today to discuss the Ac1minist:ration's proposals for funding
the reauthorization and amendment of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA) contained in the Superfund Reform Act
of 1994 (H.R. 3800). CERCLA created the Superfund program, which is the Federal
government's primary program for addressing dangerous environmental and health conditions
created by the release of hazardous substances into the environment
Before describing the specific financing elements connected with the Administration's
proposal and the rationale behind them, I would like to give a brief overview of the
Superfund reform legislation and the state of affairs under current law.
CURRENT LAW
Syperfund Trust Fund
CERCLA provides the Federal government with the authority to respond to and clean
up releases of hazardous substances into the environment Under CERCLA, the
Environmental Protection Agency (EPA) has two tools for cleaning up hazardous waste sites.
First, EPA can take legal action to force responsible parties to clean up contaminated sites or
to reimburse the Federal government for the cost of the cleanup. Second, EPA can use
funds in the Hazardous Substance Superfund trust fund to finance the cleanup of hazardous
LB - 965
waste sites where a responsible party cannot be found or is not financially viable (otphaned
sites). The trust fund can also be tapped to expedite the cleanup of other sites where costs
will ultimately be recovered from potentially responsible parties (PRPs).
The Superfund trust fund is currently financed primarily by excise taxes on domestic
crude oil, imported petroleum products, certain chemicals and imported derivative products,
a corporate environmental tax, and annual appropriations from general revenues. More
specifically, the trust fund is financed by the following taxes: (1) an excise tax on crude oil
and imported petroleum products equal to 9.7 cents per barrel for domestic crude oil
received at a United States refinery or exported, on imported crude oil, and imported
petroleum products entered into the United States for consumption, use, or warehousing; (2)
excise taxes imposed on listed chemicals sold domestically or used by the manufacturer,
producer, or importer of the listed chemicals at rates ranging from 50.22 to $4.87 per ton;
(3) excise taxes on certain imported derivative products generally at rates applicable to
taxable chemicals used as materials in the manufacture of the imported substances; and (4)
the corporate environmental tax equal to 0.12 percent of modified alternative minimum
taxable income in excess of 52 million.
These taxes are scheduled to expire on December 31, 1995. However, the taxes may
terminate earlier if amounts in the Superfund trust fund reach certain levels. The Superfund
taxes may expire before January 1, 1996 if (1) on December 31, 1994, the unobligated
balance in the Superfund exceeds 53.5 billion and will exceed 53.5 billion at the end of the
following year if no Superfund taxes were imposed during the year, or (2) if the amount of
cumulative Superfund taxes collected exceeds 511.97 billion.
The Superfund taxes provide an adequate and stable source of funds for the trust fund.
In enacting CERCLA, Congress decided that the cleanup costs inCUIIed by the Federal
government where a private party could not be identified or was not financially viable should
be paid by current producers and users of hazardous substances. By taxing the materials
used to make hazardous products and waste, these costs would be borne by persons
producing or using hazardous materials. Accordingly, Congress enacted the excise taxes on
petroleum and chemicals.
Under the Superfund Amendments and Reauthorization Act of 1986, Congress
decided to expand the Superfund financing sources to include the corporate environmental
tax. The addition of this broad-based funding source reflected the view that the production
and use of hazardous substances and the benefits from cleanup were widely dispersed.
Litiption
CERCLA imposes liability for cleanup costs on current owners and operators of
disposal sites, owners and operators at the time of a release, and generators and transporters
of hazardous substances. Responsible parties are SUbject to strict, joint, and several liability
standards with respect to costs associated with the removal and cleanup of hazardous
2
substances. This liability system currently generates a significant amount of litigation for
recoveries between EPA and PRPs (enforcement litigation), between initially identified PRPs
and other PRPs (contribution litigation), and PRPs and their insurers (insurance litigation).
As a result, litigation costs have been and continue to be significant.
Insurers that wrote commercial liability and comprehensive general liability coverage
prior to January 1, 1986 sometimes have to pay claims related to a policyholder's liability for
cleanup costs, either because the insurance contracts specifically included coverage for
environmental liability losses or the judicial system determines that the insurer is liable under
the terms of the insurance contract for cleanup costs incurred by the policyholder. The costs
incurred by PRPs and insurers in insurance litigation are significant. That money would be
better spent cleaning up hazardous waste sites.
OVERVIEW OF PROPOSED LEGISLATION
Syperfund Trust Fund
H.R. 3800 contains reform initiatives that fulfill the Administration's commitment to
protecting human health and the environment and to making Superfund cleanups faster,
fairer, and more efficient. It is our belief that the provisions of H.R. 3800 provide an
adequate, stable, and equitable financial base for the Superfund.
H.R. 3800 would reauthorize the Superfund program at $9.6 billion for the five year
period beginning October 1, 1994 and ending September 30, 1999. The legislation would
extend the existing Superfund taxes for five years and would authorize the present level of
appropriations from general revenues for the Superfund ($250 million per year for FY 1995
through FY 1999).
The present excise taxes and the corporate environmental tax would be extended until
December 31, 2000. No changes are proposed in the present tax rates or taxable substances.
However, subsequent to the introduction of the bill we transmitted certain technical
amendments that would increase the ceiling on total Superfund taxes that can be collected
without causing the taxes to cease from $11.97 billion to $22 billion. This increase in the
ceiling should permit the reauthorized taxes to be collected; otherwise the taxes could
terminate prematurely when the lower ceiling is hit.
Title VIII of H.R. 3800 is designed to reduce the costly litigation between potentially
responsible parties (PRPs) and their insurers. A new Environmental Insurance Resolution
Fund (EIRF) would be established with the objective of facilitating settlement of the vast
majority of litigation involving insurance claims related to Superfund or environmental
liability.
3
Under present law, protracted disputes between insurance companies and their
policyholders regarding the applicability of coverage to liability under CERCLA are a major
source of litigation related to Superfund. The legislation will reduce this litigation and allow
monies that would otherwise be spent in adversarial proceedings to be used for cleanup.
The EIRF would make a single, comprehensive offer to each eligible responsible
party to resolve all pending and future claims of the policyholder against its insurers arising
under the Superfund law for eligible costs of the policyholder. A policyholder that accepted
the EIRF's offer would be reimbursed at a fixed percentage of its eligible costs and would be
required to waive all current and future CERCLA-related claims against its insurers. If a
policyholder rejects the EIRF's offer, the EIRF would reimburse insurers for litigation costs
and judgement amounts associated with any litigation brought by that policyholder, up to the
amount of the offer.
The EIRF would be financed by fees and assessments imposed on insurance
companies. The Administration's funding proposal for the EIRF is designed to raise $3.1
billion over five years, consistent with the terms of the Administration's original reform
proposal. Apart from H.R. 3800, the Administration separately transmitted the statutory
language for these fees and assessments which would become part of Title IX of H.R. 3800.
In H.R. 3800, the term of the reform proposal was extended beyond five years.
Now, I would like to describe the Administration's proposed financing mechanism for
the EIRF and the rationale behind it.
OVERVIEW OF ENVIRONMENTAL INSURANCE RESOLUTION REFORM FUNDING
The EIRF would make and fund settlement offers with certain policyholders. It
would serve to streamline and facilitate settlements for litigation between two private parties-an insurer and its policyholder. The parties to this environmental insurance resolution
reform directly benefit from the reform. Accordingly, insurers and their policyholders
should finance the environmental insurance resolution reform.
On this basis, we developed three guiding principles that serve as the foundation for
the Administration's financing proposal for the EIRF. Once you understand the principles
upon which we developed the financing mechanism, the mechanism itself becomes more
easily understood.
The fundamental principles are: (1) insurers that benefit from the environmental
insurance resolution reform-those that have potential Superfund liabilities through
commercial insurance coverage written in the past-should provide most of the EIRF's
funding; (2) commercial insurance industry as a whole, its policyholders, and society also
will benefit from the reform and should pay some portion of the EIRF's funding; and (3) all
commercial insurers and reinsurers, whether domestic or foreign, that insure risks in the
United States benefit from the reform and should participate in its funding.
4
Consistent with the first principle that insurers that benefit from reform should pay
for reform, under the Administration's proposal, approximately 70 percent of the financing
for the EIRF would be paid by those insurance companies that wrote certain commercial
liability coverage in the past. An "environmental insurance resolution fee" or "retrospective
fee" would be imposed on net premiums written by domestic and foreign insurers and
reinsurers for contracts insuring certain U.S. commercial liability risk during the period from
1971 through 1985.
We believe that the base period of 1971 through 1985 is a reasonable way to approach
the determination of the retrospective fee base. Any insurer or reinsurer that wrote coverage
for losses arising from comprehensive general liability or commercial multiperilliability risks
situated in the United States prior to January 1, 1986 has potential exposure to environmental
liability claims as policyholders discover that they are PRPs. This exposure generally ceased
beginning January 1, 1986, because insurers began including in their insurance contracts a
specific exclusion for coverage of claims related to environmental liability. For coverage
written prior to 1986, we could not look back indefinitely. Publicly available data prior to
1971 are less reliable and so the base period for determining this retrospective fee would
begin in 1971.
Consistent with the second principle that the entire insurance industry, policyholders,
and society benefit from reform, approximately 30 percent of the EIRF's funds would be
paid based on commercial insurance to be written and purchased in the future. Under the
proposal, this 30 percent of the EIRF would be funded through an "environmental resolution
insurance assessment" or "prospective fee" on premiums from certain commercial insurance
of U.S. risks currently written by domestic and foreign insurers. Reinsurers would not
require a direct assessment because insurers would reflect their assessments in pricing
adjustments in reinsurance contracts.
A fee imposed on future premiums written by insurers of commercial liability
coverage· has merit in funding a portion of the EIRF. The health of the industry would be
improved by environmental insurance resolution reform and the potential for state guaranty
fund involvement would be reduced. If insurance companies liable for environmental claims
become insolvent, State guaranty funds can assess solvent insurers to pay outstanding
policyholder claims of insolvent insurers. Thus, all commercial insurers (and their
policyholders) may ultimately benefit from the proposed reform, regardless of whether an
insurer wrote coverage that directly generates environmental exposure. Also, given the
likelihood that a substantial part of fees on future premiums being passed through to
policyholders in pricing, the fee is borne more generally by consumers of the insurance
coverage. For these reasons, a portion of the financing should be provided by insurers
writing commercial coverage today.
Consistent with the third principle, that all insurers and reinsurers should participate
in the EIRF funding, the Administration's proposal requires foreign insurers and reinsurers to
5
contribute their fair share. Foreign insurers and reinsurers that are currently subject to netbasis U.S. income taxation would pay the retrospective fee on the same basis as would
domestic insurers and reinsurers. Alien insurers and reinsurers ~, foreign insurers that
are not subject to net-basis U.S. income taxation) would be required to participate in the
EIRF funding in a different manner. To ensure that alien insurers and reinsurers contribute
to the EIRF, their U.S. insurance contracts would be subject to a prospective fee, collected
by a U.S. withholding agent, in lieu of the retrospective fee. Alternatively, an alien insurer
or reinsurer could elect to be subject to the retrospective fee by entering into a closing
agreement with the Internal Revenue Service.
Both foreign and alien insurers would pay the prospective fee imposed on future
commercial insurance premiums on the same basis as domestic insurers. In the case of alien
insurers, that fee would be collected by a U.S. withholding agent.
FUNDING SPECIFICS OF ENVIRONMENTAL INSURANCE RESOLUTION REFORM
Environmental Insurance Resolution Fee (Retrospective Fee)
The retrospective fee is designed to raise $2.17 billion or 70% of the funding during
the first five years of the EIRF. It would be determined by multiplying a fee funding rate by
the adjusted base-period commercial premiums written for contracts or agreements providing
insurance and reinsurance with respect to qualified commercial coverage of U.S. risks during
the period beginning January 1, 1971, and ending on December 31, 1985. The proposed fee
funding rate would be 0.20 percent for the first two years and .27 percent for the next three
years. The Secretary of the Treasury would have the authority to adjust the rates should
actual collections differ from anticipated collections.
1. Adjusted base-period commercial premiums. In determining the total adjusted
base-period commercial premiums written for 1971 through 1985 to which the funding rate is
applied, the net premiums written for each year during the period for qualified commercial
insurance contracts and reinsurance of qualified commercial insurance coverage would be
adjusted by an inflation factor based on the consumer price index. This inflation adjustment
would restate all premiums written to 1985 dollars so that they are taxed on a comparable
basis.
To provide relief to small insurers and mitigate any mistargeting of the premiums
proxy, $50 million would be excludable from inflation-adjusted base-period commercial
premiums.
2. Net premiums written for qualified commercial insurance contracts. Net
premiums written for qualified commercial insurance contracts means net premiums written
for contracts providing insurance of qualified commercial coverage of U.S. situs risks
generally computed on the basis of the annual statements approved by the National
Association of Insurance Commissioners (NAlC).
6
Qualified commercial coverage means insurance coverage that was, or should have
been, characterized in the NAIC annual statement as "commercial multiple peril" or "other
liability" lines of business. However, contracts included in the "other liability" line of
bUsiness that insured only specific coverages unrelated to general commercial liability, and
thus would not generate exposure to environmental insurance claims, would be excluded.
For example, medical malpractice insurance would be an excludable coverage.
3. Net premiums written for allocated reinSUrance of Qualified commercial coverage.
Premiums related to allocated reinsurance (Le., generally first dollar pro rata reinsurance)
are identified by line of business. Accordingly, net premiums written for allocated
reinsurance of qualified commercial coverage means net premiums written for reinsurance
which were reported (or, in the case of a company not filing an annual statement, would
have been required to be so reported) on the annual statement approved by the NAIC by the
line of business related to the underlying policies covered by such reinsurance, rather than on
the reinsurance line of business of the annual statement.
. 4. Net premiums written for unallocated reinsurance of Qualified commercial
coverage. For certain reinsurance coverage (e.g., reinsurance in excess of a retention by the
ceding company), the reinsurer may not have separately reported net premiums written by
line of business on the annual statement. In addition, the reinsurer often cannot easily
identify or directly trace the type of insurance coverage to which the premiums relate
because several types of insurance coverage could be combined in the reinsurance agreement.
Thus, the net premiums written for this unallocated reinsurance would be determined using a
formula, or proxy approach, based on the insurance industry's ceded premiums for qualified
commercial coverage from January 1, 1971, through December 31, 1985.
To derive the net premiums written related to unallocated reinsurance of qualified
commercial coverage, a reinsurance ratio of 21 percent (or otherwise as determined by the
Secretary) would be multiplied by the net premiums written, as reported on the NAIC annual
statement (or equivalent computational basis if an NAIC annual statement was not prepared)
for the reinsurance line of business.
5. Foreign insurers and reinsurers. Foreign persons (including foreign companies,
partnerships, trusts, and estates and nonresident alien individuals) that insure or reinsure u.S.
risks would be subject to the retrospective fee if they are currently engaged in any trade or
business within the United States and their taxable income that is effectively connected with
that trade or business is subject to net-basis U.S. income taxation and is not exempt by treaty
from such taxation. The retrospective fee would be computed in the same manner as for
U.S. insurers and reinsurers.
All other foreign insurers and reinsurers ("alien insurers and reinsurers") would be
subject to a prospective withholding fee in lieu of the retrospective fee, unless they elect to
be subject to the retrospective fee instead. This prospective withholding fee would be
imposed at a rate of 0.50 percent of the maximum limit of liability on each policy of casualty
7
insurance covering U. S. risks and on each policy of reinsurance with respect to such an
insurance policy. The fee would be imposed on all lines of casualty business, broadly
defined, to prevent alien insurers and reinsurers from avoiding the fee simply by ceasing to
write qualified commercial insurance coverage in the United States. The fee would be
withheld and remitted to the Internal Revenue Service by the U.S. premium payor or other
U.S. withholding agent.
Alternatively, alien insurers and reinsurers could elect to be subject to the
retrospective fee. If such an election were made, the retrospective fee would apply in the
same manner as it applies to U.S. insurers and reinsurers (and to other foreign insurers and
reinsurers). Electing aliens would be required to enter into a closing agreement with the
Internal Revenue Service to ensure collection of the retrospective fee.
6. Exemptions. A company would not have a liability for the environmental
insurance resolution fee if it had no more than $50 million of total net premiums written,
adjusted for inflation, from January 1, 1971 through December 31, 1985 for qualified
commercial coverage. In addition, companies that could demonstrate to the IRS that they
have no potential exposure to claims for environmental liability based on the type of "other
liability" insurance contracts written or reinsured during 1971 through 1985 (such as medical
malpractice and insurance agents' and brokers' liability risks) would not be subject to the fee.
This demonstration does not relate to whether the insurer believes that its commercial
liability insurance contracts excluded coverage of environmental liabilities.
7. Subsequent adjustment of factors. Any adjustments to the funding rate or the
reinsurance ratio would be applied prospectively in the computation of a company's EIRF.
Adjustments may be required because of the uncertain application of the premium and
coverage exclusions, or because of insufficient collections due to other unanticipated factors.
8. Corporate reorganizations. Special rules designed to prevent erosion of the
retrospective fee base are also provided to ensure that the fee follows the commercial
insurance business of a company in any corporate reorganization involving an acquisition or
disposition of all, or a part, of a company's commercial insurance business. Rules also
address movement of the fee in assumption reinsurance transactions.
If after December 31, 1985, but prior to February 2, 1994, an insurer disposed of
qualified commercial policies, through an assumption reinsurance transaction whereby the
reinsurer became directly liable to policyholders on the contracts transferred, the insurer
would be permitted to reduce its commercial net premiums for purposes of computing the
retrospective fee. The amount of reduction would equal the commercial net premiums
generated from 1971 through 1985 by the related to the transferred insurance business,
provided that the insurer reports the amount of such commercial net premiums to the
reinsurer and the reinsurer includes such premiums in its base-period premiums.
8
Any reinsurance of qualified commercial policies on or after February 2, 1994, and
any reinsurance of qualified commercial policies after December 31, 1985, and before
February 2, 1994, other than that just described, would be disregarded for purposes of
computing the retrospective fee.
If after January 1, 1971 but prior to February 2, 1994, a reinsurance agreement
covering qualified commercial policies was terminated in accordance with a commutation
agreement whereby the reinsurer is no longer liable for any potential claim under the
contract, the reinsurer would be permitted to reduce its commercial net premiums for
purposes of computing the fee. The amount of reduction would equal the commercial net
premiums generated from 1971 through 1985 by the reinsured insurance business, provided
that the reinsurer reports the amount of such commercial net premiums to the ceding person
and the ceding person includes such premiums in its base-period premiums.
Any reinsurance (other than reinsurance that was commuted) during the base period
from 1971 through 1985 would generally not require separate adjustment. The premiums
related to such reinsurance would be reflected in the annual statement so that both the ceding
and assuming person's commercial net premiums would adjust automatically.
B. Environmental Insurance Resolution Assessment (Prospective Fee)
The prospective fee is designed to raise $.93 billion or 30% of the funding during the
first five years of the EIRF. It would be determined by multiplying an assessment funding
rate of 0.34 percent for the first 2 years, and 0.44 percent for the following 3 years, by an
insurer's direct premiums written for commercial insurance contracts. The Secretary could
adjust the rates should actual assessment collections differ from those anticipated.
The assessment would apply in the same manner with respect to commercial insurance
contracts written by foreign insurers of U.S. risks. It would be collected through
withholding in the case of alien insurers.
Direct premiums written for commercial insurance contracts means gross premiums
written and other consideration for contracts providing insurance of commercial coverage.
Gross premiums written would be computed on the basis of the annual statement approved by
the NAIC or on an equivalent basis.
Commercial coverage means insurance coverage that is, or would be categorized in
the NAIC annual statement as "commercial multiple peril," "fire," "product liability," or
"other liability" lines of business. However, contracts that insure only certain types of
coverage unrelated to commercial liability included in the "product liability" or "other
liability" lines of business would be excludable.
9
This fee would be imposed directly on primary insurers. We anticipate that the
primary insurers would attempt to adjust reinsurance premiums to recoup this fee as
reinsurers would pay the fee to the primary insurers as part of their reinsurance premiums.
c.
Tax Exemption
The EIRF would be exempt from Federal income tax under Section 501.
Summary
To summarize the policy rationale, the Administration's funding proposal for the
EIRF satisfies the three prinCiples discussed earlier. It would require insurers that would
benefit the most from the environmental insurance resolution to provide 70 percent of the
funding. This 70 percent of the funding would be obtained from a "retrospective" fee
imposed on premiums from commercial insurance written in the past-the policies with
potential environmental liability exposure. Since it is not possible to target this fee precisely
at those insurers with actual environmental liability exposure, the proposal provides relief by
providing an exclusion for $50 million of premiums, and an exclusion for certain types of
coverage that have no potential exposure to environmental liability claims.
Insurers are unlikely to be able to adjust fully the prices charged to policyholders to
pass through the retrospective fee. Since the property/casualty insurance market is
competitive and insurers provide essentially the same product, the market price for new
policies will be determined by insurers that are not subject to the retrospective fee. The
retrospective fee will likely reduce profits of insurers subject to the fee and be borne largely
by their current shareholders, who also bear the cost of environmental liability claims and
litigation costs associated with these claims.
A smaller portion (30 percent) of the funding is more broadly based and is obtained
from a "prospective" assessment on future commercial insurance business. Since all
commercial insurance business would be subject to this fee, the fee would be likely included
in the prices charged to commercial policyholders, and ultimately, in prices charged to their
consumers. This result is appropriate because those policyholders and society generally
benefit from the reform and the improved financial health of the insurance industry that
would result from the proposed reform.
The proposal would provide that both insurers and reinsurers pay the fee. Reinsurers
would compute the retrospective fee on the same basis as primary insurers. The prospective
fee is imposed directly on primary insurers; however, primary insurers would likely adjust
insurance premiums to reflect the prospective fee. Thus, reinsurers will pay the fee to the
primary insurers though premium adjustments and the primary insurers would pay the fee to
the government directly.
10
The proposal would also ensure that foreign insurers and reinsurers that benefit from
the proposed reform participate in its funding. The only way a foreign insurer could avoid
providing funds for the EIRF would be for the insurer to cease writing all types of
property/casualty insurance coverage in the United States. We believe that this is highly
unlikely, given the importance of the U.S. market.
CONCLUSION
There is considerable disagreement within the insurance industry about how the
funding for the EIRF should be structured. Some insurers argue that the funding mechanism
should be entirely retrospective, i. e., based on commercial insurance business written in the
past. Others argue that the funding should be entirely prospective, i.e., based on commercial
insurance business written in the future. We believe that our proposal is one reasonable way
to strike a balance between those opposing views-70 percent from a retrospective fee and 30
percent from a prospective fee. Moreover, the proposal provides for a stable and predictable
revenue source which is not likely to erode over time.
The Congress may wish to work with representatives of the industry to design a
different financing mechanism for the EIRF and its extended term. We believe that passing
the Superfund reauthorization legislation this year is crucial. Provided that the EIRF is
adequately funded over its term, we do not want the proposed 70 percent/30 percent funding
split for the EIRF to stand in the way of the goal of reducing wasteful litigation.
Mr. Chairman, thank you for the opportunity to address this Committee. I will be
pleased to answer any questions you or other members of the Committee may have.
11
DEPARTMENT
OF
THE
TREASURY
NIi-,WS
TREASURY
omCE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR RELEASE
July 25, 1994
Contact: Rebecca Lowenthal
(202) 622-2960
TREASURY TO BRING PROCUREMENT OPPORTUNITIES TO LOS ANGELES AREA
The U. S. Department of the Treasury will hold a conference for small, minority and
women-owned businesses in Los Angeles, CA on August 23 and 24, 1994.
The two-day event -- "PARTNERSHIPS '94 Los Angeles -- is designed to encourage
dialogue and increase those businesses' procurement opportunities with Treasury and other
federal agencies.
This is the second such conference this year. The fIrst PARTNERSHIPS '94, held in
Washington D.C., attracted over 1,300 people and offered up to $3 million in procurement
opportunities for which participants could submit bids during the day.
Representatives from all 12 bureaus of the Treasury Department will
participate in the conference, including procurement and program staff from the Customs
Service, Bureau of Alcohol, Tobacco and Firearms, Internal Revenue Service, Comptroller
of the Currency and Bureau of Engraving and Printing, all of which have offices in the
Western u.S.
"Throughout its history, Treasury has been the leader in fostering our nation's
economic development," Treasury Secretary Lloyd Bentsen said. "One of our top priorities
is assisting small, minority and women-owned businesses in fulfIlling our mission to
stimulate the economy and create jobs for our citizens. This expansion initiative, and
PARTNERSHIPS '94, are important components of that broader mission."
Up to $1 million worth of Treasury contracts will be available for quotation.
Companies may submit bids prior to or during the conference, with review and notification
of bid awards within ten days after the conference. Diverse bid opportunities will include
services such as communications and building maintenance and goods such as computer and
office equipment.
(MORE)
LB-966
-2-
The conference's focus will be on accessibility to contract information, particularly
through the use of electronic commerce to interact with Treasury and other agencies. The
Defense Logistics Agency will offer one-hour training classes and demonstrations
for participants on how businesses can use electronic commerce to improve the efficiency of
their relationships with federal government and get the specialized information they need.
Together, Treasury bureaus offer more than $ 1.5 billion in contract opportunities each year.
In keeping with Vice President Gore's commitment to reducing paperwork at all
levels of government, Treasury seeks to expand its use of the purchase card, a Visa charge
card that allows program and administrative staff to make purchases on the spot. The card
eliminates paperwork that can delay payment to businesses. Banks have been invited to teach
interested businesses how to sign up as merchants accepting the card, and to allow them to
shop around for the best rates.
"I want businesses to know that Treasury cares about small, minority and womenowned businesses," Treasury Assistant Secretary for Management George Munoz said. "We
need to show that we know how to use technology to facilitate our information giving, and to
help people gain access to the technology they need to compete. The success of the first
conference shows that when we extend the opportunity to do business with the federal
government, people respond."
To receive a registration packet, interested businesses can call 1-800-871-2897.
Registration information and forms are also available on an interactive fax line by calling
202-622-1133. A list of procurement opportunities available to small,minority and womenowned businesses and procedures for submitting a bid are available through the same system
and will be updated frequently prior to the conference.
-30-
DEPARTMENT
OF
lREASURY
OFFICE OF PUBUC AFFAIRS. 1500 no.,,,,,,,,,'.,,
THE
TREASURY
NEWS
. N.W.• WASHINGTON, D.C .• 20220 • (202) 622-2960
For Release Upon Delivery
Expected at 11:00 a.m.
July 25,1994
STATEMENT OF ALICIA H. MUNNELL
AsSISTANT SECRETARY FOR ECONOMIC POLICY
DEPARTMENT OF THE TREASURY
BEFORE THE COMMITTEE ON WAYS AND MEANs
U.S. HOUSE OF REPRESENTATIVES
JULY 25, 1994
Mr. Chairman and Members of the Committee:
I appreciate the opportunity to appear before you today. Before Assistant
Secretary Samuels discusses the specific funding proposals that are the subject of
today's hearings, some background information on the broadest subject of
Superfund reform might be useful. Superfund-the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA)-was enacted in 1980 in
response to public outcry over Love Canal, Valley of the Drums, and other
environmental disasters. The original vision was that the program would involve
relatively inexpensive clean-ups of a few hundred sites. Actual events have turned
out to be quite different. Currently, EPA has roughly 1,300 sites on the national
priority list. Most observers envision an eventual number of at least 3,000 and cost
estimates are running as high as $150 to $300 billion.
Major problems with the program are that fewer than 20 percent of the
identified priority sites have been cleaned-up to date and for every dollar spent,
more than 25 percent goes to lawyers and transaction costs. The incentives in the
system are all wrong. They lead to pressure for Cadillac-type clean-ups and endless
wrangling over who's going to pay and how much. The current system is in
desperate need of reform. The wisest observation that I have heard so far in the
reform process is that if parties believed they were being allocated their fair share
of clean-up costs and they had confidence that their money would be wisely spent at
LB - 9§L
-2clean-up sites, the litigation would end and the clean-up would start. Fair
allocation of liability and reasonable clean-up standards comprise the centerpiece of
the Administration's Superfund reform proposal.
First, a brief word about the new clean-up standards. A more coherent
procedure for determining how to clean-up sites will not only protect human health
and the environment- something that is obviously paramount to all of us- but
will also save money. New standards will take account of land use; it will no longer
be necessary to clean up a site so that children can eat dirt at the site if the land is
going to be used for a factory. The new system will also move away from a
preference for treatment; it will no longer be assumed that burning the dirt is
always preferable to reliably precluding access to a site. Finally, costs will be
considered when selecting among alternative remedies. Our hope and expectation
is that costs will be reduced by 20 to 25 percent by making better decisions on
clean-up strategies.
Next is the crucial issue of liability: Who should pay for the cost of clean-up
and how much should they pay? The transaction costs associated with clean-ups,
especially litigation expenses, have been massive under current law. The litigation
takes three forms: First, PRPs (potentially responsible party) identified by EPA
under the law's strict, joint and several, and retroactive liability provisions, will
strongly resist, because they can be held responsible for the entire cost of cleaning
up a site. Second, a targeted PRP will go out and sue anyone else who, either
plausibly or implausibly, could share that burden. Third, all PRPs try to recover
their Superfund costs from their insurance companies.
To address the first two types of litigation, the bill establishes a more
reasonable mechanism for allocating costs among parties. The bill provides for
early settlement for small contributors, generators and transporters of municipal
solid waste, and parties with limited ability to pay. Under these provisions, most
small businesses will be out early and without great expense. The bill also
establishes a process for allocating shares of all remaining PRPs at a site in a single
proceeding. In this process, the remaining PRPs will sit at a table, and a mediator
will allocate liability based on factors such as the volume and toxicity of their
waste. Parties who accept the allocation will be protected from suits by other PRPs;
benefit from EPA's funding of orphan shares-shares established in either the early
settlement process or attributable to insolvent parties; and, for a fee, be protected
from future liability for remedy failure or some undiscovered harm. Under these
provisions, the large businesses that run most of the clean-ups will be treated much
more fairly.
Getting-at last-to the subject under consideration, the Administration
proposal also addresses the growing problem of Superfund-related insurance
litigation. When a party is hit with clean-up costs under Superfund and seeks
recovery from its insurance company, the insurance company says that its policies
were not written to cover Superfund costs. The dispute is inevitably expensive to
-3resolve. Some courts have found for the PRPs, some for the insurers; it varies
significantly by state.
In January, the Administration began working with representatives from
insurance and industry to fashion a proposal that would avoid much of this
litigation. The product was the creation of an Environmental Insurance Resolution
Fund that would be financed by fees and assessments on property and casualty
insurers and reinsurers.
Although the plan has been revised as the bill has progressed, the essence of
the plan is this: when PRPs emerge from the allocation process, they will walk over
to the Resolution Fund window, where they will receive a settlement offer based on
the location and litigation venue of all of their sites. Companies with sites and
venues only in California and seven other states would be offered 60 cents on the
dollar; those with sites only in Florida and seven other states 20 cents on the dollar.
Those with all of their sites in the remaining states would fall into the 40 percent
category. So that they cannot cherrypick, PRPs would be required to make a
decision for all their sites at the time of the Resolution Fund's offer. If their sites
and litigation venues fall into more than one of the three tiers of states, their
recovery rate will be an appropriate blend of the three rates. Finally, PRPs
accepting the offer will waive their right to sue their insurance companies for
eligible costs.
The original plan was structured for a five-year period and involved fees on
the insurance industry of up to $3.1 billion dollars. Treasury spent a lot of time
worrying about how to structure these fees. As you know, our proposal is to raise 70
percent of the funding through a retrospective environmental insurance resolution
fee on net premiums on certain types of policies written by domestic and foreign
insurers and reinsurers between 1971 and 1985. The other 30 percent would be
financed by a prospective assessment on premiums from certain types of commercial
insurance. Assistant Secretary Samuels will describe these issues in more detail in
a moment. We at Treasury obviously think that our proposal strikes a logical
balance between retrospective and prospective fees. However, we are also firmly
committed to realizing the benefits of all of the facets of Superfund reform, and we
do not believe that the particular financing provisions for the Resolution Fund
should be an obstacle to passing Superfund reform.
To conclude, no one is happy with every aspect of the proposed Superfund
Reauthorization Bill. No one wants to have to invest scarce resources to clean up
problems left over from the past, but it has to be done, not only because Superfund
sites are a health hazard, but because they are also an economic hazard. These
sites need to be cleaned up and redeveloped so that they can add to the well-being
of the communities in which they are located, not subtract. We have spent an
enormous amount of time and effort trying to reach appropriate compromises on
difficult and delicate issues. The time has now come to get on with the business of
actually passing Superfund reauthorization. The proposed bill makes great strides
in addressing the shortcomings of the current system. That is why the
-4Administration is happy to support it and, even more important, why it has
received such widespread support from those with an important stake in Superfund
reform.
UBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
July 25, 1994
CONTACT: Office of Financing
202-219-3350
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Tenders for $12,572 million of 13-week bills to be issued
July 28, 1994 and to mature October 27, 1994 were
accepted today (CUSIP: 912794N75).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average
Discount
Rate
4.41%
4.43%
4.43%
Investment
Rate
4.52%
4.54%
4.54%
Price
98.885
98.880
98.880
$10,000 was accepted at lower yields.
Tenders at the high discount rate were allotted 34%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
$53,342,437
Acce:gted
$12,571,841
$48,017,002
1.165.135
$49,182,137
$7,246,406
1.165.135
$8,411,541
2,960,900
2,960,900
1.129.400
$53,342,437
1. 19~L 40Q
$12,571,841
R~c~ived
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
4.37
LB-968
98.895
4.42
98.883
UBLIC DEBT NEWS
Department of the Treasury •
Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
July 25, 1994
CONTACT: Office of Financing
202-219-3350
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Tenders for $12,561 million of 26-week bills to be issued
July 28, 1994 and to mature January 26, 1995 were
accepted today (CUSIP: 912794Q23).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average
Discount
Rate
4.82%
4.83%
4.83%
Investment
Rate
5.01%
5.02%
5.02%
Price
97.563
97.558
97.558
Tenders at the high discount rate were allotted 25%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
LB-969
Received
$54,527,049
Accegted
$12,561,283
$48,163,765
1 1 158 1 584
$49,322,349
$6,197,999
1 1 158 1 584
$7,356,583
3,150,000
3,150,000
2 1 054 1 700
$54,527,049
2 1 054 1 700
$12,561,283
NEWS
OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.• 20220. (202) 622-2960
July 25, 1994
STATEl\1ENT OF ROGER C. ALTMAN
DEPUTY SECRETARY OF THE TREASURY
I want to respond to recent press reports on my role in the Madison/Whitewater matter. After
this opening statement, I will respond to all of your questions.
First, we know from Mr. Fiske's report that nothing unlawful has been done. And, to the best
of my knowledge, everyone in the Treasury acted in an ethical fashion.
Second, my testimony before the Senate Banking Committee was wholly accurate. When I
appeared before the Senate Banking Committee on February 24, 1994, I testified to the one
substantive contact of which I was aware of at that time.
Questions have recently been raised as to whether Ms. Hanson, Treasury General Counsel, has
indicated in testimony before congressional lawyers that I asked her to brief the White House
last Fall. In tum, that has raised questions as to whether I knew of the Fall meetings and
testified accurately in February.
My testimony was correct. I have no recollection of asking Ms. Hanson to brief the White
House. There is nothing unusual for recollections to differ. The events in question occurred
five months before my testimony.
I know that she has a different recollection. I just disagree.
The key point is that we're talking about a press leak. That is the information which I
understand that she provided. There's nothing wrong with that.
LB-970
Third, there were also questions raised this weekend as to whether Mr. William Roelle, formerly
of the RTC, advised me in March 1993 of a possible criminal referral.
I firmly believe that he did not do so. That is my recollection.
Fourth , there have been thousands of words written to the effect that I briefed the White House
on the Madison investigation on February 2. Or, putting it another way, that I discussed the
status of the case.
This is untrue. I have never known the substance of the case and don't know it today. It would
have been impossible for me to convey such information, and I did not do so. Cases and/or
investigations by the RTC are handled at the regional level or by the General Counsel, but never
by the CEO, and I had advised Ms. Ellen Kulka and Mr. Roelle that the same procedures were
to be followed in this case.
On February 2, we provided generic information on procedures which the RTC follows on any
statute of limitations situation, and would follow on Madison. This same generic information
had been provided beforehand to representatives of the Congress and the media, upon request.
It was in the public domain, and properly so. There was nothing inappropriate in providing that
same information to the White House.
Finally, let me address myself to the questions on recusal. I did recuse myself on February 25
and, prior to that date, had no involvement in any decisions on Madison.
Prior to that, I was de facto recused. Before February 2, I had advised Ms. Ellen Kulka, RTC
General Counsel, that all decisions relating to this case, as with all RTC cases, would be her
responsibility, not mine. And, I had done so more than once, and in the presence of others.
Indeed, the one decision I made on this case, was not to make any decisions relating to this case.
During the February 2 meeting, I conveyed this exact point to the White House. Namely, that
I had told the RTC General Counsel that she would be making these decisions. The attendees
at that meeting will confirm that.
I also asked for an opinion from the RTC ethics officer and the Treasury ethics officer on this
issue. Both subsequently advised me in writing that recusal was not required, and that in any
event there was no reason to recuse oneself until a particular aspect of the matter is presented
for consideration.
Then, on February 11, Congress extended the statute of limitations on Madison for two
additional years, i.e. through early 1996. This made recusal entirely moot. My term as RTC
Chairman was to expire (and did expire) on March 30 and with the newly extended timetable,
the RTC certainly wouldn't be making any Madison decisions on my watch.
In other words, I was de facto recused before February 2, and the issue became irrelevant nine
days later.
In conclusion, I want to repeat that I never briefed anyone, or instructed anyone else to brief
anyone, on the investigation or the case.. I knew nothing about the case back in February, other
than the fact that the statute of limitations was running out, and I know nothing about the case
today except what I have read in the press.
At a more significant level, I made no decisions and never influenced the direction or the
substance of the Madison case at any time during my tenure at the RTC. And I never imparted
any non-public information about the case to the White House or anyone else.
Now I would be happy to take some questions.
DEPARTMENT
OF
THE
TREASURY
NEWS
Contact: Jon Murchinson
(202) 622-2960
FOR IMMEDIATE RELEASE
July 25, 1994
STATEMENT BY SECRETARY BENTSEN ON BANKING BILLS
I commend the House and Senate conferees for the hard work that has provided
agreement on the Community Development Banking Bill and the Interstate Banking Bill.
This legislation is a result of our deliberate and incremental approach to financial
services legislation. As I outlined last October, we have focused on achievable goals and
picked our targets carefully. The Credit Availability Program, RTC funding bill, and now
Community Development Financial Institutions and Interstate Banking are all concrete steps
towards fueling economic growth by making our banking system more sound and efficient
and credit more available to American consumers and businesses.
These bi11s will increase competition in the financial services industry, make it more
convenient for Americans to do their banking and provide greater access to credit for
businesses and citizens in under served rural and urban areas. In my 30 years in Washington
this has been one of the most productive in terms of financial services legislation. I look
forward to both houses of Congress passing the conference report soon and to President
Clinton signing these bills into law.
-30LB-971
....
DEPARTMENT
OF
THE
TREASURY
. . . .~~/78rq~. . . . . . . . . . . . . ..
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
TRANSCRIPT OF
PRESS BRIEFING BY ROGER C. ALTMAN
DEPUTY SECRETARY OF THE TREASURY
MONDAY, JULY 25, 1994
LB-972
Removal Notice
The item identified below has been removed in accordance with FRASER's policy on handling
sensitive information in digitization projects due to copyright protections.
Citation Information
Document Type: Transcript
Number of Pages Removed: 22
Author(s):
Title:
Press Briefing by Deputy Treasury Secretary Roger C. Altman
Date:
1994-07-25
Journal:
Volume:
Page(s):
URL:
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
UBLIC DEBT NEWS
Departlllt'nt
ur the Treasury
•
Bureau of the Public DFbt • Washington. DC 20239
FOR IMMEDIATE RELEASE
July 26, 1994
rONTACT: Office of Financing
202-219-3350
RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
Tenders for $17,304 million of 2-year notes, Series AJ-1996,
to be issued August 1, 1994 and to mature July 31, 1996
were accepted today (CUSIP: 912827Q54).
The interest rate on the notes will be 6 1/8%. All
competitive tenders at yields lower than 6.17% were accepted in
full.
Tenders at 6.17% were allotted 87%. All noncompetitive and
sucessful competitive bidders were allotted securities at the yield
of 6.17%, with an equivalent price of 99.917. The median yield
was 6.16%; that is, 50% of the amount of accepted competitive bids
were tendered at or below that yield. The low yield was 6.10%;
that is, 5% of the amount of accepted competitive bids were
tendered at or below that yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Received
$46,306,929
Accepted
$17,304,021
The $17,304 million of accepted tenders includes $1,638
million of noncompetitive tenders and $15,666 million of
competitive tenders from the public.
In addition, $1,148 million of
high yield to Federal Reserve Banks
international monetary authorities.
of tenders was also accepted at the
Reserve Banks for their own account
securities.
LB-973
tenders was awarded at the
as agents for foreign and
An additional $827 million
high yield from Federal
in exchange for maturing
DEPARTMENT
OF
THE
---,y,~,
TREASURY
NEWS
~~/78~9~. . . . . . . . . . . . . ..
..........................
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR RELEASE AT 2:30 P.M.
July 26, 1994
CONTACT:
Office of Financing
202/219-3350
TREASURY'S WEEKLY BILL OFFERING
The Treasury will auction two series of Treasury bills
totaling approximately $24,800 million, to be issued August 4,
1994. This offering will provide about $475 million of new cash
for the Treasury, as the maturing bills are outstanding in the
amount of $24,313 million.
Federal Reserve Banks hold $6,159 million of the maturing
bills for their own accounts, which may be refunded within the
offering amount at the weighted average discount rate of accepted
competitive tenders.
Federal Reserve Banks hold $2,164 million as agents for
foreign and international monetary authorities, which may be
refunded within the offering amount at the weighted average
discount rate of accepted competitive tenders. Additional
amounts may be issued for such accounts if the aggregate amount
of new bids exceeds the aggregate amount of maturing bills.
Tenders for the bills will be received at Federal
Reserve Banks and Branches and at the Bureau of the Public
Debt, Washington, D. C.
This offering of Treasury securities
is governed by the terms and conditions set forth in the Uniform
Offering Circular (31 CFR Part 356) for the sale and issue by the
Treasury to the public of marketable Treasury bills, notes, and
bonds.
Details about each of the new securities are given in the
attached offering highlights.
000
Attachment
LB - 974
HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS
TO BE ISSUED AUGUST 4, 1994
July 26, 1994
Offering Amount .
$12,400 million
$12,400 million
Description of Offering:
Term and type of security
CUSIP number
Auction date
Issue date
Maturity date
Original issue date
Currently outstanding
Minimum bid amount
Multiples .
91-day bill
912794 N8 3
August 1, 1994
August 4, 1994
November 3, 1994
May 5, 1994
$11,648 million
$10,000
$ 1,000
182-day bill
912794 Q3 1
August 1, 1994
August 4, 1994
February 2, 1995
August 4, 1994
$10,000
$ 1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids
Competitive bids
Accepted in full up to $1,000,000 at the average
discount rate of accepted competitive bids
(1) Must be expressed as a discount rate with
two decimals, e.g., 7.10%.
(2) Net long position for each bidder must be
reported when the sum of the total bid
amount, at all discount rates, and the net
long position is $2 billion or greater.
(3) Net long position must be determined as of
one half-hour prior to the closing time for
receipt of competitive tenders.
Maximum Recognized Bid
at a Single yield
35% of public offering
Maximum Award .
35% of public offering
Receiot of Tenders:
Noncompetitive tenders
Competitive tenders
Payment Terms .
Prior to 12:00 noon Eastern Daylight Saving time
on auction day
Prior to 1:00 p.m. Eastern Daylight Saving time
on auction day
Full payment with tender or by charge to a funds
account at a Federal Reserve Bank on issue date
UBLIC DEBT NEWS
Departlllcnt of the Treasury •
Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
July 27, 1994
CONTACT: Office of Financing
202-219-3350
RESULTS OF TREASURY'S AUCTION OF 5 YEAR/NOTES
Tenders for $11,014 million of 5-year notes, Series Q-1999,
to be issued August 1, 1994 and to mature July 31, 1999
were accepted today (CUSIP: 912827Q62).
The interest rate on the notes will be 6 7/8%. All
competitive tenders at yields lower than 6.98% were accepted in
full.
Tenders at 6.98% were allotted 56%. All noncompetitive and
sucessful competitive bidders were allotted securities at the yield
of 6.98%, with an equivalent price of 99.563. The median yield
was 6.96%; that is, 50% of the amount of accepted competitive bids
were tendered at or below that yield. The low yield was 6.90%;
that is, 5% of the amount of accepted competitive bids were
tendered at or below that yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Received
$28,163,891
Accepted
$11,013,632
The $11,014 million of accepted tenders includes $785
million of noncompetitive tenders and $10,229 million of
competitive tenders from the public.
In addition, $530 million of tenders was awarded at the
high yield to Federal Reserve Banks as agents for foreign and
international monetary authorities. An additional $800 million
of tenders was also accepted at the high yield from Federal
Reserve Banks for their own account in exchange for maturing
securities.
LB-975
DEPARTMENT
'IREASURY
OF
THE
TREASURY
NEWS
~~178~9~. . . . . . . . . . . . . . . . . . . . . . . . . .1I
..........................
OmCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C •• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
Text as Prepared for Delivery
July 28, 1994
REMARKS OF TREASURY SECRETARY LLOYD BENTSEN
CRIME EVENT AT JUSTICE DEPARTMENT
For four years, I've watched Joe Biden and Jack Brooks work diligently to pass a
crime bill. Mr. President, with your leadership, we're a big step closer. And Mr.
President, I plan to work with Janet Reno, to work with Chairmen Biden and Brooks, to
produce a bill you'll be proud to sign. And the sooner, the better.
I get a little angry sometimes. When you watch television, you think America is a
society of rapists, and stalkers, and drug addicts, and crooks. This bill starts with the
premise that Americans are good, decent people. Do we have some bad apples among
us? You bet. All the money in the world won't stop them. I never met a law
enforcement officer who didn't say they needed more money and more manpower -- and
unfortunately they do.
This is a good bill, because we're spending the money in an appropriate balance
between law enforcement and prevention.
This will help many Treasury enforcement programs. Like cutting down on the
violence in public housing. Or cutting down on credit card and tax fraud. It contains an
assault weapons ban, it includes provisions that will make it possible to do better
background checks on federally licensed gun dealers, it contains a ban on the transfer of
handguns to juveniles and suspected stalkers. On prevention, I look at ATF's GREAT
program, where we instruct local law enforcement agents to teach kids that gangs are
bad for them. I can't tell you how many kids have walked away from gangs because of
the program. We now have $22 million, over six years, to expand it.
One last thing I want to say: I like this bill because there's a partnership here,
between state and local officials, and federal officials. Treasury can't fight crime alone.
Justice can't fight crime alone. The criminals are too smart and have too many weapons.
We have to do it together. That's how we'll make America a safer place for the good
and decent people of this country.
-30LB-976
DEPARTMENT
OF
THE
TREASURY
NEWS
'tREASURY
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622·2960
FOR IMMEDIATE RELEASE
July 28, 1994
Contact: Hamilton Dix
(202) 622-2960
BENTSEN TO RELEASE BRADY LAW STUDY
Treasury Secretary Lloyd Bentsen will release "The Brady Law: The First 100 Days,"
a study showing the initiative's effectiveness, at the Bureau of Alcohol, Tobacco and
Firearms Headquarters building at 2 p.m. Friday, July 29.
Secretary Bentsen will be joined by Police Chief Charles Grover of Prairie Village,
Kansas. Chief Grover will discuss how the Brady law helped alert law enforcement officials
when an accused stalker tried to buy a hand gun.
Secretary Bentsen requested the study from A TF to examine the implementation of the
law and its impact on law enforcement officers, gun buyers and licensed dealers during its
first 100 days, February 28 - June 6, 1994. The study focuses on the following nine cities:
Houston, TX; Louisville, KY; Seattle, WA; Pittsburgh, PA; Providence, RI; Abilene, TX;
Atlanta, GA; Shreveport, LA; and Cleveland, OH.
Treasury, White House, Defense, State Department or Congressional press credentials
are required to gain access to the ATF building, 650 Massachusetts Avenue N.W. Room 3400.
Any journalists without credentials must call ATF Public Affairs at (202) 927-8500 with the
following information: name, organization, date of birth and social security or passport
number.
LB-977
-30-
DEPARTMENT
OF
THE
TREASURY
NEWS
~~/~78~9~. . . . . . . . . . . . . . . . . . . .1I......... .
......
OFFICE OF PUBUCAFFAIRS -1500 PENNSYLVANIAAVENVE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
July 28, 1994
Contact: Hamilton Dix
(202) 622-2960
MEDIA ADVISORY
The release of the study by the Bureau of Alcohol, Tobacco and Firearms, "The Brady
Law: The First 100 Days" originally scheduled for Friday, July 28, has been postponed.
A new date will be announced.
LB-978
-30-
DEPARTMENT
OF
THE
_ - - - -178
e
<)
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960
u.s. ECONOMIC SANCTIONS ON IIAITI
Prepared Statement of
R. Richard Newcomb
Director, Office of Foreign Assets Control
United States Department of the Treasury
before the
Subcommittee on Western Hemisphere Affairs
Committee on Foreign Relations
United States Senate
Washington, D.C.
June 28, 1994
Introduction
Chairman Dodd and members of the Subcommittee, good afternoon. The
Office of Foreign Assets Control of the Treasury Department is responsible for the
implementation and enforcement of economic sanctions programs relying on the President's
powers under the Trading with the Enemy Act, the International Emergency Economic
Powers Act and the United Nations Participation Act with respect to various countries,
including Haiti. In my remarks today, I will discuss the increasingly restrictive economic
sanctions that have been imposed against the de facto regime in Haiti that were recently
augmented on June 21, 1994 by the President's Executive Order 12922.
The Stiffening Sanctions Against Haiti
The U.S. Government has tightened sanctions against the de facto regime and
its supporters through a series of measured, yet increasingly comprehensive actions
contained in eight presidential Executive Orders addressing asset blocking, financing, trade
and transportation restrictions.
At the outset of the Haiti crisis, the President signed Executive Order 12775
on October 4, 1991, blocking property of the de facto regime, its agencies, instrumentalities,
and controlled entities, as well as the legitimate Government of Haiti. Under this standard,
following extensive consultation with the State Department, OFAC designated 83 individuals
and 35 entities as Specially Designated Nationals ("SDNs") of the de facto regime in Haiti
on June 4, 1993.
LB-979
2
Identification as a "Specially Designated National" targets specific individuals and
front companies acting on behalf of Haiti. On October 8, 1991, Executive Order 12779
banned most trade with Haiti. On June 16, 1993, Executive Order 12853 specifically
prohibited the sale and supply of arms and petroleum products to Haiti, and the use of U.S.registered vessels to carry those goods.
Following the failure of the military and police in Haiti to fulfill their
obligations under the July 1993 Governors Island Agreement, President Clinton issued
Executive Order 12872 on October 18, 1993, which expanded the categories of blocked
persons to include those who have: (a) contributed to the obstruction of the Agreement or
the U.N. Mission in Haiti, (b) perpetuated or contributed to the violence in Haiti, or (c)
materially or fmancially supported those activities. Using these criteria, a new SDN list was
published on October 20, 1993, with the names of 41 individuals, categorized as blocked
individuals or entities of Haiti.
The continued intransigence of the de facto regime, particularly the officers
of the Haitian military, in the face of U.N. resolutions to produce a return of democracy to
Haiti, resulted in April, 1994, in the designation of all officers of the Haitian Armed Forces
as blocked individuals. That action has resulted to date in the addition of 550 named
Haitian military officers to the list.
On May 21, 1994, the President issued Executive Order 12917, implementing
a tighter trade ban. Following an additional UN Security Council resolution to deal with
Haitian family members acting on behalf of the blocked individuals to evade the sanctions,
on June 2, 1994, OFAC began identifying as SDNs immediate family members of Haitian
military officers and police, major participants in the coup d'etat of 1991 or in any of the
succeeding illegal governments. We also began listing as blocked persons the members of
the Jonaissant regime and those Haitian legislators who have supported it. On June 10,
1994, Executive Order 12920 prohibited the transfer of funds from or through the U.S. to
Haiti or to or through the U.S. from Haiti. Also on June 10, 1994, the President broadened
the transportation ban by prohibiting future regularly scheduled commercial passenger flights
by U.S. and Haitian air carriers.
Most recently, as a signal of the United States' seriousness and resolve, a
further refinement was made to focus sanctions on those wealthy Haitian mercantile families
who have been instrumental in supporting the de facto regime. Through Executive Order
12922, signed on June 21, 1994, President Clinton blocked the U.S. property of all Haitian
nationals residing in Haiti. While all Haitian nationals residing in Haiti fall within the
Executive Order's blocking provision, we will continue to identify by name those individuals
associated with the business elite who are most likely to have assets within U.S. jurisdiction.
With the latest actions under Executive Order 12922 and the prior Executive Orders, OFAC
has designated a total of 894 blocked individuals and 36 blocked entities of Haiti. More will
be designated soon.
3
In addition to the punitive blocking against the de facto regime and its supporters which was
reconfirmed and amplified by Executive Order 12922, we previously blocked the
Government of Haiti's U.S. property to keep it out of the hands of the de facto regime.
Acting on the foreign policy advice of the Department of State, we have licensed periodic
disbursements from blocked Government of Haiti accounts to fund the diplomatic
operations of the Aristide government both in the United States and abroad.
Blocking, Financial, Trade and Transportation Prohibitions
On June 21, 1994, the President signed Executive Order 12922 blocking all
property and interests in property in the United States or in the possession or control of
U.S. persons of (a) any Haitian national resident in Haiti; or (b) any other person subject
to the previous Haiti Executive Orders and Haitian citizens who are members of their
immediate families. Excluded from this Order is the property of nongovernmental
organizations providing essential humanitarian assistance or conducting refugee and
migration operations in Haiti, as identified by OFAC.
Executive Order 12922 takes the significant step of blocking the property of
Haitian nationals who are owners of the principal Haitian businesses sustaining the de facto
regime in Haiti. This new Executive Order cuts off most business ties between the Haitian
business class and the U.S. business community by blocking the assets of more than 250
prominent Haitian business owners and their families.
Under the Executive Orders, trade and transportation with Haiti have been
restricted. No Haitian goods or services may be imported into the United States, whether
directly or through a third country, with the exception of publications and other
informational materials. No goods, technology, or services may be exported to Haiti from
the United States, either directly or through a third country, other than informational
materials and certain humanitarian exports.
Vessel and air traffic to and from Haiti is also highly regulated. A vessel is
prohibited from entering U.S. ports unless it demonstrates to us that its calls in Haiti were
for transactions consistent with the U.S. and U.N. sanctions programs. In addition, virtually
all flights to or from Haiti are prohibited, including regularly scheduled commercial
passenger flights. The ban on commercial air service between the United States and Haiti
will make visits to the United States for the Haitian business community less frequent and
far more difficult. Cargo and charter flights carrying authorized humanitarian assistance to
Haiti require approval from our office and the United Nations.
4
Humanitarian Aid
One of the most important elements of the Haiti program is the maintenance
of an effective humanitarian assistance strategy. While we wish to administer a forceful
sanctions program, we will never lose sight of the humanitarian needs of the Haitian people
and we will attempt to ensure that humanitarian goods will continue to flow. The
President's Executive Order excludes nongovernmental organizations which are engaged in
humanitarian assistance or in refugee operations in Haiti. The Haitian business owners
blocked in the Executive Order lease property and provide services to international
humanitarian operations in Haiti, including the State Department's Agency for International
Development ("AID"), and these business owners also control a significant portion of retail
food sales in Haiti. We hope to facilitate humanitarian shipments through licensing
procedures.
To assist AID and its approved organizations in Haiti, we have issued a
blanket license that makes case-by-case licensing by OFAC unnecessary. After State or
AID confirms that the humanitarian activities of a non-governmental organization ("NGO")
are appropriate, OFAC issues a registration number to the organization containing specific
instructions to enable the NGO to route funds to Haiti without having the payment order
rejected or blocked by a U.S. financial institution. We coordinate such requests with either
AID or State in order to be sure that the activities of the NGOs are consistent with U.S.
foreign policy with respect to Haiti. As of June 23, OFAC had received 66 requests from
humanitarian organizations to register projects in Haiti. OFAC issued instructions to all
U.S. banks, including their overseas branches, to honor authorized transactions for NGOs.
Accounts and transactions of Haitian citizen personnel who are verified as employed by
registered NGOs will be excluded from blocking. In addition, registered NGOs have been
authorized to pay Haitian nationals who provide services to NGO-sponsored projects and
to handle U.S. financing for local contractors working on NGO projects, provided that no
debits are made to blocked accounts.
A major concern in imposing tightened sanctions against Haiti has been to
ensure that supplies of essential food and medicine continue to flow. The embargo exempts
a number of commodities, including rice, beans, sugar, wheat flour, cooking oil, corn, com
flour, milk, edible tallow, and medicine and medical supplies. We have implemented a
system by which payments related to the export of these commodities can flow freely
through the United States banking system and have instructed U.S. banks holding accounts
for Haitian banks to open special accounts to handle authorized transactions. We are also
streamlining the process of verifying the legitimacy of funds transfers involving the sale of
exempt goods by U.S. exporters, while continuing our enforcement role in ensuring that
unauthorized transfers do not flow between the United States and Haiti.
5
In a similar manner, we have been working with the Departments of State and
Transportation and AID to secure exceptions for humanitarian flights to carry exempt or
UN-approved shipments to Haiti. This process currently involves requesting and securing
approval of the flight from the UN Sanctions Committee and coordinating approved flights
with the FAA. The UN Sanctions Committee has approved a number of flights, ~d
requests for others are currently being processed.
Sanctions Enforcement
Working through the bank supervisory agencies and the Customs Service,
OFAC's Compliance and Enforcement Divisions have worked to provide the fullest
enforcement of each stage of the Haitian sanctions program. Through our efforts to date,
we have assessed more than 120 civil penalties totalling nearly a million dollars against
violators of various sanctions prohibitions, in addition to the amounts collected -- and
merchandise seized and forfeited -- by the Customs Service for concurrent violations of the
customs laws. Information provided to us by the maritime Multilateral Interdiction Force
operating in the sea lanes to Haiti has proven valuable in identifying vessels which have
surreptitiously left the United States with contraband for Haiti. Although such vessels,
which are not U.S.-flagged, can be escorted to the nearest U.S. port and the offending cargo
removed, authority to seize the vessel is lacking in either the applicable UN resolutions or
Executive Orders, or in the underlying sanctions statutes. As a result, such vessels can only
be detained for release to the flag state for such action as it may wish to take.
At each stage of the U.S. sanctions program against Haiti, we have been
mindful of the need to balance an effective sanctions program with the need to maintain the
essential flow of humanitarian goods to Haiti. While pursuing sanctions measures calculated
to apply real pressure on the de facto regime and its supporters in Haiti, we have provided - either by exempting language or through the issuance of licenses -- the means by which
humanitarian shipments can continue.
Thank you for your invitation to appear here today. I would be pleased to
answer any questions you might have.
-30-
DEPARTMENT
OF
THE
TREASURY
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
July 29, 1994
CONTACT: Jon Murchinson
(202) 622-2960
BORROWING ADVISORY COMMITTEE MEETING AND REFUNDING PLANNED
The Treasury Department's Borrowing Advisory Committee will hold an open meeting
at 11:30 a.m. Tuesday, August 2, 1994 in the Cash Room.
Deputy Assistant Secretary (Federal Finance) Darcy Bradbury will hold a press
conference to announce the Treasury Department's quartcrly refunding at 2 p.m. on
Wednesday, August 3, 1994 in the Cash Room.
Media without Treasury, White House, State or Congressional credentials wishing to
attend should contact the Office of Public Affairs at (202) 622-2960, with the following
information: name, social security number and date of birth, by 6 p.m. Monday, August I for
Tuesday's event and by 6 p.m. Tuesday, August 2 for Wednesday's event. This information
may be faxed to (202) 622-1999.
-30-
LR-980
DEPARTMENT
OF
THE
TREASURY
lREASURY (M'll
NEW
S
\lt~'~<aI/.~~./.........................
1 ..........................
17R~ .....
OrnCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220 • (202) 622-2960
FOR IMMEDIATE RELEASE
July 29, 1994
Contact: Scott Dykema
(202) 622-2960
U.S., SWITZERLAND TO INCREASE COOPERATION ON TAX MAITERS
The Treasury Department said Friday talks have been completed with an official
Swiss delegation on increased exchange of information, including banking information,
and cooperation in tax matters.
The delegations reached agreement, in principle, to increase the effectiveness of
information exchange under the current bilateral income tax treaty and to expand the
exchange of information in connection with tax crimes under a proposed new treaty.
Negotiators agreed to resume formal negotiations later this year on that proposed
income tax treaty, which would require tax authorities in both countries to provide
documents, including third party records, in appropriate tax crime cases. The new treaty
also would update the current treaty, in effect since 1951, in many respects.
The last round of talks on the pending treaty were held in 1989.
-30-
LB-981
o
federal financing
WASHINGTON. D.C
20220
bonkNEWS
July 29. 1994
FEDERAL FINANCING BANK
Charles D. Haworth, Secretary, Federal Financing Bank (FFB),
announced the following activity for the month of June 1994.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $115.6 billion on June 30, 1994,
posting a decrease of $489.9 million from the level on
May 31, 1994. This net change was the result of an increase in
holdings of agency debt of $736.3 million, and a decrease in
holdings of agency assets of $1,128.8 million and in holdings of
agency-guaranteed loans of $97.4 million. FFB made 13
disbursements during the month of June, and refinanced seven REAguaranteed loans, repriced three REA-guaranteed loans, and
extended the maturity of 21 REA-guaranteed loans. FFB also
received 60 prepayments in June.
Attached to this release are tables presenting FFB June loan
activity and FFB holdings as of June 30, 1994.
LB-982
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Page 2 of 4
FEDERAL FINANCING BANK
JUNE 1994 ACTIVITY
AMOUNT
BORROWER
OF ADVANCE
DATE
FINAL
MATURITY
INTEREST
RATE
AGENCY DEBT
RESOLUTION TRUST CORPORATION
Note 22 /Advance #2
6/21
$1,500,000,000.00
7/1/94
4.408% S/A
$156,182.00
$355,255.00
$71,051.00
$3,964,273.71
$7,922,028.26
$71,051.00
$6,742,550.00
$871,406.00
$69,677.00
$6,015,360.00
12/11/95
6/30/95
6/30/95
1/3/95
11/2/26
6/30/95
12/11/95
9/5/23
12/11/95
6/30/95
5.648%
5.304%
5.304%
4.876%
7.539%
5.315%
5.718%
7.630%
5.882%
5.515%
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
$324,000.00
$2,394,000.00
$5,577,866.30
$1,477,189.25
$1,815,351.25
$5,019,675.75
$6,090,378.50
$3,760,418.28
$628,421.73
$6,684,099.12
$15,647,162.80
$389,093.04
$1,329,627.92
$132,565.91
$660,012.32
$647,959.21
$1,161,676.74
$2,391,777.44
$903,947.18
$1,433,996.27
12/31/19
6/30/95
7/1/96
7/1/96
7/1/96
7/1/96
7/1/96
1/3/17
12/31/18
7/1/96
7/1/96
7/1/96
7/1/96
1/3/17
1/3/11
1/3/11
1/3/11
9/30/94
9/30/94
9/30/94
7.447%
5.309%
6.185%
6.184%
6.184%
6.184%
6.184%
7.409%
7.437%
6.175%
6.171%
6.171%
6.171%
7.513%
7.335%
7.335%
7.335%
4.289%
4.289%
4.289%
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
GOVERNMENT - GUARANTEED LOANS
GENERAL SERVICES ADMINISTRATION
Foley Square Office Bldg.
HCFA Services Contract
HCFA Services Contract
Memphis IRS Service Cent.
ICTC Building
HCFA Services Contract
Foley Square Courthouse
Oakland Office Building
Foley Services Contract
HCFA Headquarters
6/7
6/9
6/9
6/10
6/17
6/17
6/20
6/22
6/27
6/27
RURAL ELECTRIFICATION ADMINISTRATION
Central Elec. Power #331
citizens utilities
1387
*Allegheny Electric #255
*Allegheny Electric 1908
*Allegheny Electric 1908
*Allegheny Electric 1908
*Allegheny Electric #908
+Central Iowa Power #910
+Central Iowa Power #910
*Coop. Power Assoc. 1130
*Coop. Power Assoc. #130
*Coop. Power Assoc. 1130
*Coop. Power Assoc. 1130
*N. Dakota Central 1278
@Northwest Telephone 1028
@Northwest Telephone 1028
@Northwest Telephone 1028
*Saluda River Elec. 1903
*Saluda River Elec. #903
*Saluda River Elec. #903
S/A is a Semi-annual rate:
@ interest rate buydown
* maturity extension
+ 306C refinancing
6/2
6/16
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
Qtr. is a Quarterly rate.
Page 3 of 4
FEDERAL FINANCING BANK
JUNE 1994 ACTIVITY
BORROWER
DATE
.AMOUNT
OF ADVANCE
FINAL
MATURITY
INTEREST
RATE
RURAL ELECTRIFICATION ADMINISTRATION (continued)
*Saluda River Elec. '903
*Saluda River Elec. #903
*Saluda River Elec. #903
*Saluda River Elec. #903
*Saluda River Elec. #903
*Seminole Electric #905
*Semlnole Electric #905
+United Power Assoc. #911
+United Power Assoc. #911
+United Power Assoc. #911
+United Power Assoc. #911
+Unlted Power Assoc. #911
*Washington Electric #269
Qtr. is a Quarterly rate.
extension
+ 306C refinancing
* maturity
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
6/30
$10,092,448.93
$3,331,414.60
$2,705,721. 47
$11,284,457.77
$1,067,556.95
$40,716,415.40
$41,758,521.50
$868,280.30
$1,885,082.47
$342,742.35
$1,370,969.00
$5,655,247.66
$91,196.25
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
1/2/18
1/2/18
1/2/18
1/2/18
1/2/18
12/31/14
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
7.425%
7.425%
7.425%
7.425%
7.425%
7.372%
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Page 4 of 4
FEDERAL FINANCING BANK
(in millions)
Program
Agency Debt:
Department of Transportation
Export-Import Bank
Resolution Trust Corporation
Tennessee Valley Authority
u.s. Postal Service
SUb-total·
Agency Assets:
FmHA-ACIF
Fn\HA-RDIF
FmHA-RHIF
DHHS-Health Maintenance Org.
DHHS-Medical Facilities
Rural Electrification Admin.-CBO
Small Business Administration
sUb-total*
Government-Guaranteed Loans:
DOD-Foreign Military Sales
DEd.-Student Loan Marketing Assn.
DEPCO-Rhode Island
DHUD-Community Dev. Block Grant
DHUD-Public Housing Notes
General Services Administration +
DOl-Virgin Islands
DON-Ship Lease Financing
Rural Electrification Administration
SBA-Small Business Investment Cos.
SBA-State/Local Development Cos.
DOT-Section 511
DOT-WMATA
sUb-total*
June 30, 1994
$
664.7
4,383.4
28,902.3
4,375.0
9,473.1
47,798.5
*figures may not total due to rounding
+does not include capitalized interest
$
664.7
4,847.1
27,402.3
4,675.0
9,473.1
47,062.2
7,233,0
3,675.0
25,091. 0
30.9
41.2
4,598.9
1.2
40,671.2
7,998.0
3,675.0
25,451.0
30.9
45.0
4,598.9
1.2
41,800.0
3,887.9
0.0
0.0
115.1
1,746.5
1,914.6
22.2
1,479.6
17,357.3
58.8
535.7
15.2
3,919.1
0.0
0.0
115.1
1,746.5
1,902.0
22.2
1,479.6
17,418.6
69.2
542.2
15.7
010
27,230.2
=========
$116,092.4
--
OlD
27,132.8
==========
grand-total*
May 31, 1994
$115,602.5
Net Change
FY '94 Net Change
6/1/94-6130/94
1011/93-6130/94
$
0.0
-463.7
1,500.0
-300.0
0.0
736.3
-765.0
0.0
-360.0
0.0
-3.8
0.0
~
-1,128.8
-31. 2
0.0
0.0
0.0
0.0
12.6
0.0
0.0
-61. 3
-10.4
-6.5
-0.5
..JL..Q
-97.4
$
$
664.7
-1,411.2
-2,785.4
-1,950.0
-258.4
-5,740.3
-1,675.0
0.0
-945.0
0.0
-10.1
0.0
-1. 6
-2,631.8
-195.5
-4,790.0
-30.4
-16.2
-54.5
328.9
-0.7
-48.7
-295.9
-31. 6
-40.7
-1.8
-1111 0
-5,354.1
========
========
-489.9
$-13,726.2
DEPARTMENT
OF
THE
TREASURY ~~lit+'}.)
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TREASURY
NEW S
...................................~~~~.~..............IIII..............11
OmCE OF PUBUCAFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON,D.C.. 20220. (202) 622·2960
Contact: Michelle Smith
(202) 622-2960
fOR IMMEDIATE RELEASE
July 29, 1994
BENTSEN APPLAUDS COMMITTEE VOTE ON GATT
Treasury Secretary Lloyd Bentsen on Friday applauded the Senate Finance Committee
for voting to approve funding for the General Agreement on Tariffs and Trade (GATT).
"Chainnan Moynihan led the committee through some tough negotiations, and I
commend him for his able lezdership, n Secretary Bentsen said.
Senate Finance Committee Chairman Daniel Patrick Moynihan invited Se'2retary
Bentsen to discuss the Administration's fUI1ding proposals in the Committee's markup this
morning. The funding package will offset $11.5 billion in tariff revenue losses over the first
five years of implementation of GATT.
"We're an example to the !est of the world," the Secretary said. "It is cri1ic3J that we
move to ratify the Uruguay Round of the GATT this year. "
"Our credibility in asking others to open up their markets is tied to our
implementation of this agreement. It creates the foundation for a fair global trading system."
"The Uruguay Round is not a favor we are doing for the rest of the world; it's in our
economic interest. Treasury estimates that the increased trade will pump hetween $100
billion and $200 billion into the U. S. economy every year after full implementation," the
Secretary said.
The Uruguay Round is the most comprehensive trade agreement in history. Approved
by 117 nations last December, it will reduce barriers blocking imports to worIll markets and
create a more fair, more comprehensive and more enforceahle set of world trade rules.
-30-
LB-983
DEPARTMENT
OF
THE TREASURY
-\
NEWS
TREASURY
~~J78~9~. . . . . . . . . .. .
............................
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASIDNGTON, D.C .• 20220. (202) 622-2960
Adv 2 p.m. EST
ALL DOCUMENTS EMBARGOED UNTIL 2 P.M. EST
Text as prepared for delivery
July 31, 1994
STATEMENT OF TREASURY SECRETARY LLOYD BENTSEN
I have some long-awaited news I want to share with you. The
Office of Government Ethics, a non-partisan agency of the federal
government, staffed by career employees, has now responded to my
request for an evaluation of the actions of senior Treasury
officials.
The Office of Government Ethics analyzed the independently
collected facts on the contacts Treasury Officials had with the
White House regarding Madison Guaranty. The OGE has indicated to
me that, on the basis of their review, I can reasonably conclude
that the conduct of the people working here, as described in the
report, did not, I repeat did not violate the Standards of
Ethical Conduct for executive branch employees. That is my
conclusion -- that Roger Altman, Jean Hanson and Joshua steiner
did not violate any government ethical standards.
On March 3rd, when the extent of these contacts was first
reported, I made it clear I wanted to get to the bottom of it,
particularly as it regards the conduct of the senior officials
here at Treasury. That's why I immediately turned to the federal
agency we rely on for guidance on ethics issues, the OGE. They
have no ax to grind. The staff is professional. They are not
beholden to any political party. Their job is to help officials
understand what the rules are, and, when necessary, let us know
if the rules were broken.
asked the Office of Government Ethics to render an opinion
as to the actions of our officials in relation to the ethics
standards, and the Inspector General was asked to assist.
I
LB-984
(MORE)
2
Lest anyone think the Office of Government Ethics d~agged.
its feet, I would point out that they were unable to begln thelr
work until June 30th. At the request of the Independent Counsel,
Mr. Fiske, these offices -- the OGE and the Inspector General -agreed to wait until his investigation was complete. He found
absolutely no basis for any criminal prosecution of Treasury or
white House officials.
Immediately after Mr. Fiske concluded his work, I asked the
IG and the OGE to begin their examinations and report to me on
their findings. I would point out that the Treasury Department
has cooperated fully with every investigation that has been
conducted, including those on capitol Hill. We turned the
Treasury Department inside out to find every scrap of paper and
every record that might conceivably have some bearing on the
issue.
We are today releasing the OGE's 27-page report, and the
IG's report of it's supporting investigation. We have copies
available for you. I'm sending this material to the President's
counsel, Mr. Cutler, and to the relevant committees of Congress.
It is a very thorough report, covering everything from
meetings to faxing newspaper clippings. The report also says
there were some troubling areas. The OGE tells me there appear
to be misconceptions on the part of Treasury officials that
contributed to the fact the contacts occurred. For instance, the
OGE says there may not have been sufficient appreciation of the
roles involved and thus, what policies apply.
And they said
there might have been misperceptions about the recusal process
and the standards for conveying nonpublic information.
I have just received this report, but I wanted to let you
know what the bottom line is. I want to take some time to study
it in detail and carefully consider the implications for the
management of department functions.
As I've said before, and as Mr. Cutler, the White House
counsel has said, in hindsight it would have been better if some
of these contacts had not occurred.
But
. we should not lose sight of the fact that Mr. Fiske , a
Republlcan, has found that Treasury officials broke no criminal
statutes. We should not lose sight of the fact that an
inde~endent, nonpartisan ethics agency, whose director was
appolnted by the previous Republican administration, says I can
c~nclude that those working at the Treasury Department did not
vlolate the Standards of Ethical Conduct.
3
There have now been no fewer than three very thorough
examinations of this matter which have reached the same
conclusions -- that there were no criminal or ethical violations.
I believe that when the rhetorical dust settles, and partisan
politics is put in its place, Congress will agree. I will make
that point Wednesday when I testify to the Senate Banking
committee.
I have the highest regard for the individuals whose actions
have been examined. I have repeatedly stated my faith in them.
If members of Congress knew these individuals as I do, I don't
believe they would question their character and ability. I want
to complement these individuals, and everyone at the Treasury
Department. I am proud that we have been able to keep the
department operating at full speed throughout this matter.
There's more work to be done, and we're going to get on with the
job.
I have said repeatedly that I wanted to get this issue
resolved and put this matter behind us because we have important
work to do at Treasury. This report contributes to that. I'd
like to thank the director of the Office of Government Ethics,
Stephen Potts, and his capable staff, and Robert Cesca, the
Deputy Inspector General at the Treasury Department, and his
staff, for the extraordinary work they have done and the service
they have performed.
Thank you.
-30-
DEPARTMENT
OF
THE
TREASURY {~.!.'~)
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TREASURY
NEW S
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................................
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C.. 20220. (202) 622-2960
TRANSCRIPT OF
PRESS BRIEFING OF LLOYD BENTSEN
SECRETARY OF THE TREASURY
SUNDAY, JULY 31, 1994
Removal Notice
The item identified below has been removed in accordance with FRASER's policy on handling
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Citation Information
Document Type: Transcript
Number of Pages Removed: 4
Author(s):
Title:
Department of the Treasury Statement of Treasury Secretary Lloyd Bentsen
Date:
1994-07-31
Journal:
Volume:
Page(s):
URL:
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
DEPARTMENT OF THE TREASURY
WASHINGTON
REPORT TO
THE SECRETARY OF THE TREASURY
FROM
THE OFFICE OF GOVERNMENT
ETHICS
JULY 31, 1994
United States
Office of Government Ethics
1201 New York Avenue, NW., Suite 500
Washington, DC 20005-3917
July 30, 1994
The Honorable Lloyd Bentsen
Secretary of the Treasury
Washington, DC 20220
Dear Mr. Secretary:
By letter dated March 3, 1994, you requested that I provide
you with my views on whether any ethics or conflicts questions were
raised by certain meetings or other contacts between employees of
the Department of the Treasury and White House officials concerning
the Resolution Trust Corporation's (RTC) resolution of the Madison
Guaranty Savings and Loan Association (Madison).
The Office of Government Ethics (OGE) is not an investigative
agency. For this reason, and because Treasury's Designated Agency
Ethics Official provided ethics advice in advance of one meeting
and is the Deputy of one of the participants in several of the
contacts at issue, I offered to provide the advice and assistance
of my Office to the Inspectors General of Treasury and the RTC in
connection with an administrative investigation of the matter to be
conducted by them. I agreed to review the report issued by these
offices to provide you with whatever advice I believed would be
appropriate under the circumstances.
It is of course, your
responsibility to make any necessary determinations.
The Office of Government Ethics does not ordinarily
participate in an agency's investigation of the conduct of its own
employees or make recommendations as to appropriate disciplinary or
remedial action. Treasury, as the employing agency, is primarily
responsible for determining whether the conduct of its employees
violates the Standards of Ethical Conduct for Employees of the
Executive Branch, 5 C.F.R. part 2635. There are, however, formal
procedures under which OGE may become involved in recommending
corrective or disciplinary action based upon a violation of the
noncriminal portions of the standards of conduct. Those procedures
may be triggered if OGE has reason to believe that the standards of
conduct have been violated and then determines that the agency has
not investigated the activities, has inadequately investigated the
activities, has improperly interpreted or applied an ethics
provision, or has taken or recommended inappropriate corrective or
disciplinary action. An employee whose conduct is under review by
OGE pursuant to these procedures is entitled to a hearing conducted
on the record.
These procedures are set forth in 5 C.F.R. part
2638, Subpart E.
These procedures have not been triggered. With regard to any
question about an investigation, the Department of the Treasury, in
OGE·10<
Au~ust
199.
The Honorable Lloyd Bentsen
Page 2
conjunction with the RTC, has completed an investigation.
We
received their final report at noon yesterday. Considering the
severe constraints placed upon those offices to complete this
investigation in time for your use in preparing Congressional
testimony, we believe they have done an admirable job. While some
details may not have been as fully developed as they or we might
have wished, we do not anticipate that any further details would
have a significant effect on our analysiS. Further, since you have
not yet acted with regard to the report; we have no basis to
believe you have improperly interpreted or applied an ethics
provision or taken or recommended inappropriate corrective or
disciplinary action. Our only purpose in this letter is to provide
an analysis of the standards we believe are applicable for your
consideration in whatever decisions you make.
Because your authority as Secretary of the Treasury relates to
employees of the Department, the report of the Inspectors General
is necessarily focused upon the activities of officials of the
Treasury Department. For that reason, our analysis is not intended
to cover, nor should it in any way reflect upon, the actions of
individuals who are employed by the White House. Further, because
the sanctions for violating the executive branch standards of
conduct are administrative in nature and, therefore, applicable
only to current employees, we have not provided an exhaustive
analysis of the conduct of any individual who is no longer employed
by the Department.
INTRODUCTION
In view of the considerable attention and commentary this
matter has received, it is appropriate before setting forth our
analysis to emphasize that all conduct that some may perceive as
"unethical" does not necessarily violate the standards of conduct.
The standards at 5 C.F.R. part 2635 are regulatory provisions based
upon the "Principles of Ethical Conduct" enumerated in Executive
Order 12674. Their focus is on ensuring that employees do not use
their public offices for nonpublic purposes. The standards are, in
effect, a written code, with provisions sufficiently specific in
their application to certain types of conduct that an employee can
be held accountable, by administrative disciplinary action, for
their violation. The standards of conduct are not a yardstick by
which all Governmental action can be measured.
"Ethics," in its true sense, is a far more expansive concept.
For instance, whether the United States should send food to famine
victims abroad is a policy decision with a clear "ethical"
dimension. Without some personal financial or other interest in
the undertaking, however, the actions of those who make or carry
out that determination would not violate the standards of conduct,
even though many might characterize a decision to withhold aid as
"unethical."
The Honorable Lloyd Bentsen
Page 3
The standards set forth a code of conduct to which employees
of the executive branch must, at a mJ.nJ.mum, adhere.
Every
violation of a statute, regulation or policy does not amount to a
violation of the standards of conduct; most such actions are simply
violations of the applicable statute, regulation or policy.
Moreover, the standards of conduct do not hold individual employees
accountable for Governmental systems that fail or for errors of
judgment. That is not to say that individual employees are not
otherwise accountable for Governmental systems for which they are
responsible or for the judgment they exercise.
There may be
substantial management and program reasons for reviewing an
employee's performance in a particular role.
That management
responsibility is separate and apart from the responsibility that
an agency also has to measure the employee's conduct against the
standards of conduct.
ANALYSIS
This Office has reviewed the report of the Inspectors General
dated July 29, 1994, including the transcripts of the interviews
conducted and the documents provided as exhibits.
We received
copies of the transcripts as they were produced but we relied upon
review by the Inspectors General of documentation other than that
provided as exhibits.
On the basis of our review, we believe that you might
reasonably conclude that the conduct detailed in the report of
officials presently employed by the Department of the Treasury did
not violate the Standards of Ethical Conduct for Employees of the
Executive Branch. However, many of the contacts detailed in the
report are troubling.
In the course of our review, it appeared
that there were some misconceptions on the part of Treasury
employees that may have contributed to the fact that those contacts
occurred. Treasury employees who performed both Treasury and RTC
functions seem to have failed to appreciate which roles they were
performing and, thus, which agency's policies and regulations
applied. In addition, based on our reading of the testimony, there
appears also to have been a misperception that the standard at
5 C.F.R. § 2635.703 regarding the use of nonpublic information was
the only provision that need be taken into account in deciding
whether information should be conveyed.
And, finally, there
appears to have been a misunderstanding of the function of recusal.
PERTINENT PROVISIONS OF THE STANDARDS OF ETHICAL CONDUCT
During the period when Independent Counsel Robert Fiske was
conducting his investigation and the Inspectors General were
waiting to begin their administrative investigation, this Office
reviewed the standards of conduct to determine which standards, if
any, might apply to the conduct of Treasury officials. With press
accounts as our only basis for what conduct might be involved, we
The Honorable Lloyd Bentsen
Page 4
determined that a "worst-case scenario" might
following provisions in 5 C.F.R. part 2635:
implicate
2635.101(b) (6), the principle that an employee shall
not knowingly make unauthorized commitments or promises
of any kind purporting to bind the Governmenti
§
§ 2635.101(b) (8), the principle that an employee shall
act impartially and not give preferential treatment to
any private organization or individuali
§ 2635.101(b) (14), the principle that an employee shall
endeavor to avoid any actions creating the appearance
that he is violating the law or ethical standards set
forth in this part;
2635.702, the standard that an employee shall not use
public office for the private gain of friends, relatives
or persons with whom the employee is affiliated in a
nongovernmental capacity;
§
§ 2635.702(a), the standard that an employee shall not
use or permit the use of his Government position or title
or any authority associated with his public office in a
manner that is intended to coerce or induce another
person, including a subordinate, to provide any benefit
to himself or to friends, relatives or persons with whom
the employee is affiliated in a nongovernmental capacity;
§ 2635.703,
the standard that an employee shall not
engage in a financial transaction using nonpublic
information, nor allow the improper use of nonpublic
information to further his own private interest or that
of another, whether through advice or recommendation, or
by knowing unauthorized disclosure;
2635.704, the standard that an employee has a duty to
protect and conserve Government property and shall not
use such property, or allow its use, for other than
authorized purposes;
§
§ 2635.705(a),
the standard that, unless authorized in
accordance with law or regulations to use such time for
other purposes, an employee shall use official time in an
honest effort to perform official duties.
§ 2635.705(b), the standard that an employee shall not
encourage, direct, coerce or request a subordinate to use
official time to perform activities other than those
required in the performance of official duties or
authorized in accordance with law or regulation.
the
The Honorable Lloyd Bentsen
Page 5
We provided the Inspectors General with references to these
provisions and discussed possible lines of inquiry to assist them
in establishing the boundaries of their investigation and framing
their interview questions. We did so with the caveat that their
factual findings might narrow or expand the list.
After reviewing the report, we saw nothing to indicate that
any provisions other than those noted above were in issue. We saw
no indication whatsoever that any Treasury employee knowingly made
an unauthorized commitment or promise of any kind purporting to
bind the Government.
5 C.F.R. § 2635.101(b) (6).
We also saw
nothing that would require an analysis of whether any Treasury
employee had used his or her own official time or that of a
subordinate for other than official duties. 5 C.F.R. § 2635.705.
In addition, the provisions of 5 C.F.R. § 2635.704 regarding misuse
of Government property did not appear to be in issue.
That
section's inclusion of "Government records" within the definition
of flGovernment property" was intended to ensure compliance with
various specific legal proscriptions regarding the Government's
ownership of its records, such as the Records Disposal Act. Those
proscriptions were not implicated by the handling of any record at
issue in this case.
The Standard that proved to be most, though not exclusively,
pertinent to our analysis was 5 C.F.R. § 2635.703, which provides
in part:
(a) Prohibition. An employee shall not . . . allow
the improper use of nonpublic information to further his
own private interest or that of another, whether through
advice or recommendation,
or knowing unauthorized
disclosure.
The concept of what constitutes nonpublic information is important
in applying this standard and the regulation, itself, provides the
following definition:
(b)
Definition of nonpublic information.
For
purposes of this section, nonpublic information is
information that the employee gains by reason of Federal
employment and that he knows or reasonably should know
has not been made available to the general public. It
includes information that he knows or reasonably should
know:
Is routinely exempt from disclosure under
(1)
5 U.S.C. 552 or otherwise protected from disclosure by
statute, Executive order or regulation;
(2)
Is designated as confidential by an agency; or
The Honorable Lloyd Bentsen
Page 6
Has not actually been disseminated to the
(3)
general public and is not authorized to be made available
to the public on request.
It is our understanding that documents containing information
about referrals to the Department of Justice are generally exempt
from public disclosure by virtue of exemption (b) (7) of the Freedom
of Information Act (FOIA)
5 U.S.C. - § 552.
In addition,
information about RTC-generated criminal referrals, including the
fact that a referral has been made, appears to have been designated
as confidential by the RTC. As set forth in the memorandum of June
17 1993 provided as Exhibit 3, RTC's policy with respect to
criminal referrals is one of strict confidentiality.
Unless
directed by counsel, disclosure of any investigative matter is
prohibited without authorization by the head of the Office of
Investigations.
I
I
As a general proposition, the fact that information has been
leaked would not cause an agency to consider the information to
have lost its "nonpublic 11 character.
This is well-established
under the ForA.
A number of FOIA cases have dealt with the
question of whether the unauthorized disclosure of information
would prevent an agency from claiming that the information is
nonetheless exempt under the FOrA. It is clear from the decisions
in these cases that a waiver of the FOIA exemptions has not
occurred because of an unauthorized disclosure. See,~, Simmons
v. Department of Justice, 796 F.2d 709 (4th Cir. 1986) j MedinaHincaple v. Department of State, 700 F. 2d 737 (D. C. Cir. 1983).
Note also that in Resolution Trust Corporation v. Dean, 813 F.
Supp. 1426 (D. Ariz. 1993), a non-FOIA civil discovery decision,
the court found no waiver of the attorney client privilege where an
RTC "Authority to Sue Memorandum" was leaked.
This proposltlon regarding the "nonpublic" nature of
information that has been leaked would hold true as well under
§ 2635.703 of the standards of conduct.
Leaked information could
be "nonpublic" within the meaning of § 2635.703(b) in that it could
be exempt under the FOIA; could retain an agency designation of
confidentiality; or would not have been "authorized to be made
available to the public on request."
The RTC's policies and procedures regarding disclosure of
information about criminal matters referred to the Department of
Justice, as set forth in the June 17, 1993 memorandum and other RTe
documents, provide for information about such referrals to be
shared within the Government only among a few specified entities.
The White House is not among the entities specified. Exceptions to
the RTC's disclosure policy must be authorized as noted above.
The RTC's disclosure policy may have been violated in this
case if information regarding a criminal referral was discussed
The Honorable Lloyd Bentsen
Page 7
outside the parameters of that policy, i.e., without the necessary
authorization. For example, Ms. Hanson stated with respect to the
September 29 disclosure that she had been directed by Mr. Altman to
provide information about a referral to Mr. Nussbaum. Mr. Altman
does not recall having given that authorization. In view of the
discrepancy between Ms. Hanson's and Mr. Altman's recollections,
however, we cannot say for certain whether authorization from the
head of the agency was obtained in that-instance. Even had such
authorization been obtained, we cannot say that such authorization
would comport with the RTC's disclosure policy.
In any event, such a finding would resolve only one element of
2635.703. In order for a violation of § 2635.703 to occur, not
only must a disclosure of nonpublic information be "unauthorized,"
the disclosure also must be "to further [the employee's] own
private interest or that of another." That element of § 2635.703
is discussed below, in the analysis of the standards of conduct as
applied to the contacts listed in the report.
§
CONTACTS
Our analysis of the applicable standards of conduct is set
forth below in the chronological order in which the contacts
occurred. In some instances the actual dates of the contacts are
uncertain although the contacts are placed in the chronological
order most supported by the participants' recollections.
9/29
Meeting between Hanson, Nussbaum and Sloan
Ms. Hanson recalls that during the meeting that occurred on
September 29, 1993, she informed Messrs. Nussbaum and Sloan that
the RTC was about to make a criminal referral relating to Madison
and that the Clintons were not objects of the investigations, but
were mentioned as possible witnesses.
According to Messrs.
Nussbaum and Sloan, she related some additional details concerning
the referral.
The September 29 meeting requires analysis under § 2635.703
and under the appearance principle at § 2635.101 (b) (14) as applied
to that standard. If § 2635.703 was not violated, the impartiality
principle at § 2635.101(b) (8) could, nevertheless, be implicated.
We saw nothing in the record to suggest that Ms. Hanson has a
personal friendship or nongovernmental affiliation with the
President or Mrs. Clinton or with any other person who would might
be affected by the referral.
Thus, neither § 2635.702 nor
§ 2635.702(a) would appear to be in issue.
For a disclosure to violate § 2635.703, the information
conveyed must be nonpublic and the disclosure by the employee must
have been a "knowing, unauthorized disclosure" made "to further
[the employee's] own private interest or that of another." While
The Honorable Lloyd Bentsen
Page 8
the term "nonpublic" used in § 2735.703 may tend to suggest that
this provision is intended to apply to disclosures made to those
outside the Government, the section does in fact apply to
disclosures to other Federal employees when made for the purpose of
allowing the improper use of nonpublic information to further the
private interests of another. The term "another" has its ordinary,
broad meaning and is not limited by any definition to those other
than Federal employees.
We believe the information conveyed in the course of the
meeting was nonpublic information within the meaning of
§ 2635.703 (b) .
Ms. Hanson has indicated that her purpose in
disclosing the information about the pending referrals was to
enable the White House to prepare to respond to press inquiries
because the information was apt to be leaked.
According to
f.1:r. Nussbaum, the purpose she indicated to him was to assist the
White House in preparing to respond to press inquiries likely to
result from leaks to the press.
The question of whether Ms. Hanson's disclosure served an
official interest raises a unique issue about the nature of the
Office of the President. Matters that would be of only personal
significance for other executive branch officials may take on
official significance when the President of the United States is
involved. White House staff has long been used in addressing press
inquiries regarding essentially personal matters involving the
President and First Lady. Since appropriated funds have been spent
for these purposes from administration to administration without
any legal objection of which we are aware, we are not in a position
to question the validity of the assumption apparently made by those
who participated in the contacts detailed in the IG report that
dealing with press inquiries regarding the President's and First
Lady's personal lives, including any involvement they may have had
with Madison, is a proper White House function. Since there is no
information in the report suggesting that Ms. Hanson had any
purpose other than assisting the White House to perform its press
function, we believe there is a reasonable basis to conclude that
Ms. Hanson's disclosures were not made to further a private
interest.
Whether it is an appropriate activity for Treasury
employees to assist the White House press office in carrying out
its functions in fielding questions about the personal interests of
the First Family would seem to be a management issue.
We also considered the possibility that Ms. Hanson's
disclosure may have violated the appearance standard, which is set
forth at § 263S.101(b) (14) as follows:
Employees shall endeavor to avoid any actions creating
the appearance that they are violating the law or the
ethical standards set forth in this part.
Whether
particular circumstances create an appearance that the
The Honorable Lloyd Bentsen
Page 9
law or these standards have been violated shall be
determined from the perspective of a reasonable person
with knowledge of the relevant facts.
As
applied to the nonpublic information prov1s1ons of
§ 2635.703, the appropriate inquiry under the appearance standard
is whether a reasonable person with knowledge of the relevant facts
would have reason to believe that Ms. Hanson disclosed the
information regarding the referral for the purpose of furthering
the private interests of the President or others, as opposed to
another purpose including the public interests of the Office of the
President.
Information about investigations and referrals is
protected, in part, to ensure that the subjects of those
investigations or referrals and others who are interested do not
interfere with and are not needlessly embarrassed by the
investigati ve process.
The facts surrounding Madison are so
complex that we are unwilling to speculate what private advantage,
if any, might be gained by knowing about the referral. We will
assume, however, that there was a private advantage that could have
been gained by the President through knowledge of the referral.
When we are discussing the President's private interest, it should
be assumed that the President's private interests include the
interests of the First Lady.
We believe that you could conclude that the appearance
principle was not violated by Ms. Hanson's disclosure.
We
recognize that some may harbor a "suspicion" that the infonnation
was provided to be used for the private advantage of the President.
The appearance principle, however, does not hold an employee
accountable through disciplinary action based upon a standard of
SUsplc1on. Appearances are to be judged from the perspective of a
reasonable person with knowledge of the relevant facts.
In the
preamble that accompanied publication of the standards as a final
rule we stated that we view the reasonable person test as providing
"appropriate assurance to an employee that his or her conduct will
not be judged from the perspective of the unreasonable, uninformed
or overly zealous." S7 Fed. Reg. 35,008 (1992).
The report does not contain any facts that would suggest that
Ms. Hanson had reason to believe that the information she provided
would be improperly used to further the private interests of the
President or any other individual. There is nothing in the report,
for example, that would indicate that she had any reason to believe
the information would be given to the President's private counsel
or to others who may have been mentioned in the referral. In the
absence of any such indication in the report, we believe it is
appropriate for you to consider facts which would give a reasonable
person reason to believe that her purpose was, as she has stated,
to enable the White House to perform its press function. Among
facts that we view as relevant are Mr. Roelle's statement that he
thought it was his responsibility to carry out the policy within
The Honorable Lloyd Bentsen
Page 10
the RTC to advise the CEO of high profile cases precisely because
leaks are a problem at the RTC.
That policy would seem to be
warranted based on the RTC's receipt of press inqu1r1es indicative
of leaks only a week after the disclosure to the White House took
place.
The report understandably does not cover executive branch
practice with respect to agencies advising the White House on
matters about which it is likely to receive press inquiries. That,
however, is a fact that you should consider relevant to the
appearance analysis.
This Office, for example, routinely deals
with the White House on matters relating to the process of
confirming Presidential nominees and, as a matter of course, keeps
White House staff apprised of confirmation-related matters, such as
potential financial conflicts of interest, that are likely to be of
interest to the press. As Secretary of the Treasury, you are in a
better position than we to know the various departmental practices
on advising the White House regarding matters involving the
President likely to be of interest to the press.
As a final note on the appearance issue we should add that we
recognize that having a public purpose for a disclosure does not
preclude an employee from also having as a purpose the furtherance
of a private interest. However, there are no facts in the report
that suggest to us that this was Ms. Hanson's state of mind. If
press leaks were imminent, as Ms. Hanson appears to have believed,
any private advantage to be gained by knowledge of the existence of
the referral would have been largely negated by the newspaper
reports flowing from those leaks.
Because we saw nothing in the report that leads us to believe
that Ms. Hanson violated § 2635.703 by a disclosure intended to
further a private interest, we see no need to address the
additional possible issue under that section of whether her
disclosure was authorized by Mr. Altman.
The ethical principle in § 2635.101 (b) (8) that an employee
shall act impartially and not give preferential treatment to any
private organization or individual, is implemented by subpart E and
§ 2635.702 (d)
of the standards.
Subpart E provides that an
employee should not participate in an official capacity in certain
matters without first obtaining specific authorization if, in his
judgment, persons with knowledge of the relevant facts would
question his impartiality in those matters. The matters covered
include a particular matter involving specific parties if the
employee knows that it is likely to affect the financial interests
of a member of his household or that a person or entity with whom
the employee has any of the "covered relationships" described in
subpart E is a party or represents a party in the matter. Section
2635.702 (d) provides that ".
. an employee whose duties would
affect the financial interests of a friend, relative, or person
I
The Honorable Lloyd Bentsen
Page 11
with whom he is affiliated in a nongovernmental capacity" shall
comply with any applicable procedures in subpart E before carrying
out his duties.
It has been suggested that the September 29 meeting and other
contacts between Treasury and White House officials comprised
preferential treatment of President and Mrs. Clinton, in violation
of the Standards of Conduct. However, the-'conditions necessary for
such a violation are not present here.
First, the officials
involved were obviously not members of the Clintons' household.
Nor did the officials have a "covered relationship" with the
Clintons under the terms of subpart E.
In addition, as noted
above, there was an assumption here, arising from the unique nature
of the Office of the President, that the contacts were made
pursuant to a proper White House function.
Under the
circumstances, you could reasonably conclude that the contacts did
not comprise preferential treatment under the standards of conduct.
It is unclear from the report what Mr. Altman's role in the
disclosure of September 29 may have been. He stated that he does
not recall having told Ms. Hanson to make the disclosure to
Mr. Nussbaum and he does not recall having received Ms. Hanson's
memorandum of September 30. Ms. Hanson's memorandum to him noting
the completion of the task she felt he had directed does not
provide assistance in analyzing what his state of mind might have
been at the time any direction may have been given. We feel there
is insufficient information to enable us to provide you with any
further analysis of Mr. Altman's participation in this disclosure,
if any.
9/30 Phone conversation between Hanson and Sloan
Mr. Sloan recalls having received a telephone call from Ms.
Hanson on September 30 during which she updated him on the press
inquiry that had been received from Ms. Schmidt of The Washington
Post. According to Mr. Sloan, she referred him to The New York
Times article by Mr. Gerth dated in March of 1992. Mr. Sloan's
notes dated 9/30, provided as Exhibit 6, appear to relate to that
telephone conversation and would indicate that, by September 30,
Mr. Sloan had learned information about aspects of the referral
that would appear to be pertinent other than to the involvement of
the Clintons.
Because Mr. Gerth's article was public information, that
reference raises no issues under the standards of conduct. Since
it appears that Mr. Altman may have faxed this article to
Mr. Nussbaum in March of 1993, Ms. Hanson's reference to the 1992
article may have been provided simply to clarify that this was the
information to which she had alluded in her statement to Messrs.
Nussbaum and Sloan on the previous day.
The Honorable Lloyd Bentsen
Page 12
Information about the contents of the press inquiry from
Ms. Schmidt may well have been nonpublic.
Since Ms. Hanson was
advised by Mr. Nussbaum to communicate further developments on
press leaks to Mr. Sloan, we believe it is appropriate to attribute
to her the same purpose she had in making the disclosure the prior
day. Accordingly, we have no reason to.believe that the disclosure
was made for the purpose of furthering a private interest and our
analysis under the standards of conduct would be the same as above.
There does not appear to have been a violation of the standards of
conduct. Mr. Sloan's notes would suggest that information other
than that contained in the press inquiry from Ms. Schmidt may have
been conveyed by Ms. Hanson.
Insofar as any such disclosure
provided the White House information about the manner in which the
referral might involve the President, the information would appear
to be sufficiently related to the press inquiry that it should be
sUbject to the same analysis.
Ms. Hanson's possible disclosure of information other than
that relating to the President would seem to go beyond what was
necessary to achieve her stated purpose of assisting the White
House with its press function. However, there is nothing in the
report to suggest the involvement of any private interest that
would have motivated her to make these particular disclosures and,
therefore, we do not have reason to believe they violated the
standards of conduct.
9/30
Fax from Hanson to Sloan
Ms. Hanson stated that she faxed a copy of the September 30
Early Bird to Mr. Sloan, although Mr. Sloan does not recall having
received this transmission.
The Early Bird was an internal RTC
document prepared for a select group of senior managers by the
public affairs office to alert them to the latest press inquiries.
It carried the caveat "for internal use only." While Mr. Altman
was Acting CEO, the Early Bird was distributed to a very small
number of Treasury employees.
Without regard to the technicalities of whether it is or is
not encompassed by a FOIA exemption, we believe the Early Bird
contained nonpublic information that had not actually been
disseminated to the general public and was not authorized to be
made available to the public on request.
However, insofar as Ms. Hanson's transmission of the Early
Bird served to advise the White House of press inquiries from Ms.
Schmidt relating to Madison, that information appears to have been
conveyed with the same purpose as the information conveyed in the
previously discussed telephone conversation with Mr. Sloan on the
same day and is subject to the same analysis. Consequently, there
does not appear to have been a violation of the standards of
conduct.
The Honorable Lloyd Bentsen
Page 13
10/7
Phone conversation between Hanson and Sloan
During the course of the telephone call that Ms. Hanson made
on October 7, 1993, she advised Mr. Sloan of further developments
with respect to press inquiries. Mr. Sloan's notes dated 10/7 are
provided as Exhibit 6 and would indicate that press inquiries had
been received from Mr. Gerth and Ms. Schmidt. This disclosure is
subject to the same analysis as applies to Ms. Hanson's telephone
discussion with Mr. Sloan on September 30 and does not appear to
involve a violation of the standards of conduct.
10/13
Phone conversation between DeVore and Gearan
It is not clear who called to set up a meeting for the
following day. Mr. DeVore stated he spoke to Mr. Gearan after he
found out a meeting had been arranged at the White House.
He
suggested that Mr. Gearan attend.
Mr. Gearan does not recall
having received a call from Mr. DeVore. There is nothing in the
record suggesting that information of any significance was imparted
by Mr. DeVore in the course of the conversation, however, and,
without regard to whose recollection may be more accurate, there
does not appear to have been a violation of the standards of
conduct.
10/14 Meeting between DeVore, Steiner and Hanson from Treasury and
Nussbaum, Gearan, Lindsey, Sloan and Eggleston from the White
House.
Essentially two types of information may have been conveyed to
the White House at this meeting. The first was the existence and
subject of the press inquiries Mr. DeVore had received. The second
was the confirmation that a referral had, in fact, been made to the
Department of Justice.
Most of the participants viewed this as Mr. DeVore's meeting,
although he believed he was asked to attend. That is not crucial
to the analysis. Mr. Lindsey's October 20 notes of the October 14
meeting are reproduced as Exhibit 9 to the IG report and the
essential contents of Mr. Gearan's notes made during the meeting
are set forth in the 1G report.
In most respects, the
recollections of the participants are generally consistent with
those notes.
Most described the discussion as conducted by Mr.
DeVore.
Press inqulrles received from Ms. Schmidt of The
Washington Post and from the Associated Press were discussed. Mr.
DeVore also described the information about Madison that he had
received in an inquiry from Mr. Gerth of The New York Times. They
generally recall that Mr. DeVore also described the information
that Mr. Gerth was seeking. Mr. Gerth was seeking to ascertain the
routing and status of a criminal referral which he understood had
gone from the RTC's Kansas City office to RTC headquarters in
The Honorable Lloyd Bentsen
Page 14
Washington and believed was being held up and not released to the
Department of Justice.
Mr. Gerth also wanted to know who had
endorsed four checks.
According to Mr. Lindsey's notes, Mr. DeVore reported that he
had confirmed with the RTC that the referral had been forwarded to
the U.S. Attorney in Little Rock. Mr. DeVore's recollection is
that he first learned in the course of the White House meeting that
the referral had actually been completed. Mr. Steiner recalls that
Mr. DeVore did not know before the meeting that the referral had
been made.
Mr. Katsanos' recollection was that Mr. DeVore had
called in advance of the meeting in order to get information as to
whether the referral had been made, but the timing of Mr. Katsanos'
follow-up call responding to Mr. DeVore is unclear from Mr.
Katsanos' statement.
We know of no RTC policy that specifically protects from
disclosure the fact that Mr. Gerth or Ms. Schmidt had made a press
inquiry regarding Madison. The precise content of that inquiry,
however
is a different matter.
The fact that substantive
information about the Madison referral may have been imparted by
either press inquiry does not change the character of the
underlying referral information.
The referral information,
including the information that a referral had been made, was
nonpublic information.
If an employee in the course of his
official duties becomes aware of information he knows or reasonably
should know is nonpublic Government information, the source of that
information does not change its character.
I
There is a disagreement about what Mr. DeVore knew about the
criminal referral prior to this meeting, independent of the
information imparted through the inquiries from Mr. Gerth. There
is also disagreement as to what information Mr. DeVore disclosed at
the meeting.
Assuming that he had nonpublic information and
disclosed it, then the focus of the analysis would be on whether
Mr. DeVore's disclosure of the information was a knowing,
unauthorized disclosure made to further the private interests of
another.
Most other participants perceived that the purpose for the
meeting was to discuss how Mr. DeVore should respond to Mr. Gerth's
inquiry and the meeting included a discussion of whether Mr. DeVore
should confirm that the referrals had been made so that Mr. Gerth
would not erroneously report that they were being held up in
Washington.
Mr. DeVore characterized his purpose somewhat
differently. He stated he wanted to help Mr. Gerth if he could,
and he wanted to make sure the White House knew the Gerth
"investigation" was underway. He characterized the meeting as a
"discussion of what the issues spanned."
The Honorable Lloyd Bentsen
Page 15
The discussion that occurred at the meeting seems to have been
consistent with the perception of most other attendees that
Mr. DeVore, if not actually seeking advice, was seeking to
coordinate his press function with White House officials
responsible for press inquiries on matters relating to Madison.
Mr. Steiner stated that he and Mr. DeVore had noted that White
House officials had been quoted or referred to in press accounts
relating to Madison. It may have been that his purpose was, as he
stated, to alert those officials to Mr. Gerth's inquiries.
Mr.
DeVore did not specifically articulate the purpose for which he
intended that information to be used, but the discussion suggests
that his purpose, at least in part, was to provide information that
would be useful in responding to press inquiries. We saw nothing
in the report to suggest he believed that the information would be
used otherwise.
Mr. DeVore's statement that he also wanted to assist Mr. Gerth
suggests that he may have had the additional purpose of obtaining
information about the referral or the checks to answer Mr. Gerth's
inquiries. As Assistant Secretary for Public Affairs and Public
Liaison, Mr. DeVore seems to have felt that it was his
responsibility to be as responsive as possible to this press
inquiry. We do not believe, however, that Mr. DeVore's position at
Treasury required him to be responsive to matters beyond the
jurisdiction of the Department of the Treasury by disclosing
information about this or any specific RTC referral.
His
disclosure to Mr. Gerth appears to have violated RTC's disclosure
policy and, because of the lengths to which he went to obtain
information for Mr. Gerth, it raises at least an appearance issue
~n our minds.
Mr. DeVore might have felt less necessity for the October 14
meeting had he appreciated the relationship between Treasury and
the RTC. Mr. DeVore appears to have believed that the RTC was a
bureau of the Department of the Treasury, rather than a separate
agency. The policy of that separate agency was to neither confirm
nor deny the existence of referrals to the Department of Justice.
Adherence to this policy would have eliminated some of the
necessity Mr. DeVore apparently perceived for coordinating his
press function with White House press officials.
As Acting CEO of the RTC, Mr. Altman enlisted the assistance
of several Treasury employees in performing his CEO function.
According to Mr. Schmalzbach's memorandum at Exhibit 22, Mr.
Altman, as Acting CEO of RTC, had authority under 12 U.S.C. §
1441a(b) (8) (B) (ii) to use the services of employees of any
executive department and had the commensurate authority, as Deputy
Secretary of the Treasury, to agree on Treasury's behalf to the
RTCfs use of Treasury personnel.
These detail arrangements,
however, were accomplished casually, without the reimbursement
contemplated by the statute and without an appreciation by the
Treasury personnel involved that they were thereby performing RTC
The Honorable Lloyd Bentsen
Page 17
12/30
Telephone call from Ludwig to Sloan
Mr . Sloan stated that he returned a call to Mr. Ludwig who
explained that the President had mentioned something about Madison
and he asked for newspaper articles on the subject in case it
should corne up in a subsequent conversation with the President.
Mr. Sloan related the request to Mr. Eggleston, who in turn called
Mr. Klein who was attending Renaissance weekend.
Mr. Ludwig's request for newspaper articles does not appear to
involve a violation of the standards of conduct.
12/29
Telephone call from Ludwig to Kennedy
According to Mr. Ludwig, he placed a call to Mr. Nussbaum on
December 29, but ended up talking wi th Mr. Kennedy to whom he
stated his request to be provided with newspaper articles about
Madison. Mr. Kennedy apparently referred him to Mr. Klein. Mr.
Kennedy was not interviewed.
Mr. Ludwig's request for newspaper articles does not appear to
involve a violation of the standards of conduct.
12/29
Telephone call from Klein to Ludwig
According to Mr. Ludwig he had a telephone conversation, or
possibly spoke during a dinner at Renaissance Weekend, with Mr.
Klein whom he described as being cautionary about any contact. Mr.
Klein was not interviewed.
This conversation appears to have occurred after Mr. Eggleston
telephoned Mr. Klein to inform him of Mr. Ludwig's conversation
with the President and to ensure that Mr. Klein spoke to Mr. Ludwig
so that he would have no further discussions of the Madison matter
with the President. We assume this is what Mr. Ludwig meant by the
description of Mr. Klein as "negative. Mr. Ludwig's receipt of
this caution from Mr. Klein would not appear to involve a violation
of the standards of conduct.
11
12/30
Meeting between Ludwig, Klein and the President
According to Mr. Ludwig, his encounter with the President and
Mr. Klein in the hallway outside a Renaissance Weekend seminar
involved a brief conversation in which they agreed that there would
not be any discussion of the Madison/Whitewater issue.
This discussion does not appear to involve a violation of the
standards of conduct.
The Honorable Lloyd Bentsen
Page 17
12/30
Telephone call from Ludwig to Sloan
Mr. Sloan stated that he returned a call to Mr. Ludwig who
explained that the President had mentioned something about Madison
and he asked for newspaper articles on the subject in case it
should corne up in a subsequent conversation with the President.
Mr. Sloan related the request to Mr. Eggleston, who in turn called
Mr. Klein who was attending Renaissance weekend.
Mr. Ludwig's request for newspaper articles does not appear to
involve a violation of the standards of conduct.
12/29
Telephone call from Ludwig to Kennedy
According to Mr. Ludwig, he placed a call to Mr. Nussbaum on
December 29, but ended up talking with Mr. Kennedy to whom he
stated his request to be provided with newspaper articles about
Madison. Mr. Kennedy apparently referred him to Mr. Klein. Mr.
Kennedy was not interviewed.
Mr. Ludwig's request for newspaper articles does not appear to
involve a violation of the standards of conduct.
12/29
Telephone call from Klein to Ludwig
According to Mr. Ludwig he had a telephone conversation, or
possibly spoke during a dinner at Renaissance Weekend, with Mr.
Klein whom he described as being cautionary about any contact. Mr.
Klein was not interviewed.
This conversation appears to have occurred after Mr. Eggleston
telephoned Mr. Klein to inform him of Mr. Ludwig'S conversation
with the President and to ensure that Mr. Klein spoke to Mr. Ludwig
so that he would have no further discussions of the Madison matter
with the President. We assume this is what Mr. Ludwig meant by the
description of Mr. Klein as "negati ve. 11 Mr. Ludwig's receipt of
this caution from Mr. Klein would not appear to involve a violation
of the standards of conduct.
12/30
Meeting between Ludwig, Klein and the President
According to Mr. Ludwig, his encounter with the President and
Mr. Klein in the hallway outside a Renaissance Weekend seminar
involved a brief conversation in which they agreed that there would
not be any discussion of the Madison/Whitewater issue.
This discussion does not appear to involve a violation of the
standards of conduct.
The Honorable Lloyd Bentsen
Page 18
Jan 94
Telephone call from Ludwig to Williams
Mr. Ludwig's call to Ms. Williams sometime after Renaissance
Weekend involved him providing advice of a general nature that does
not appear to involve a violation of the standards conduct.
2/1
Telephone call from Altman to McLarty or Ickes
Mr. Al tman 's call to either Mr. McLarty or Mr. I ckes on
February 1 to arrange a meeting for the next day does not appear to
involve a violation of the standards of conduct.
2/2 Meeting between Altman and Hanson from Treasury and Nussbaum,
Ickes, Williams and Eggleston
This meeting was described by all participants as consisting
of two distinct parts.
The first part involved a briefing by
Mr. Altman on the application of the statute of limitations to
potential civil actions arising out of the failure of Madison. The
second part involved a discussion by Altman of his possible recusal
from matters involving Madison.
The participants' recollections as to the first part of the
meeting do not deviate in any significant respect from the first
eleven of the twelve talking points detailed in the document
provided as Exhibit 12. Six of those talking points relate simply
to the statute of limitations, its general application and the
consequences that would flow as a matter of course with the
expiration of the statutory period.
This information is public
rather than nonpublic information.
Five of the eleven talking
points relate to the application of the statute of limitations
specifically to Madison. We assume that the date of the take-over
of Madison was a matter of public record and that the February 28
date indicated in the third talking point as the date on which the
statute of limitations would have run was public information
ascertainable by factoring the takeover date into a statutorily
prescribed computation.
While the record does not specifically
develop the point, we understand that the subjects of the first and
eighth talking points were public information. On the basis of the
record provided, we have no reason to believe that the information
set forth in the tenth talking point regarding Mr. Ryan's and Ms.
Kulka's positions was nonpublic information. And since it would
seem to be little more than what a reasonable person would expect,
we assume there was nothing of a nonpublic nature in the
information in the eleventh talking point that the RTC analysis
would be completed before the statutory period expires.
In the context of the briefing described above, Ms. Williams
asked if the same information was going to be provided to private
counsel for the parties. Mr. Altman said he thought so.
The Honorable Lloyd Bentsen
Page 19
There is nothing in the report that suggests that the first
part of the meeting involved a disclosure of nonpublic information
and, thus, we .do not believe § 2635.703 is implicated. We also do
not believe that Mr. Altman's briefing involved a violation of the
appearance principle at § 2635.101(b) (14) as applied to § 2635.703.
Where the information conveyed is public rather than nonpublic
information, we view that single, highly relevant fact as decisive
in applying the appearance principle, which assumes knowledge of
the relevant facts by a reasonable person. His response to the
question about a possible briefing of private counsel does not
implicate the standards of conduct.
If you should disagree with our view as to the character of
the information conveyed by Mr. Altman during the February 2
meeting, your analysis should involve the considerations discussed
in connection with Ms. Hanson's disclosures to Messrs. Nussbaum and
Sloan on September 29.
In that event, however, there is one
additional consideration that, as a practical matter, may be
decisive unless you find that Mr. Altman disclosed nonpublic
information not reasonably within the ambit of the talking points.
Mr. Aleman's disclosure of the information contained in the talking
points and his participation in the meeting for the purpose of
conveying that information had been cleared in advance with an
ethics official by Ms. Hanson. Under § 2635.107(b), disciplinary
action will not be taken against an employee who has engaged in
conduct in good faith reliance upon the advice of an ethics
official, provided that, in seeking such advice, he has made full
disclosure of all relevant circumstances.
The talking points,
which we regard as the single most relevant circumstance, were
shown to Mr. Foreman who, we believe, correctly advised that the
information was public. As a technical matter, we believe Altman's
participation should have been cleared by an RTC ethics Official,
but as discussed above in connection with the October 14 meeting.
we are aware of the manner in which Treasury officials were used to
assist Altman in fulfilling his RTC responsibilities and believe
his reliance on the advice of Treasury's, rather than RTC's, ethics
official, is inconsequential in this case.
The second half of the meeting involved a discussion prompted
by Mr. Altman's statement that he was thinking of recusing or had
decided to recuse. In evaluating Mr. Altman's conduct, we do not
view as a matter of any consequence the differing perceptions of
the meeting participants as to whether Mr. Altman held any
conviction with respect to recusal at the outset of the discussion.
We know of nothing that would have prohibited Altman from
discussing, even publicly, his thoughts about recusal and do not
believe his discussion of recusal involved a violation of the
standards of conduct.
Because it was the topic of the discussion during the second
part of the February 2 meeting, this may be an appropriate point at
The Honorable Lloyd Bentsen
Page 20
which to comment upon the subject of Mr. Altman's recusal and
recusal in general. This Office concurred in the written advice
Mr. Altman received from the RTC's Designated Agency Ethics
Official which is provided as Exhibit 16 and we continue to regard
that advice as correct. Mr. Altman's friendship with the President
is not a covered relationship that would necessarily trigger the
recusal procedures in § 2635.502 of the standards. It was within
Mr. Altman's discretion to elect to use-those procedures if he was
concerned that the circumstances, including his relationship with
the President, would raise a question concerning his impartiality.
Under the applicable provisions of the standards of conduct,
including § 2635.102(b), it was ultimately his decision to make, in
consultation with the RTC's Designated Agency Ethics Official.
While we would never find fault with an individual's
sensltlvity to conflicts or appearances of conflicts, Mr. Altman's
actions in this regard are somewhat confusing. II Recusal " is simply
another word for nonparticipation and is used synonymously with the
word I1disqualification.
One recuses or disqualifies by not acting
in a matter.
There is no need for actual recusal unless the
circumstances would call for an employee's participation in some
matter. As indicated in the memorandum Mr. Altman received from
the RTC's Designated Agency Ethics Official, it is not necessary
for an employee to decide whether to participate in any particular
matter until such time as the matter comes before him. However, an
employee can announce his intent to recuse in the event something
should arise. This may have been what Mr. Altman thought he should
do given questions that were being raised by Members of Congress.
II
It is important to note, however, that the impartiality
provisions of the standards of conduct may not be relied upon by an
employee as the basis for recusing himself from a matter because he
simply does not wish to be involved or to exert the effort
required. Under the standards of conduct, employees are expected
to perform their duties fully unless there is a reason that their
participation in a matter will result in an actual conflict,
including an inability to act impartially, or will result in an
appearance of conflict significantly detrimental to the public's
legitimate perception of the fairness of the Governmental processes
involved.
2/2 or 3
Telephone call from Altman to McLarty
Mr. Altman stated that he called Mr. McLarty to advise him
that he had decided not to recuse for the time being. Mr. McLarty
recalls only that Mr. Altman called him to acknowledge that the
previous day's meeting had taken place and that they discussed his
dilemma about whether to recuse. Just as Mr. Altman was free to
discuss the issue of his possible recusal with anyone he chose, he
was free to advise anyone, including Mr. McLarty, as to his state
of mind on the subject. This does not appear to have involved a
The Honorable Lloyd Bentsen
Page 21
violation of the standards of conduct, nor would any conversation
for the purpose of informing Mr. McLarty that the meeting had taken
place.
The above analysis with respect to Mr. Altman's
participation in the February 2 meeting should apply to any
discussion of the substantive content of the meeting he may have
had with Mr. McLarty and, thus, the discussion does not appear to
have involved a violation of the standards of conduct.
2/3
Meeting between Altman and Nussbaum
During their brief encounter on February 3, Mr. Nussbaum
recalls that Mr. Altman advised him that he probably wasn't going
to recUSe. Although Mr. Altman does not recall this discussion,
any statements he may have made for the purpose of conveying his
state of mind on the subject would not appear to have involved a
violation of the standards of conduct.
2/3
Fax from Hanson to Nussbaum
The document sent to Mr. Nussbaum on February 3 from a fax
machine in Treasury's Office of the General Counsel is a copy of
Mr. Leach s letter of the same date and its attachments.
Ms.
Hanson does not recall having sent the fax.
I
This document appears to have been made public by Mr. Leach on
the date that it was dispatched and, thus, its transmittal to
Mr. Nussbaum does not raise issues under the standards of conduct.
An article entitled "Leach releases documents to show Whitewater's
role" appears in the February 4, 1994 edition of The Washington
Times. The article states that the letter was released the prior
day, February 3, 1994, along with a staff memorandum and other
documents, which we assume are the attachments to the letter.
Copies of the checks that appear in the attachments were reproduced
wi th the article.
This transmission of a copy of Mr. Leach's
letter does not appear to involve a violation of the standards of
conduct.
2/3 and 4
Telephone calls between Hanson and Nussbaum
We believe there were two telephone calls between Mr. Nussbaum
and Ms. Hanson on February 2 or 3, although the list of contacts
includes only one contact.
The first telephone call appears to have taken place on
February 3. It is unclear who placed the telephone call. In the
course of the ensuing conversation, Ms. Hanson told Mr. Nussbaum
that she was continuing to research the issue of recusal.
Mr. Nussbaum referred Ms. Hanson to the White House ethics expert,
Ms. Nolan, and raised the possibility of turning the Madison civil
case over to the Independent Counsel, whose charter covers civil
matters.
The Honorable Lloyd Bentsen
Page 22
The discussion between Ms. Hanson and Mr. Nussbaum on the
subject of recusal was in the nature of discussions that occur
routinely between attorneys with a common interest in research
being undertaken.
Ms. Hanson's role as the recipient of Mr.
Nussbaum's suggestion to contact Ms. Nolan and of his observation
about possibilities raised by the Independent Counsel's charter
does not appear to have involved a violation of the standards of
conduct.
In what would appear to be another telephone conversation that
took place on February 3 or 4 Ms. Hanson was informed by Mr.
Nussbaum that the Independent Counsel's charter was published in
that day's Federal Register. She also may have been asked by Mr.
Nussbaum how Ms. Kulka was hired for her position as RTC General
Counsel. If so, it would have been in this conversation that she
explained to Mr. Nussbaum that Mr. Altman had made the decision to
hire Ms. Kulka.
I
The receipt of information in the nature of that conveyed by
Mr. Nussbaum does not implicate the standards of conduct and we are
not aware of anything inappropriate in Ms. Hanson's explanation
that Mr. Altman had hired Ms. Kulka.
Ms. Hanson's role in this
telephone conversation does not appear to have involved a violation
of the standards of conduct.
2/3
Meeting between Altman, Ickes and Eggleston
In this brief meeting that took place in the White House,
Mr. Altman recalls that he advised Mr. Ickes that he had decided
not to recuse. Mr. Ickes recalls a discussion of this nature and
believes Ms. Williams may have been present. Mr. Eggleston recalls
that both he and Mr. Ickes were present.
Although the precise
number of participants is in doubt, this discussion by Mr. Altman
of his state of mind does not appear to involve a violation of the
standards of conduct.
2/3
Meeting between Hanson, Ickes, Eggleston and Williams
Had the scheduling worked out as intended by Mr. Altman,
Ms. Hanson would have been a party to his meeting with Mr. Ickes
and others. Because Ms. Hanson was late in arriving, Mr. Altman
had already related his decision not to recuse and Ms. Hanson's
only role in the discussion that took place in the White House on
February 3 was as the recipient of and respondent to a question
from Mr. Ickes about who knew she had advised Mr. Altman to recuse.
Ms. Hanson s factual response to Mr. Ickes question does not
appear to involve a violation of the standards of conduct.
I
I
The Honorable Lloyd Bentsen
Page 23
2/4
Telephone call from Foreman to Nolan
Mr. Foreman's first telephone call to Ms. Nolan on February 4
involved a discussion of Mr. Altman's Vacancy Act appointment,
application of the standards of conduct relevant to recusal and
Mr. Foreman's own view of a personal appearance standard for
recusal.
Mr. Foreman's discussion with Ms. Nolan was similar to the
types of discussions that take place daily between executive branch
ethics officials and the White House ethics expert on matters
invol ving Presidential appointees.
It does not appear to have
involved a violation of the standards of conduct.
2/4
Telephone call from Foreman to Nolan
In the follow-up telephone conversation that took place on
February 4, Mr. Foreman advised Ms. Nolan that he had contacted the
RTC ethics official and had scheduled a meeting with OGE to discuss
the recusal issue.
There was some discussion of Mr. Leach's
letter, portions of which would have been relevant to Mr. Foreman's
and Ms. Nolan's discussions about recusal. As noted with respect
to the telephone discussion that took place between Mr. Foreman and
Ms. Nolan earlier the same day, the discussion was of a routine
nature for employees with their respective ethics responsibilities.
It does not appear to have involved a violation of the standards of
conduct.
2/8
Telephone call between Hanson and Nussbaum
Ms. Hanson's thanks to Mr. Nussbaum for information about the
Independent Counsel's charter does not appear to involve a
violation of the standards of conduct.
2/9
Telephone call from Foreman to Nolan
In the February 9 follow-up on his previous telephone
conversations with Ms. Nolan, Mr. Foreman asked whether the recusal
to which Ms. Tigert had agreed in the course of her confirmation
hearings
should
affect
Mr.
Altman's
recusal
decision.
Mr. Foreman's call to coordinate recusal policy with the
Whi te House ethics expert does not appear to have involved a
violation of the standards of conduct.
Week of 2/14-18
Telephone call from Podesta or Stern to Steiner
Mr. Steiner recalls that, during the week of February 14
through 18, he engaged in a telephone conversation with either Mr.
Podesta or Mr. Stern and that one of them asked how the RTC had
come to hire Mr. Stephens to handle the Madison case.
Mr.
The Honorable Lloyd Bentsen
Page 24
Steiner's role as the recipient of this inquiry does not appear to
have involved a violation of the standards of conduct.
Messrs.
Podesta and Stern were not interviewed.
Week of 2/14-18
Telephone call from Steiner to Podesta or Stern
Mr. Steiner recalls that during the week of February 14
through 18, he responded to Mr. Podesta~s or Mr. Stern's earlier
inquiry by advising them that Mr. Stephens had been selected in
accordance with normal procedures by a panel which reviews bids.
This seems to be information about the award of an RTC contract
that the agency would have provided to any member of the public.
Thus, Mr. Steiner's response does not appear to have involved a
violation of the standards10f conduct.
I
2/16 or 17 Meeting between Steiner and Stephanopolous
Mr. Steiner recalls a discussion with Mr. Stephanopolous on
the Crime Bill and other issues that took place in the White House
on February 16.
In the course of the conversation, he sought
Mr. Stephanopolous' opinion about Mr. Altman's possible recusal.
Mr. Stephanopolous does not recall the discussion.
Since
Mr. Altman was free to discuss his thoughts on recusal with
whomever he pleased, his subordinate's participation in those
discussions does not appear to involve a violation of the standards
of conduct.
2/23
Telephone call from Eggleston to Ranson
In the telephone call placed by Mr. Eggleston during the week
of February 14, he cautioned Ms. Hanson to be prepared with an
appropriate answer in case Mr. Altman were to receive a question
about the February 2 meeting during the Oversight Board hearings
scheduled for the following week.
Ms. Hanson's role as the
recipient of this caution does not appear to involve a violation of
the standards of conduct.
2/23
Telephone call from Steiner to Griffin
Mr. Steiner's telephone call on February 23 to advise the
White House that Mr. Altman might announce during the next day'S
hearings that he was stepping down as CEO conveys information
relating to a Vacancy Act Presidential appointment that the
White House should be made aware of. It does not appear to involve
a violation of the standards of conduct.
2/23
Telephone call from Altman to Ickes
Mr. Altman's calion February 23 to advise Mr. Ickes that he
would announce during the next day's hearings that he would be
stepping down as CEO upon the expiration of his Vacancy Act
The Honorable Lloyd Bentsen
Page 25
appointment was an appropriate communication for a Presidential
appointee. Mr. Ickes' understanding of this telephone conversation
was that Mr. Altman was talking about recusal. The call, in either
event, does not appear to involve a violation of the standards of
conduct.
2/23
Telephone call from Ickes to Steiner
The exchange that took place during this telephone
conversation on February 23 was the result of a return call made by
Mr. Ickes to continue the above conversation with Mr. Altman. The
call was transferred to Mr. Steiner in Mr. Altman's absence. The
only way we can reconcile the two accounts of the conversation that
took place is to assume that, because of his involvement in prior
recusal discussions, Mr. Ickes thought Mr. Altman's previous call
had been about recusal, whereas Mr. Steiner understood correctly
that Mr. Altman had been discussing "stepping down" at the
termination of his Vacancy Act appointment. Mr. Steiner's role as
the recipient of information to be conveyed· to Altman does not
appear to involve a violation of the standards of conduct.
2/23
Telephone call from Hanson to Nussbaum
Ms. Hanson stated that, pursuant to Mr. Altman's request, she
called Mr. Nussbaum to tell him that Mr. Altman would be stepping
down as CEO of the RTC at the end of March. This telephone call
regarding the termination of Ms. Hanson's superior's Vacancy Act
appointment does not appear to involve a violation of the standards
of conduct.
2/25
Telephone call from Steiner to Podesta
Mr. Steiner recalls that the telephone call he made
February 25 was for the purpose of advising Mr. Podesta that
Altman was again conSidering recusal.
Mr. Steiner's role
conveying this information to Mr. Podesta does not appear
involve a violation of the standards of conduct.
2/25
on
Mr.
in
to
Telephone call from Steiner to Podesta
According to Mr. Steiner, the second telephone call he made to
Mr. Podesta on February 25 was for the purpose of reporting, after
the fact, that Mr. Altman had announced his recusal. This factual
report by Mr. Steiner does not appear to involve a violation of the
standards of conduct.
2/25
Telephone call from Stephanopolous to Steiner
On February 25, while Mr. Altman was in his office, Mr.
Steiner received a telephone call from Mr. Stephanopolous who
expressed his concern about the manner in which Mr. Altman had
The Honorable Lloyd Bentsen
Page 26
announced his recusal and about the circumstances under which Mr.
Stephens had been chosen.
Mr. Steiner understood that Mr.
Stephanopolous was concerned that Mr. Stephens' involvement in the
Madison case was a conflict of interest, given Mr. Stephens' vocal
criticism of the Administration. Mr. Steiner's response to the
concern about Mr. Stephens was to explain to Mr. Stephanopolous how
Mr. Stephens had been selected, a fact he had ascertained in order
to respond to a prior inquiry from either Mr. Podesta or Mr. Stern.
Mr. Steiner recalls that he advised Mr. Stephanopolous it would be
unwise to raise the issue of conflicts any further.
Just as in response to the previous inquiry from Mr. Podesta
or Mr. Stern on the same matter, the information that Mr. Steiner
conveyed to Mr. Stephanopolous about Mr. Stephens' selection by the
RTC seems to be information about a contract award that the agency
would have provided to the public. Mr. Steiner's role in providing
that information and any subsequent advice he may have offered
regarding the Stephens contract would not appear to involve a
violation of the standards of conduct.
2/25
Telephone call from Stephanopolous and Ickes to Altman
Mr. Altman learned in this telephone conversation with
Messrs. Stephanopolous and Ickes on February 25 that they felt he
should have advised the White House before announcing his recusal
to a reporter. According to Mr. Altman, he was also asked about
Mr. Stephens' appointment. He did not know who Mr. Stephens was
and the ensuing conversation involved Mr. Stephanopolous explaining
Mr. Stephens' background.
Mr. Altman's participation in this
telephone conversation does not appear to involve a violation of
the standards of conduct.
2/25
Telephone call from Eggleston to Hanson
Ms. Hanson's role in this telephone call received from
Mr. Eggleston on February 25 was as the recipient of an inquiry as
to whether Mr. Stephens was the lead attorney for the law firm
representing RTC on the Madison matter.
Her response that she
would check into the matter does not appear to involve a violation
of the standards of conduct.
2/25
Telephone call from Lindsey to Altman
During the telephone call Mr. Lindsey placed on February 25,
Mr. Altman was asked about a press inquiry regarding Mr. Altman's
possible receipt of instructions to provide a briefing to the
President's personal lawyer.
He told Mr. Lindsey about the
February 2 meeting, that he had not received any such instructions
and that no such briefing had taken place. Mr. Altman was asked by
Mr. Lindsey to handle the reporter's inquiry.
Mr. Al tman' s
explanation of what occurred during and as a consequence of the
The Honorable Lloyd Bentsen
Page 27
February 2 meeting does not appear to involve a violation of the
standards of conduct.
2/25
Telephone call from Nolan to Foreman
In the course of a telephone conversation on another matter
that occurred in February 25, Mr. Foreman suggested that Ms. Nolan
might wish to see Mr. Altman's testimony from the prior day and he
explained that Mr. Altman had been given Mr. Kusinski's memorandum
Neither the suggestion Mr. Foreman made nor the
on recusal.
explanation he provided appears to involve a violation of the
standards of conduct.
3/1
Telephone call from Podesta to Altman
In the telephone conversation that occurred on March 1,
Mr. Altman received an inquiry from Mr. Podesta regarding the fact
that, in his testimony on February 24 he had not mentioned the two
Fall meetings between Treasury and White House officials.
This
discussion, which also may involved Ms. Hanson, raises no standards
of conduct issues.
Additional contacts
The chronology of contacts provided by Mr. Cutler as part of
his testimony before the House Banking, Finance and Urban Affairs
Committee on July 26 indicates that, in the days preceding the
February 24 hearing, there may have been two additional contacts
between Messrs. Steiner and Podesta that are not reflected in the
report.
One contact may have involved Mr. Steiner advising Mr.
Podesta that Mr. Altman was considering announcing in his opening
statement at the hearing that he expected to step down as CEO of
the RTC on March 30. Any such contact would appear to be similar
to that which took place between Mr. Steiner and Ms. Griffin on
February 23 and would not seem to involve a violation of the
standards of conduct.
The other contact may have involved Mr.
Podesta speaking to Mr. Steiner to ensure that Mr. Altman was
adequately prepared for any questions about the February 2 meeting
that might arise during the hearing. Any such contact would appear
to be similar to that which occurred between Ms. Hanson and Mr.
Eggleston on February 23 and would not appear to involve a
violation of the standards of conduct.
I trust this analysis is of use to you in reaching your own
conclusions.
Sincerely,
~~
tephen D. Potts
Director
neasurylWhite House Contacts
Regarding
Madison Guaranty
Savings and Loan
vol I
Office of Inspector General
Department of the Treasury
DEPARTMENT OFTHETREASURY
WASHINGTON. DoC. aazao
luly 29, 1994
Mr. lloyd Bentsen
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Room 3330
Washington, D.C. 20220
Dear Mr. Bentsen:
On March 3, 1994, you requested the Office of Government Ethics (OGE), to conduct an
investigation to detennine the ethical propriety of contacts made between officials of the
Resolution Trust Corporation (RTC), the Treasury Department. and the White House, with
respect to RTC's worle at Madison Guaranty Savings and Loan Association. The enclosed
report has been submitted to OGE in response to your request.
OGE will respond directly to you with their opinion. 'Ibis report provided to you con1ains
exhibits which have been redacted to protect legal privileges of the Resolution Trust
Corporation relating to the criminal investigation. Therefore, this report is available for
public release.
The investigative staffs of both the Treasury Inspector General aDd the RTC Inspector
General are available if you have any questions regarding the enclosed material.
Sincerely,
/W/[u2A-Robert P. Cesca
Inspector General
Resolution Trust Corporation
Enclosure
Deputy Inspector General
Department of the Treasury
EXECUTIVE SUMMARY
PURPOSE
This was a joint investigation conducted by the Offices of the Inspectors General
(OIG) of the Department of the Treasury and the Resolution Trust Corporation
(RTC). The purpose was to provide the facts necessary for the Office of the
Government Ethics (OGE) to advise the Secretary of the Treasury on the
application of the standards of ethical conduct for executive branch officials to the
conduct of Department of Treasury officials in their contacts with White House
officials regarding the RTC's resolution of maners involving Madison Guaranty
Savings and loan Association (Madison) beginning in the fall, 1993.
BACKGROUND
On March 3, 1994, Secretary Bentsen sought the views of the aGE as to whether
any ethics or conflicts of interest issues were raised by the facts and
circumstances surrounding meetings between Treasury and White House officials
pertaining to an RTC criminal referral(s) relating to Madison Guaranty Savings &
Loan. OGE is not an investigatory agency. Therefore, the Secretary requested the
Treasury OIG to conduct such an investigation for the OGE.
On March 4, 1994, Independent Counsel Robert Fiske subpoenaed a number of
individuals who had been present at those meetings. Mr. Rske met with aGE and
he subsequently wrote to the OGE indicating that the administrative investigation
necessary to respond to Secretary Bentsen would be detrimental to his
investigation. Mr. Fiske also communicated the same information to Treasury OIG.
The Inspectors General of Treasury and RTC agreed to begin the administrative
investigation after Mr. Fiske completed his own criminal review of the alleged
TreasurylWhite House contacts. OGe stated that upon receiving an investigative
report. it would provide the Secretary with its findings.
On June 30, 1994, Mr. Fiske announced that he had completed the portion of his
investigation related to the contacts between White House and Treasury officials
concerning the RTC and its work with respect to Madison. On July 1, 1994, the
Offices of the Inspectors General from the Department of the Treasury and the
RTC initiated a joint investigation. That day, the OIG received copies of 6,000
Treasury documents provided to the Independent Counsel. On July 7, 1994, the
White House provided redacted copies of 1,500 documents.
During the period covered by this investigation, RTC was headed by Roger Altman,
Deputy Secretary of the Treasury, acting in the capacity of interim Chief Executive
Officer (CEO) of RTC. Following the departure of RTC's prior CEO, and at the
recommendation of the Treasury Department, the President appointed Altman to
serve as CEO of RTC effective March 16, 1993. The appointment was made
under the terms of the Vacancy Act (5 U.S.C. 3347)' which provides that when
the head of an executive agency dies, resigns, or is sick or absent, the President
may direct another executive officer. who has been appointed by the President
with the advice and consent of the Senate, to perform the duties of the vacant
office until a successor is appointed. Mr. Altman's term as RTC's interim CEO was
originally due to expire on July 14, 1993. However, after the individual who had
been nominated to become the new CEO withdrew his name from consideration,
and in accordance with the provisions of the Vacancy Act, Altman's term was
extended until March 30, 1994.
While serving in his temporary appointment as RTC's interim CEO, Altman
maintained his responsibilities as Deputy Secretary of Treasury. In his testimony,
Altman indicated that during his tenure as interim CEO, he spent an average of 3
hours a week at RTC, mainly attending biweekly luncheon meetings. He testified
that RTC Senior Vice Presidents William Roelle and Lamar Kelly were responsible
for RTC's day-to-day operations. According to Altman, his decision-making role
with respect to RTC was limited to broad public issues, such as legislation,
Congressional testimony, and filling senior RTC positions. He indicated that all
other decisions were the responsibility of Roelle and Kelly.
According to Altman, none of his staff at Treasury were given any responsibility or
had any authority to make decisions for RTC. However. he said some Treasury
staff, including General Counsel Jean Hanson, did serve in an advisory capacity to
him on RTC matters. He said he did not require RTe employees to report to his
Treasury staff. However, two former RTC employees who served as Acting
General Counsel of RTC while Altman was interim CEO, indicated that in practice.
they reported to Hanson, rather than to Altman. Additionally, the Director of
RTC's Office of Corporate Communications. Steven Katsanos, indicated that after
Altman became interim CEO, he was directed to report significant RTC press issues
to Treasury's Public Affairs Office.
Roelle indicated that while Altman was interim CEO, he viewed Altman as his boss
and therefore reported directly to him, especially on high profile RTC cases.
RESULTS
During our investigation, conducted between July 1, 1994 and July 29, 1994, six
employees of RTC, nine current or former employees of Treasury, one OGE
employee and ten current or former White House officials were Interviewed under
oath. Through their testimony and through the review of documents obtained from
the RTC, Treasury and the White House, the investigation identified 40 contacts
between Treasury officials and the White House on this matter. (Exhibit 1) These
contacts consisted of meetings, telephone calls and facsimile transmissions. A
name list identifying all of the individuals named in the chronology is attached.
(Exhibit 2) The attached chronology details these contacts and the relevant events
surrounding them. The chronology references pertinent portions of the transcripts
of interviews conducted during the investigation. Documents pertinent to our
inquiry, are attached as Exhibits 3 through 52.1
I
Upon completion of the investigation, the testimony of the
witnesses was reviewed to determine the propriety of release under
the Freedom of Information Act. The RTC Office of General Counsel
identified certain information regarding the specifics of the
criminal referral which required redaction to protect the legal
privileges of the RTC. In addition to the information redacted,
the RTC General Counsel contended that information concerning
witnesses was privileged and should be redacted.
The RTC and
Treasury Offices of Inspectors General determined that this
redaction could not be done because the identity of these
witnesses, President and Mrs. Clinton, went to the heart of the
events being investigated, has been confirmed in the public
testimony of White House Counsel Lloyd cutler and goes only to the
issue of status as wi tnesses and does not reveal information
concerning the merits or subjects of the referral.
CHRONOLOGY OF WHITE HOUSE CONTACTS
9/23/93
James Dudine, Director, Office of Investigations, RTC, stated that he
advised Steve Katsanos, Director, Office of Corporate
Communications, RTC, that RTC had criminal referrals relating to the
collapse of Madison Guaranty about ready to go and that
Sue Schmidt, Reporter, Washington Post, was getting close to
something. (Dudine, pgs. 20-22)
9/93
Dudine indicated that sometime during this period at a weekly briefing
on PlS matters, he apprised Bill Roelle, then Senior Vice President of
RTC, and Glion Curtis, then Acting General Counsel of RTC, that RTC
had criminal referrals ready to go and that reporters were asking
Questions, although they didn't know about the referrals at this point.
Roelle instructed the staff to make the referrals as fast as they could
and to handle them in a normal manner. (Dudine, pgs. 20 and 22)
9/27/93
Dennis Cavinaw, Vice President, Kansas City (KC) Regional Office,
faxed to Roelle a brief synopsis of the criminal referrals. (Roelle, pgs.
8-11 )
Roelle stated that he called Roger Altman, Deputy Secretary of
Treasury and then Acting CEO of RTC, to advise him of the criminal
referrals relating to Madison Guaranty. Roelle stated that he started
describing each referral, but Altman stopped him after about five
minutes and told him that he really didn't understand what this was
all about and that he would have Jean Hanson, General Counsel,
Treasury, call him to get the information. Roelle explained that he had
called Altman because the referrals mentioned the Clintons and it was
RTC policy to keep the CEO informed of high profile cases. He noted
on a 1992 criminal
that he had previously briefed RTC's prior
referral relating to Madison (Roelle, pgs. 1-13'.
ceo
Altman stated that he had no recollection of telling Roelle to contact
Hanson. (Altman (1 I, pg. 221
Indicates no specific date.
1
Roelle stated that sometime later that day, he spoke telephonically to
Hanson and advised her that RTC was preparing criminal referrals
relating to Madison which named the Clintons as witnesses. Hanson
asked Roelle what he thought the consequences of the referrals would
be. Roelle indicated he told Hanson he did not know. and explained
to her, "I'm just telling you guys because it's my duty to report to the
CEO." Roelle said he advised Hanson to "Just let it go. You know, I
mean, you can't do anything. You're being told this so you'll be
notified, so just forget it. It will do what it's going to do and take its
course.· (Roelle, pgs. 12-13 and 31)
Hanson related the following concerning her telephone conversation
with Roelle:
•
Although she couldn't recall the exact words that were used,
she "understood from the conversation that information relating
to these referrals would be leaked to the press when the
referrals reached Washington.· Hanson said Roelle indicated
the leak would come from RTC. (Hanson (1), pgs. 26 and 3031 )
•
She took notes during her conversation with Roel/e. She stated
that she disposed of her notes sometime last fall after the press
actually printed the story. (Hanson (1), pg. 31)
•
She could not recall receiving any advice from Roelle on the
proper handling of the criminal referrals. (Hanson (1), pg. 361
•
Hanson did not recall asking Roelle what the consequences of
the referrals would be. (Hanson (1) pg. 38)
Roelle stated, in response to a Question regarding whether there was
an expectation that the referrals might be leaked in some form or
fashion, that there was always an expectation of that. He stated that
"Everything was leaked here (RTC).· (Roelle. pgs. 15 and 34)
Roelle stated that he advised Hanson that no one else in Treasury,
except for Altman, should be made aware of this information. Roelle
also advised Hanson that these referrals should be kept confidential.
(Roelle. pgs. 20-26)
When asked if he was concerned with what Altman might do with the
information, Roelle stated: Itl never dreamed they would discuss it
2
with the White House. I was concerned they might talk it over at
Treasury and then it would get out. My concern was that it would
get talked around Treasury, and it would get leaked, and everybody in
the world would know about it ... .1 never said don't talk to anybody at
the White House because it never occurred to me they would."
(Roelle, pg. 28)
Roelle stated that he considered the information pertaining to the
criminal referrals to be non-public. (Roelle, pgs. 41 and 42)
Dudine stated that he considered the information pertaining to the
criminal referrals to be non-public. (Dudine, pgs. 33-38)
According to Dudine, "Unless directed by Counsel, in connection with
one of our civil matters, any disclosure of any investigative matter is
prohibited without my authorization". (Dudine, pg. 35)
Reference is made to RTC memorandum dated 6/17/93, from Dudine,
subject criminal referrals Section 3 § 1, "All referrals are sensitive and
must be handled with appropriate confidentiality." (Exhibit 3)
Altman recalled that in the Fall of 1993 Hanson or Roelle, or both,
advised him there may be a criminal referral which could mention the
President and the First Lady. He believed the information was brought
to him because of potential publicity. He told either Hanson or Roelle
that the matter should be handled in accordance with normal RTC
procedures. He did not recall directing anyone to contact the White
House. (Altman (1), pgs. 19-22 and 28-29)
Shortly after her conversation with Roelle concerning the criminal
referrals, Hanson stated that she went to Altman's office and related
the substance of the conversation she had with Roelle. Hanson
indicated that at some point in the conversation it became "clear to
me that I had the responsibility of notifying Mr. Nussbaum that these
referrals were likely to be leaked." (Hanson (1), pg. 35)
9/29/93
Meeting at the White House with Hanson, Nussbaum, Clifford Sloan,
White House Associate Counsel.
According to Hanson, following a meeting at the White House
regarding the WACO matter, she advised Bernard Nussbaum, then
White House Chief Counsel, of the existence of the referrals that were
gOing to be leaked to the press, including her understanding that the
President and Mrs. Clinton were named in the referrals solely as
3
possible witnesses. (Hanson (11. pg. 41)
According to Nussbaum, following the WACO meeting, Hanson pulled
Nussbaum aside and advised him that there might be press inquiries
concerning a possible criminal referral out of the RTC KC Office of
Investigations. Hanson stated that the Clintons were not an object or
subject of the investigation, but that the Clintons could be possible
witnesses in this investigation. Hanson indicated that she was
informing him so the White House would be prepared to respond in
the event of press inquiries. She stated that based on leaks which
had occurred in the past, it was likely that the referrals would be
leaked and that press inquiries would be received. At this point in the
conversation, Nussbaum said he called Sloan into his office and asked
Hanson to tell Sloan what she had just told him. Nussbaum said he
instructed Sloan to work with Hanson on press inquiries relating to
Madison. During their conversation, Nussbaum said Hanson indicated
that Altman may have previously sent him some materials on the
subject. Nussbaum said he told Hanson he had no recollection of
receiving any such materials from Altman. Nussbaum said he later
learned that Hanson called Sloan to tell him she had been mistaken,
and that Altman had not provided any materials on the subject.
Nussbaum stated that his files reflected that in March 1993, he
received via fax from Altman a New York Times article by Jeff Gerth
on Whitewater. (Nussbaum, pgs. 8-12)
Sloan recalled that during the meeting, Hanson stated that there had
been a criminal referral and that the Clintons were mentioned as
potential witnesses. (Sloan, pgs. 7-8)
Nussbaum and Sloan recalled that Hanson related some additional
details concerning the criminal referral that Hanson did not recall
discussing. (Nussbaum, pg. 9; Sloan, pg. 8; Hanson, pg. 41)
Hanson stated: "When I left the meeting, I felt that I had fulfilled my
responsibility as authorized by Mr. Altman as the interim CEO to relay
to Mr. Nussbaum that there were likely to be press leaks on a story
that would affect the Office of the President." (Hanson (1), pg. 60)
Hanson stated that "the information was conveyed lawyer-to-Iawyer
to apprise Mr. Nussbaum in his capacity as the senior lawyer for the
Administration, that he could expect to receive press inquiries on an
issue that could affect the Office of the President." (Hanson (2), pg.
35)
Altman stated he had no knowledge of this meeting until after his
February 24th testimony before Congress. (Altman (1), pgs. 52-53)
9/30/93
The Following item appeared in an RTC Early Bird:
The Rose Law Firm's alleged undisclosed
conflicts of interest, and internal RTC
sources' suggestions that multiple referrals
to the Justice Department link the firm's
members, friends, and loans to insolvent
S&Ls, are being pursued by the Washington
Post and the Associated Press.
-- Steve Katsanos
Hanson stated that Roelle faxed a copy of the RTC Early Bird to her,
on or about 9/30/93, and it was Hanson's understanding that it
pertained to the criminal referrals and the Clintons, not the Rose Law
Firm. In a memorandum dated 9/30/93 to Roger Altman, titled -The
Rose Law Firm, - Hanson wrote that she had spoken to Secretary
Bentsen, Nussbaum, and Sloan. She had asked Roelle to keep her
informed and asked Altman -Is there anything further you want me to
do 171- Attached to the memorandum was the RTC Early Bird dated
9/30/93. (Exhibit 4)
When questioned concerning this memorandum, Hanson
acknowledged it was her work product, but she could not recall
preparing it. She advised that the subject of her memorandum, the
Rose Law Firm, was a code for the criminal referrals on Madison.
Although referenced in the memorandum, she did not recall speaking
with the Secretary on the matter. (Hanson (1), pg. 59)
Altman said he did not recall receiving Hanson/s memorandum and did
not recall the 9/30/93 Early Bird. He noted that the Early Bird was
published frequently and he never read it very carefully. Altman also
said he had no recollection of asking Hanson to contact the White
House or the Secretary on the matter. (Altman (1), pgs. 5-6)
Secretary Bentsen said he did not recall any discussion or
conversations with Hanson or Altman on 9/30/93 on any of these
issues or the Rose Law Firm. He also stated that he had never seen
the 9/30/93 ATC Early Bird. (Exhibit 5)
5
Hanson stated that she faxed a copy of the Early Bird to Sloan.
However, she did not recall when that occurred or which Early Bird it
was. (Hanson (1 I, pg. 75)
Sloan said he did not receive a copy of the Early Bird from Hanson,
but did recall a telephone conversation in which he and Hanson
discussed the Early Bird. Sloan's notes from his telephone
conversations with Hanson are attached. (Sloan, pgs. 16-25)
(Exhibit 6)
10/6/93
Hanson stated that Roelle called her and advised her that Schmidt
contacted RTC KC Office of Investigations and requested the names
and telephone numbers of the investigators. The request was denied
by the RTC KC Office of Investigations. Hanson stated that she may
have conveyed this information to Altman. (Hanson (1)' pgs. 72-73,
75)
Altman stated he did not recall receiving information pertaining to
SChmidt contacting RTC KC Office of Investigations and her wanting
names and telephone numbers of the investigators. (Altman (2), pgs.
10-" )
10/7/93
Roelle stated that, during a scheduled RTC meeting at the Treasury
building, he advised Altman of press inquiries relating to the criminal
referral. According to Roelle, during his meeting with Altman, Altman
called Hanson and told Hanson to notify" Jack (DeVore), the
Secretary, Bernie, and some other names I can't recall." (Exhibit 7)
Altman stated that he did not recall a meeting at which he asked
Hanson to call DeVore, Nussbaum and Secretary Bentsen. (Altman
(2), pgs. 11-13)
When asked if she remembered Altman telling her, while Roelle was
present, that she had better let some people know about the pending
press inquiries on criminal referrals, including DeVore, Nussbaum and
Secretary Bentsen, Hanson stated: "No." (Hanson (2), pg. 41)
According to Hanson, she spoke to Sloan to give him the follow-up on
the development of the press inquiries. (Hanson (1) pg. 74}
Sloan stated that he had spoken to Hanson on the phone regarding
the press inquiries. Sloan's notes from this telephone conversation are
attached. (Sloan, pgs. '6-30) (Exhibit 6)
,
'0/8/93
Dudine stated that the RTC referrals (criminal referrals relating to
Madison Guaranty) were submitted to the U.S. Attorney's Office and
FBI in Little Rock, Arkansas. (Dudine, pg. 27)
10/11/93
According to DeVore, he received a call from Jeff Gerth, Reporter,
New York Times. Gerth said RTC was investigating Madison
Guaranty and there were checks involving a 1985 fundraiser for
Governor Clinton. Gerth felt the investigation was unusual because it
had been referred to Washington for review rather than being directly
referred to the U.S. Attorney's Office in Little Rock, Arkansas.
Additionally, he indicated it had not yet been forwarded on to the U.S.
Attorney in Little Rock. (DeVore, pgs. 9- 1O~
10112/9310/13/93
According to Steiner, DeVore advised him of the press inquiry from
Gerth. Either Steiner or DeVore consulted with Hanson. One of the
three suggested that the White House be contacted. (Steiner, pgs.
10-13)
Hanson stated that she went to Altman's office to meet with DeVore
and Altman. DeVore advised of press inquiries pertaining to Madison
Guaranty S&L. They discussed the fact that criminal referrals did
exist. (Hanson (1), pg. 77)
Altman stated that he did not remember any meetings held in his
office with DeVore and Hanson. Altman also stated that he did not
recall that DeVore advised him that the criminal referral had been
either sent or referred. Altman stated that he didn't know how
DeVore would have known that. (Altman (2), pgs. 13-14)
DeVore stated that although his calendar reflected that he was
scheduled to attend a meeting in Altman's office, to prepare for the
White House meeting, he did not recall attending such a meeting and
thought it had been cancelled. (DeVore, pg. 31)
According to Katsanos, DeVore called him in mid-October and advised
him of the press inquiry from Gerth. DeVore advised Katsanos that he
was going to be meeting with Mark Gearan, White House Director of
Communications, and asked whether the referrals had been sent or
whether they were still being prepared. Katsanos indicated that after
checking, he advised DeVore that the referrals had been sent on
October 8, 1993. (Katsanos (1), pgs. 43, 50-52)
7
According to Nussbaum, Gearan advised him that DeVore called to set
up the 10/14/93 meeting on how Treasury or RTe was going to
respond to press inquiries pertaining to the criminal referrals to the
Department of Justice (DOJ). (Nussbaum, pgs. 17-18)
Gearan stated that he did not remember receiving a telephone call
from DeVore to arrange a meeting nor did he make arrangements for
the meeting. (Gearan, pgs. 12-13)
DeVore stated that he spoke to Gearan, but not for the purposes of
arranging the meeting. He stated that he believed that, after learning
there was going to be a meeting, he talked to Gearan to tell him it
was important that Gearan attend. DeVore stated that he learned of
the meeting from Steiner. (DeVore, pgs. 11-13)
Steiner stated that he could not recall who set up the meeting.
(Steiner, pgs. 11-14)
10114/93
Meeting in Nussbaum's Office - White House: Nussbaum, Sloan,
Gearan, Eggleston and Bruce Lindsey, Senior Advisor to the President;
Treasury: DeVore, Steiner and Hanson.
Nussbaum stated that during the meeting, DeVore advised them of
the questions Gerth had raised in his October 11, 1993, call to
DeVore. DeVore indicated that Gerth was asking about four checks
from Madison to the Clinton gubernatorial campaign and had inquired
about the endorsements of the four checks. Additionally, according
to Nussbaum, DeVore told the group that Gerth was asking why the
referral had been sent from Kansas City to Washington D.C., rather
than directly to Little Rock. Nussbaum said that DeVore told the
group that he was going to confirm to Gerth that there was a criminal
referral and that the referral had been sent to Little Rock before Gerth
had ever called. Nussbaum recalled that some discussion ensued
regarding whether a criminal referral should be confirmed to the press.
According to Nussbaum, DeVore indicated to the group that he
believed it was normal procedure to confirm criminal referrals in
response to press inquiries. (Nussbaum pgs 18-21) Nussbaum also
recalled that there was some discussion at the meeting regarding an
ATC Early Bird which indicated in some fashion that the press could
be inquiring about the criminal referral. Nussbaum was under the
impression that the Early Bird was an RTC document which was
distributed to all RTC employees. (Nussbaum, pgs. 22-23)
Gearan indicated that there was a discussion of press inquiries made
by Gerth and by SChmidt. There was some mention during the
meeting that Schmidt had been to see the RTC investigator who was
working on the referrals. (Gearan, pgs. 7-91 (Exhibit 8)
Based on a review of his notes, Gearan indicated that discussions in
the meeting included: (1) Jean lewis, Chief Investigator, RTC, the
criminal referrals sent from regions to D.C. 3 weeks ago; (2) last
Friday, referred to U.S. Attorney in lin Ie Rock; (3) Sue Schmidt, HRC
(Mrs. Clinton], Rose Law Firm retained for 85 by Madison Guaranty;
(4) Jeff Gerth, cashiers checks in criminal referrals, checks 4/4 or 5,
1980, two payable to BC (Bill Clinton], two payable to Be campaign,
each for $3,000. Be is not a target of investigation according to
Gerth. (Gearan, pgs.7-8) (Exhibit 8)
DeVore indicated that the meeting was held in reaction to the inquiry
from Gerth. During the meeting, he shared details of his conversation
with Gerth. Additionally, he learned during the meeting that
Sue Schmidt of the Washington Post and an AP reporter whose name
he did not recall, were "chasing" similar stories. In addition, he
recalled that during the meeting someone related that the criminal
referral had been made on October 8. According to DeVore, he was
not aware of this fact prior to the meeting. (DeVore, pgs. 14, 17, and
18)
DeVore stated that he believed that all the information shared with the
White House was public because a reporter had it. (DeVore, pg. 45)
lindsey stated that the purpose of the meeting was to discuss a
telephone call DeVore received from Gerth, New York Times. Lindsey
stated that, during the meeting they discussed the RTC Early Bird, the
criminal referrals and what the press was saying about them, and how
DeVore was to respond to Gerth. (lindsey, pgs. 8-16)
Eggleston stated that it was his understanding that this meeting had
been called by DeVore, because he had gotten press inquiries from
Gerth. Eggleston stated that DeVore discussed the checks that Gerth
had, Gerth's questions about the criminal referral, and baSically how
to deal with the press. (Eggleston, pgs. 5-9)
Steiner stated that during the meeting it was decided that DeVore
would advise the reporter that the criminal referral had been sent.
Steiner also believed that Gerth was told that the 10/14/93 White
House meeting had taken place. (Steiner, pg. 24)
,
DeVore indicated that the only decision or conclusion reached at the
meeting was his personal decision to contact Gerth and correct him
by advising that the referrals had been forwarded. DeVore indicated
he did subsequently call Gerth and "set him straight" on the fact that
the referrals had been sent. (DeVore, pgs. 17-19)
According to Hanson, DeVore confirmed to the press that the criminal
referrals had been referred to DOJ. Hanson stated that DeVore
understood that Treasury OIG did confirm referrals to DOJ. Hanson
stated that DeVore released the information to the press prior to her
confirming the Treasury OIG policy on disclosure of information
pertaining to criminal matters. (Hanson (1), pgs. 97-99, 113)
Altman stated he had no knowledge of the 10/14/93 meeting at the
White House until after his 2/24/94 testimony before Congress.
(Altman (1), pgs. 52-53)
10/14/94 or
10/15/93
Steiner indicated that within a day or two of the 10/14/93 meeting,
he believed he went to see the Secretary to tell him the meeting had
taken place. Steiner recalled that during their discussion, he told the
Secretary a press inquiry had been received concerning Madison
Guaranty. The Secretary asked him where Madison was located.
Steiner said he clearly recalled this, because he did not know the
answer to the Secretary's question. Steiner indicated that when the
Secretary posed the question, Steiner stopped the discussion because
he realized he did not know much about the subject. (Steiner, pgs.
24-26)
According to Curtis, he met with Hanson and John Bowman, Treasury
Assistant General Counsel for Banking and Finance, sometime in
October. Hanson's calendar indicated this meeting occurred at
5:00 p.m. on 10/14/93. During the meeting, Curtis said he showed
them a copy of a legal opinion summarizing the criminal referrals on
the Madison case. According to Curtis, "I showed them the copy I
had and they made a copy from that, I recall." (Curtis-revised, pg 26).
Bowman said he met regularly with Curtis and Hanson but did not
recall any meeting during which the substance of the criminal referral
was discussed. Further, he said he was sure he had never seen the
legal opinion summarizing the criminal referrals. (Bowman, pgs. 1112)
10
Hanson said she met with Curtis numerous times, but did not recall
discussing issues pertaining to the criminal referral with him.
Additionally, she said she had never seen the legal opinion
summarizing the criminal referral (Hanson (1) pgs. 136-137).
During this time period, Hanson said she did recall at one point a
suggestion being made by DeVore that, due to the possibility of
continued press inquiries on the subject, Altman or Hanson should
read the referrals. She said she called Roelle on the subject, who told
her, "Jean, you don't want to do that" According to Hanson, she
concluded that it would have been "completely inappropriate for me to
read the criminal referrals, particularly before they went to the Justice
Department, but even after they went to the Justice Department." As
a result, Hanson said she had never seen anything in writing about the
criminal referrals. (Hanson pgs. 119-121)
10/20/93
Lindsey prepared a memorandum to file summarizing the 10/14/93
discussions concerning a telephone call that DeVore received from
Gerth. Lindsey's memorandum is entitled Whitewater Development
Corporation. (Exhibit 9)
10/31/93
According to Hanson, as a result of Schmidt's inquiries, an article in
the Washington Post was published (Lexis/Nexis report) with the
byline, "Susan Schmidt, Washington Post Staff Reporter," and the
headline of, ·U.S. Is Asked To Probe Failed Arkansas S&L, RTC
Questions Thrift's Mid-Eighties Check Flow" (Hanson (1),
pgs. 140-141) (Exhibit 10)
12129/93
Eugene Ludwig, Comptroller of the Currency, advised that during the
Renaissance weekend he was approached by the President.
According to Ludwig, "he said to me and this is not a quote, , don't
understand what all this fuss is about Whitewater; I haven't done
anything wrong, all I did was lose some money.· The President then
asked Ludwig for legal advice on regulatory aspects of
Madison/Whitewater. Ludwig stated that this conversation lasted 30
seconds.
After Ludwig met with the President, he telephonically contacted
Steiner in an effort to determine the following:
could he provide advice to the President on
Madison/Whitewater; and
11
to obtain an understanding of MadisonlWhitewater through
available public information.
Steiner recommended that Ludwig speak to Hanson on these issues.
Steiner advised Ludwig that since Hanson was the Chief Legal Officer
for the Department of Treasury, he felt that she was the appropriate
person to speak with on this matter. (Ludwig, pgs 7-9)
Ludwig contacted Hanson by telephone and she recommended that he
speak to Nussbaum for additional information. (Ludwig, pg. 9)
Hanson advised that she received a telephone call from Ludwig in late
1993 or New Year's weekend of 1994. Ludwig advised her that he
was at Renaissance weekend and the President asked him a question
regarding Madison. Ludwig did not provide Hanson with details of his
conversation with the President. According to Hanson, ludwig
contacted her to get an understanding "of what was happening in the
process." Hanson advised ludwig that she only knew what she read
in the press and apologized for not being more helpful. (Hanson (2)'
pgs.47-48)
According to Ludwig, he attempted to contact Nussbaum but was
unsuccessful. (ludwig, pgs. 10-11)
Sloan stated that he returned a call from Ludwig. Sloan stated that
Ludwig was at Renaissance weekend at the time. Ludwig told Sloan
that the President had mentioned something about the Madison
matter in the newspapers and Ludwig indicated that he (Ludwig)
wanted newspaper articles on the subject in case it came up in a
subsequent conversation with the President. Sloan relayed the
request to someone else in his office, but he did not think that any
materials were ever provided to Ludwig by the White House. (Sloan,
pgs. 47-49)
Eggleston stated that during the week between Christmas and New
Year's, he received a telephone call from Sloan. Sloan told Eggleston
that he had spoken to or received a message from LudWig. ludWig
was attending Renaissance weekend. Sloan told Eggleston that
ludwig had indicated that he had a conversation with the President in
which the Madison matter was raised. According to Eggleston, when
Sloan called, the two agreed that the President should not be talking
to Ludwig on the Madison matter. Eggleston indicated that he and
Sloan were concerned that, although Ludwig had nothing to do with
12
Madison, any conversation between the President and any regulator
on this matter could be misinterpreted. Therefore, Eggleston said he
paged Joel Klein, Deputy White House Counsel, who was attending
Renaissance weekend, and informed Klein of Ludwig's conversation
with the President. Eggleston told Klein he should tell Ludwig if he
saw the President again that they should not talk about Madison.
(Eggleston pgs 22-24)
After attempting to speak with Nussbaum, Ludwig was successful
with speaking to William Kennedy, of the White House Counsel's
Office. Ludwig's conversation with Kennedy was short, very cursory,
and fairly cautionary about MadisonlWhitewater. Kennedy suggested
to Ludwig that he should contact Klein. (Ludwig, pgs. 12-13)
Ludwig spoke to Klein, either telephonically or in person, at the
Renaissance weekend. Ludwig said that Klein was very negative
about the idea of Ludwig discussing MadisonlWhitewater with the
President. (Ludwig, pg. 13)
Ludwig stated that he thought about it overnight and concluded in his
own mind that "I really couldn't have any contacts on this with the
President." (Ludwig, pg. 14)
McLarty stated that Klein told him that Ludwig and the President had
a brief visit during Renaissance weekend in which the Madison issue
was discussed. Klein indicated to McLarty that he did not believe that
the communication between Ludwig and the President on this matter
was substantive. (McLarty, pgs. 16-17)
Ludwig did not recall discussing the Madison/Whitewater issue with
Sloan or Eggleston. (Ludwig, pg. 12)
12/30/93
Ludwig stated that he passed the President and Klein in the hall at the
Renaissance weekend and he advised them, ·1 don't think we ought
to talk about this. Ludwig recollected that the President and Klein
said the same thing and that was it." (Ludwig, pg. 15)
·1/94
Ludwig stated that sometime after the Renaissance weekend, he
telephonically contacted Maggie Williams to provide unsolicited advice
on Madison/Whitewater. Ludwig advised Williams to "have a lawyer
involved full-time and to disclose, disclose, disclose." (Ludwig, pg.
17)
13
*1/94
Altman made various handwritten notes relating to
Madison/whitewater. (Exhibit 1 1)
211/94
Hanson stated that she suggested recusal on the tolling agreement for
Altman was appropriate because he was a close, personal friend of
the President and Mrs. Clinton. (Hanson (1), pg. 154)
During a meeting with Michael Levy, Assistant Secretary, Legislative
Affairs, Frank Newman, Under Secretary of Treasury, and Altman,
Hanson stated that she discussed Altman's recusal from the civil case
pertaining to Madison Guaranty S&L. Hanson recommended Altman
recuse himself from the civil case and Altman concurred. (Hanson
(1), pgs. 151-152)
Altman stated he did not recall this meeting. (Altman (2), pg. 251
Hanson stated that she and Altman briefed Secretary Bentsen on the
statute of limitations issues concerning the civil case and Altman
advised Secretary Bentsen of his decision to recuse himself.
According to Hanson, Altman indicated to Bentsen that he wanted to
"tell the White House ". Hanson interpreted this to mean that Altman
would discuss both the statute of limitations issue and his recusal
with the White House. According to Hanson, Bentsen raised no
objection to them going to the White House. (Hanson (1), pgs. 153'54 and Hanson (2) pg. 4)
Altman stated that at some point before 2/2/94, he did discuss his
possible disqualification with Secretary Bentsen, but he didn't know
when. Altman stated that he remembers this because when he went
to the meeting, he advised the White House officials that the
Secretary had advised him to recuse himself. Altman stated he does
not believe he advised Secretary Bentsen that he would be meeting
with White House officials. (Altman (2), pgs. 26-27)
Secretary Bentsen stated that he recalled a discussion with Hanson
and Altman concerning the statute of limitation issue and that Altman
was considering recusing himself. Secretary Bentsen stated that it
would be Altman's personal decision. Secretary Bentsen stated that
he had no knowledge of the 2/2/94 White House meeting until he
learned about it from the press. (Exhibit 5)
Altman stated he spoke to Thomas McLarty, White House Chief of
Staff, to set up the 2/2/94 White House meeting. Although he could
14
not recall his precise words, Altman said he told McLarty of the
purpose of the meeting Win some fashion. WAccording to Altman, the
purpose of the meeting was to provide the White House with the
same information previously provided to Congress and the media on
the procedures RTC followed when there was an expiring statute of
limitations. He did not think it was inappropriate to provide such
information because (1) it had been provided to Congress and the
media and (2) because it could affect the operations of the White
House. (Altman (2), pg. 25)
McLarty stated that he did not recall Altman calling him to arrange the
meeting. He believed that Harold Ickes, Deputy Chief of Staff, White
House, arranged the meeting in response to a call from Altman.
(McLarty, pgs. 8-9)
Ickes stated that Altman telephoned him to set up a meeting with
him, Hanson and McLarty. Ickes could not recall the purpose for the
meeting. (Ickes, pgs. 7-15)
Altman could not recall speaking to Ickes on 2/1/94. (Altman (2),
pgs. 25-26)
2/2/94
Meeting at the White House - White House: Nussbaum, Eggleston,
Ickes, Maggie Williams, Chief of Staff to the First Lady; Treasury:
Altman, Hanson
Hanson stated that she prepared talking points for the 2/2/94
meeting. She could not remember if she gave them to Altman directly
or if they were delivered to his office. Hanson stated that she did
point out to Altman that the last talking point said that he had decided
to recuse himself from the decision-making process as interim CEO of
the RTC because of his relationship with the President and Mrs.
Clinton. Hanson said that she asked Altman if he were inclined to
move away from that position that she would either delete or change
that talking point and that Altman indicated that they were fine.
(Hanson (1), pg. 155)
According to Dennis Foreman, Deputy General Counsel and Ethics
Officer, Treasury, prior to Hanson and Altman leaving Treasury to go
to the White House, Hanson requested Foreman to review the onepage paper entitled wTalking Points. W Based upon a 2-minute review
of the wTalking Points W
, Foreman offered the opinion that no nonpublic information was included in the "Talking Points." According to
Foreman, all of this information was in the media, being discussed in
15
Congress, and the rest was procedures that ATC would follow in
running up against a statute of limitations. All of the information
appeared to be "standard operating stuff" that was publicly known.
The "Talking Points" included the paragraph about Altman's recusal.
(Foreman, pgs. 14-24) (Exhibit 12)
Altman stated that on his way to the meeting, Hanson handed him a
version of talking points for the meeting which included a reference to
recusal. According to Altman, Hanson added this to the talking points
because she thought he should recuse himself. This was not put in
there at his request. Altman stated that at that point he had not yet
decided to recuse himself and he had not intended to discuss his
recusal at the meeting. During the meeting, however, he "blurted"
out that he was considering recusal, that Secretary Bentsen had
recommended recusal and that he was going to take that advice, but
did not say when. (Altman (1), pg. 39) He stated, "No one asked me
not to recuse myself." (Altman (1), pg.29)
Altman stated that he attended the meeting with Hanson, Nussbaum,
Eggleston, Williams and Ickes to brief them on procedures which RTC
would follow relative to the statute of limitations. Altman stated that
his reason in providing the briefing to the White House was because
the same information had been provided to the Congress and because
whatever decisions the RTC made could have an important impact on
the White House. (Altman (1 L pgs. 30, 40, and 42)
Nussbaum stated that he attended the meeting after receiving a call
from McLarty's office. Present at the meeting were Altman, Hanson,
Ickes, Williams and Eggleston. Nussbaum stated that Altman
discussed the statute of limitations issue regarding the Madison
Guaranty civil matter and the possible use of tolling agreements.
Nussbaum stated that Altman also discussed recusing himself from
the decision process. Because of events surrounding the confirmation
hearing held the day before for Rikki Tigert, the nominee for the FDIC
chairmanship, Nussbaum was concerned about the prospect of
Administration nominees automatically recusing themselves from
Madison or Whitewater maners just because they were nominated by
the President. During her confirmation hearings, Tigert took the
position that she would recuse herself if ethically or legally required to
do so. The White House was supporting that position. Based on
these concerns, Nussbaum told Altman that if Altman was not
required to recuse himself, he should continue to act and, that his
review of staff recommendations could affect the discipline, fairness
and professionalism of the process. Nussbaum also said the White
l'
House would not give him any instructions regarding recusal.
(Nussbaum, pgs. 28-38)
According to Hanson, at the 2/2/94 meeting, Altman went through
the "Talking Points" and stated that he had decided he would recuse
himself. Nussbaum asked whether Ellen Kulka or Jack Ryan, who
were supervising the work, would decide the issues. Nussbaum
stated that Kulka was tough, or something similar. Nussbaum said if
Altman were to stay in the process and not recuse himself there
would be discipline imposed on the process to produce a thorough
and fair result. Hanson also recalled that Williams asked if the
investigation couldn't be completed by the end of February would it
mean that there would have to be tolling agreements. Williams also
asked if counsel to the parties could be contacted. Altman said he
thought so, but didn't know when. (Hanson (1) pgs. 173-174)
Steiner said he believed Altman advised him of what happened at the
meeting either on 2/2/94 or 2/3/94. Steiner said Altman told him that
during the meeting Nussbaum voiced displeasure over the idea of
Altman's recusing himself. Steiner said he was under the impression
that Altman had gone to the meeting with the intention of recusing
himself, but deferred to Nussbaum's ·political judgement" on the
issue. Steiner's diary reflects that Altman had gone to brief the White
House on the impending statute of limitations deadline and also to tell
them of his recusal decision. Steiner wrote in his diary, -They reacted
very negatively to the recusal and RA backed down the next day and
agreed to a de facto recusal where the RTC would handle this case
like any other and RA would have no involvement.· Steiner's diary
also indicated that Altman originally decided to recuse himself but
under "intense pressure" from the White House he said he would
make the final determination on the tolling agreement based on a
recommendation from Kulka. (Exhibit 13)
In describing his diary, Steiner explained that several weeks often
passed before he wrote in his diary, and it was not intended to be a
verbatim account of what took place. He said his reference to
"intense pressure," was "obviously a feeling' may have had. It was
words that I chose Quickly to describe a complicated meeting." The
words in his diary were not the words used by Altman to describe the
meeting, according to Steiner. (Steiner, pgs. 45-47).
Altman stated that he did not know where Steiner "gets that· in
regard to Steiner's diary references on the recusal issue. He denied
11
that anyone at the 2/2/94 meeting asked him not to recuse himself.
(Altman (2)' pgs. 29, 42-43)
Nussbaum stated that Williams questioned Altman as to whether
private counsel to the President and Mrs. Clinton could be briefed by
the RTC on the civil case. (Nussbaum, pg. 39)
Williams stated that she did not remember bringing up the issue of
briefing private counsel. (Williams, pg. 10)
Altman stated that he did not know why Williams was at this
meeting. (Altman (2), pg. 26)
Williams stated that she did not know why she was invited to this
meeting. She stated that it was on her calendar so she attended.
She stated that the meeting was to discuss the statute of limitations
issue and Altman's recusa/. (Williams, pgs. 5-8)
Altman stated that he was asked whether the information from the
2/2/94 meeting would be provided to the private attorneys for the
parties at interest. According to Altman, Hanson subsequently
checked with Kulka, who indicated she was not going to be
contacting private attorneys at that time. Kulka stated that she was
contacted on this issue by Hanson and told Hanson that she did not
think that it was a good idea to contact the private attorneys at that
time. (Altman (1), pgs. 36-37, 45-46; Altman (2), pgs. 24-25; Kulka,
pgs. 19-21)
Ickes, though not recalling the time or place, stated he probably
reported "about the meeting to the President and First Lady." (Ickes,
pg. 19)
Hanson stated that Altman called her on 2/3/94 and advised that the
previous evening, 2/2/94, he had spoken to McLarty, who wanted to
be filled in on the meeting that had taken place that day. Altman told
Hanson that he advised McLarty he had decided not to recuse himself
for the time being. He also indicated to Hanson that he had a couple
ot other phone calls. Altman advised Hanson that "he did not believe
that it made any difference to the decision in the investigation, but
that it had made them happy." (Hanson (1) pg. 185)
Altman said he called McLarty, but believed he made the call a day or
two after the 2/2/94 meeting. He said he called Mclarty because
McLarty was the person who had set up the meeting. He said he
18
spoke to Mclarty only for about a minute. He told him that he had
decided he was not going to recuse himself for the time being, but
that it was irrelevant because Kulka was going to be making this
decision. (Altman (1), pg. 49).
McLarty remembered returning a telephone call from Altman sometime
following the 212/94 meeting. He believed the purpose of Altman's
call was to acknowledge that the meeting had taken place. During
the call, McLarty said that Altman "conveyed that it was a dilemma
whether he should recuse or not given that he had responsibility for
the RTe in his Treasury position." McLarty said he told Altman he
understood the dilemma he was facing. Mclarty told Altman that
although he hoped he would not have to recuse, Altman would have
to make the decision he felt was right. (McLarty pgs 12-13)
2/3/94
Nussbaum stated that he received a fax from Hanson, which
transmitted a letter of the same date from Congressman James Leach
to Altman. Nussbaum stated that Hanson later called him regarding:
(1) Altman's recusal and that Treasury could consult with the White
House ethics person; (2) the concern for independent investigation
and Nussbaum advised her that she should look at the charter of the
Special Counsel. (Nussbaum, pgs. 45-48) (Exhibit 14)
Although the cover sheet depicts Hanson's name, she does not recall
faxing the lener from Mr. Leach. Hanson stated that she received a
telephone call from Nussbaum pointing out that the Independent
Counsel's charter had been published and asking if she had seen it.
Nussbaum suggested- that Altman might want to consider the charter
in any decision-making that he was going to do on the Madison
matter. She believed that this conversation occurred on 2/4/94.
(Hanson (2)' pgs. 9-13)
According to Altman, he called Ickes to arrange to meet him briefly
before another meeting he was scheduled to attend at the White
House. He then met briefly with Ickes and advised him that he was
not going to recuse himself for the time being. According to Altman,
Ickes had no particular reaction other than thanking Altman for telling
him. (Altman (1), pgs. 48-49)
Eggleston stated that he was in Williams' office with Ickes, but that
Williams was not there, and Altman stuck his head in and said that he
had decided not to recuse himself for now. (Eggleston, pg. 37)
19
Ickes stated that he recalled that several days after the 2/2/94
meeting, Altman came by the White House and told him he had
decided that he was not going to recuse himself. Ickes stated that
Williams may have been present; he did not recall Eggleston being
present. (Ickes, pgs. 17-18)
Hanson stated that she went to the White House to meet with Altman
but missed the appointment. Hanson stated that she met with Ickes,
Eggleston, and Williams. According to Hanson, Ickes asked her,
"Who knew that I (Hanson) recommended that Altman recuse
himself." Hanson stated that she had told three people, and was told
that was good because if that got out it would look terrible. (Hanson
(1), pg. 188)
Ickes stated that he recalled a very brief "hello/goodbye- meeting with
Hanson, but did not recall asking her who knew she'd recommended
Altman's recusal. (Ickes, pg. 21)
Eggleston stated that he remembered Ickes asking Hanson how many
people knew that she had recommended that Altman recuse himself.
(Eggleston, pgs. 39-40)
According to Nussbaum, Altman ran into him at the White House and
Altman advised that: "He was probably not going to recuse himself".
(Nussbaum, pg. 45) Altman said he recalled running into Nussbaum at
a later date, around February 23, at which time Nussbaum told him
that the White House had a nominee for the RTC chairmanship.
Altman did not indicate that any discussion regarding recusal took
place during this encounter. (Altman (1) pg. 49)
Hanson stated she had a follow-up meeting with Altman and
Secretary Bentsen. Altman recounted the discussion at the White
House. Hanson stated the Secretary commented to Altman that he
(Altman) would take some political heat for having made that
decision, but that it was his (Altman's) decision to make. (Hanson (2)
pg.7)
Secretary Bentsen does not recall a meeting with Altman and Hanson
on 2/3/94. However, his daily schedule reflects a meeting with
Altman and Hanson at 11 :53 a.m. on 2/3/94. (Exhibit 15)
20
Altman stated, sometime after the 2/2/94 White House meeting, he
may have had a discussion with Secretary Bentsen about his recusal,
but he doesn't know when. (Altman (2), pgs. 27-28)
2/4/94
Foreman stated that he spoke to Beth Nolan, Associate Counsel to the
President and Alternate Designate Agency Ethics Official, White
House, at the direction of Hanson, about ethics and recusal issues.
(Foreman, pgs. 26-27; Nolan, pgs. 7-14)
According to Nolan, she and Foreman had another telephone
conversation regarding recusal. (Nolan, pgs. 14-17)
2/8/94
Hanson stated that during a telephone conversation with Nussbaum
on an unrelated subject, Hanson thanked Nussbaum for bringing the
Independent Counsel's charter to her attention. (Hanson (2), pg 14)
2/9/94
According to Nolan, Foreman called because Tigert had announced
that she, in her confirmation hearing, would recuse herself from
Madison matters at the FDIC. Foreman wanted to know if Tigert's
recusal decision should affect Altman's deCision. (Nolan, pgs. 18-25)
Foreman stated that he met with Gary Davis, OGE, to discuss
Altman's recusal. No determination was made and it was agreed that
Foreman would get back with a written analysis. (Foreman,
pgs. 45-48; Davis, pgs. 4-7)
2/16/94 or
According to Steiner, he stopped by to see George Stephanopoulos,
2/17/94
Senior Policy Advisor to the PreSident, and discussed Altman's
recusal. Steiner stated the meeting was self-generated, not at
anyone's request. (Steiner, pgs. 55-57)
Stephanopoulos does not recall any specific contact with Steiner, but
stated it was conceivable that they ran into each other at that time.
He might have asked my opinion about Altman's recusal, and "I know
that my general opinion at that time was whatever you want to do,
do." (Stephanopoulos, pg. 11)
·Week of:
2/14-2/18
According to Steiner, John Podesta, Staff Secretary, White House, or
Todd Stearn. Associate Counsel to the President, called him and
asked how RTC came to hire Jay Stephens, former U.S. Attorney for
the District of Columbia, to handle the Madison case. Steiner stated
that he checked with Hanson or Hanson's Special Assistant on the
21
matter, who in turn contacted ATC to determine how Stephens had
been hired. (Steiner, pg. 57)
2/18/94
Arthur Kusinski, ATC Ethics Officer, issued an opinion concerning
Altman's possible recusa!. (Exhibit 16)
*2/94
According to Steiner, he called Podesta or Stearn back and advised of
ATC's process in selecting Stephens. (Steiner, pg. 57)
2123/94
Eggleston said that at some point in preparation for the 2/24/94
hearing, he called Hanson to make sure Treasury was prepared in case
Altman got a Question about the 2/2194 meeting at the White House.
(Eggleston pgs. 47-48)
According to Steiner, he telephonically advised Pat Griffin, Staff
Secretary at the White House, that Altman might be announcing
during the hearing that he was stepping down as Interim CEO.
(Steiner, pg. 90)
Altman stated that he telephoned Ickes to tell him that he would be
announcing during his testimony the following day that he would be
stepping down as RTC chairman on 3/30/94. Altman did not indicate
that the recusal issue was addressed. (Altman (1), pg. 50)
According to Ickes, Altman called him to advise that he was gOing to
be testifying before the Senate Banking Committee and that he was
considering recusal. Altman stated that he was leaving for a meeting,
but asked Ickes to call him back with any thoughts on the subject.
(Ickes, pgs. 21-23)
Ickes stated that he subsequently called Steiner and asked Steiner to
tell Altman that the recusal decision was entirely up to Altman. Ickes
stated that he did not recall discussing with Steiner whether or not
Altman would announce his decision to step down as interim CEO
during the hearing. (Ickes, pgs. 21-23)
According to Steiner, Ickes called to speak with Altman, but he
received the call in Altman's absence. Steiner stated that Ickes told
him that Altman should not be definitive during the hearing about his
intentions to step down as Interim CEO. Steiner also stated that Ickes
said if Altman felt he should recuse himself either before the hearing
or at the hearing, he should go ahead and do that. (Steiner, pgs. 6769).
22
At Altman's request, Hanson said she called Nussbaum to tell him
that Altman's testimony at the hearing the next day would state that
Altman's Vacancy Act appointment was going to lapse on March 31,
1994, that Altman intended to allow the appointment to lapse, and
that he would not be involved in making a decision on the civil
investigation involving Madison. According to Hanson, Nussbaum
replied that "he's going to leave us with Ellen Kulka." Hanson also
recalled that she and Nussbaum discussed some of the mechanics of
the Vacancy Act. (Hanson (2), pg. 17).
2124/94
Altman testified at the Congressional hearing.
2125/94
Steiner stated that during a morning telephone conversation with
Podesta, they discussed that Altman was conSidering recusing
himself. Steiner stated that he did not recall who initiated the call.
(Steiner, pg. 69)
Steiner stated that Altman recused himself in the afternoon.
Steiner stated that he called Podesta to inform him of Altman's
recusal. (Steiner, pg. 72)
Eggleston stated he called Hanson concerning Jay Stephen's law firm
handling the Madison civil matter for the RTC. (Eggleston, pgs. 51-
52)
Hanson stated she received a call from Eggleston asking if Stephens
was the outside counsel representing the ATC in the Madison civil
matter. (Hanson (2), pg. 19)
Steiner stated that he had a telephone conversation with
Stephanopoulos. Steiner stated that he could not recall who initiated
the call, but that Altman was present in Steiner's office during the
call. According to Steiner, Stephanopoulos raised concern regarding
the manner in which Altman recused himself and Stephens' role on
the Madison case. According to Steiner, Stepha no poulos thought it
was a conflict of interest for Stephens to be involved in this case
since he had been dismissed by this Administration and had been a
vocal critic of the Administration. Steiner said Stephanopoulos
suggested that the conflict of interest should prevent him from being
involved in the case. In his diary, Steiner wrote that Stephanopoulos
had suggested "we" need to "find a way to get rid of him"
(Stephens). (Steiner, pgs. 59-62)
23
Stephanopoulos stated that he recalled the above conversation with
Steiner. He categorized his remarks regarding Stephens as "blowing
off steam." (Stephanopoulos, pgs. 6-10)
Altman stated that he was telephonically contacted by
Stephanopoulos and Ickes, who expressed concern over the way
Altman recused himself. Altman said he was also Questioned about
the Stephens matter. Altman stated that Stephanopoulos told him to
write a letter to the President regarding the recusa!. (Altman (1), pg.
51) (Exhibit 17)
Stephanopoulos stated that he did not recall addressing the Stephens'
issue again. However, he did recall suggesting that Altman write a
letter to the President regarding his recusa\. (Stephanopoulos, pgs. 610)
Nolan stated that she called Foreman concerning Altman's memo
regarding CEO expiration on 3/30/94 and recusal. (Nolan, pgs 27-30)
Lindsey stated he called Altman to inquire about a press inquiry about
whether Altman had received any instructions from anybody at the
White House to do anything with various lawyers concerning the
statute of limitations and recusal. (Lindsey, pgs. 21 -23)
3/1/94
Altman stated that he received a call from Podesta and was advised
that there were two other White House meetings besides the 2/2/94
that he testified to. (Altman (1)' pgs. 56-58).
3/2/94
Altman submitted a follow-up letter to Senator Riegle clarifying his
testimony on 2/24/94. (Exhibit 18)
3/3/94
Altman submitted a follow-up letter to Senator Riegle clarifying his
testimony on 2/24/94. (Exhibit 19)
3/11/94
Ludwig prepared a memorandum detailing his contacts with the White
House on the Madison matter. (Exhibit 20)
3/21/94
Altman submitted a follow-up letter to Senator Riegle clarifying his
testimony on 2124/94. (Exhibit 21)
24
EXHIBITS
1.
Summary of White House Contacts.
2.
Name List.
3.
RTC Memorandum dated June 17, 1993, regarding guidance on the subject of
criminal referrals.
4.
Memorandum dated September 30, 1993, to Roger C. Altman, Deputy Secretary,
from Jean E. Hanson regarding The Rose Law Firm.
5.
Lloyd M. Bentsen, Secretary, Department of Treasury, Memorandum of
Interview dated July 20, 1994.
6.
Clifford Sloan's notes dated September 3D, 1993 and October 7, 1993.
7.
Memorandum to File dated July 27, 1994, from loan M. Dwyer, Special Agent
regarding Addendum to William Roelle's Testimony.
8.
Mark Gearan's notes reflecting the discussion of the October 14, 1993 meeting.
9.
Memorandum to File dated October 20, 1993, from Bruce R. Lindsey regarding
Whitewater Development Corporation.
10.
NexislLexis report dated October 31, 1993.
NexislLexis report dated November 2, 1993.
11.
Roger Altman's redacted diary.
12.
Talldng Points for Roger Altman: information meeting with Mack Mclarty
February 2, 1994.
13.
Diary of Joshua 1. Steiner covering the period December 12, 1993 through
February 27, 1994.
14.
Fax dated February 3, 1994, to Mr. Bernie Nussbaum from Jean Hanson
transmitting letter Roger Altman from James Leach.
15.
Memorandum dated July 22 1994, to Francine Kerner from Stephen McHale with
documents pertaining to the Secretary's schedule.
16.
Memorandum dated February 23, 1994, to Roger Altman from Dennis I.
Foreman regarding recusal on RTC matters relating to Madison Guaranty S & 1.
Attached to Foreman's memorandum is a memorandum dated February 18, 1994,
to Roger Altman from Arthur Kusinski relating to RIC Madison Guaranty
matters.
17.
Letter to Bill Clinton from Roger Altman.
18.
Letter dated March 2, 1994, to Riegle from Altman.
19.
Letter dated March 3, 1994, to Riegle from Altman.
20.
Memorandum dated March 11, 1994, to Edward Knight from Eugene Ludwig.
21.
Letter dated March 21, 1994, to Riegle from Altman.
22.
July 22, 1994, Treasury Memorandum on Legal Questions relating to the DIG
mqUlry.
23.
July 22, 1994, RTC Memorandum on Legal questions relating to the DIG
mqulry.
Transcripts:
24.
Aboussie, Richard
25.
Altman, Roger (1)
26.
Altman, Roger (2)
27.
Bowman, John
28.
Curtis, Glion
29.
Davis, Gary
30.
DeVore, Jack
31.
Dudine, James
32.
Eggleston, Neil
33.
Foreman, Dennis
34.
Gearan, Mark
35.
Hanson, Jean (1)
36.
Hanson, Jean (2)
37.
Ickes, Harold
38.
Katsanos, Steve (1)
39.
Katsanos, Steve (2)
40.
Kulka, Ellen
41.
Lindsey, Bruce
42.
Ludwig, Eugene
43.
McLany, Thomas
44.
Nolan, Beth
45.
Nussbaum, Bernard
46.
Nye, Ben
47.
Roelle, Bill
48.
Sloan, Cliff
49.
Steiner, Joshua
50.
Stephanopoulos, George
51.
William, Maggie
52.
List of selected newspaper articles relating to Madison Guaranty S & L.
Exhibit I
Summary of White House Contacts
CONTACTS
DATE
PARTCIPANTS
TYPE
1.
9/29/93
HansonINussbaumlSloan
Meeting WhiteHouse
2.
9/30/93
Hanson/Sloan
Telephone Call
3.
9/30/93
Hanson/Sloan
·(Sloan denies receipt of faxes)
Fax
4.
10/7/93
Hanson/Sloan
Telephone Call
5.
10113/93
DeVore/Gearon
Telephone Call
6.
10/14/93
NussbaumfSloanIGearon
SteincrlEgglestonlLindsey
DevorelHanson
Meeting WhiteHouse
7.
12/29/93
ClintonlLudwig
Meeting Renaissance Weekend
8.
12/29/93
Ludwig/Sloan
Telephone Call
9.
12/29/93
LudwiglKennedy
Telephone Call
10.
12/29/93
Ludwig!Klein
Telephone Call
11.
12/30/93
Ludwig!KleinlClinton
Meeting Renaissance
12.
1194
LudwigIWilliams
Telephone Call
13.
2/1/94
AltmanlMcLarty or Ickes
Telephone Call
14.
2/2/94
NussbaumlHansonlAltman
IckeslWilliamslEggleston
Meeting WhiteHouse
15.
2/2/94 or
2/3/94
AltmanlMcLarty
Telephone Call
2/3/94
Altman/Nussbaum
West Wing WhiteHouse
16.
17.
2/3/94
Hanson/Nussbaum
·Hanson denies
Fax (14 pages)
18.
2/3/94
Hanson/Nussbaum
Telephone Call
19.
2/3/94
Altman/Ickes/Eggleston
Meeting WhiteHouse
20.
2/3/94
Hanson!Ickes!Eggleston
Williams
Meeting WhiteHouse
21.
2/4/94
Foreman/Nolan
Telephone Call
22.
2/4/94
Foreman/Nolan
Telephone Call
23.
2/8/94
Hanson/Nussbaum
Telephone Call
24.
2/9/94
Foreman/Nolan
Telephone Call
25.
Wk of 2/14/94
Podesta or Stem/Steiner
Telephone Call
26.
Wk of 2/14/94
SteinerfPodesta or Stern
Telephone Call
27.
2116/94 or
2/17194
SteinerlStephanopoulos
Meeting WhiteHouse
28.
2/23194
EgglestonIHanson
Telephone Call
29.
2/23/94
Steiner/Pat Griffin
Telephone Call
30.
2/23/94
AltrnanlIckes
Telephone Call
31.
2/23/94
Ickes/Steiner
Telephone Call
32.
2/23/94
Hanson/Nussbaum
Telephone Call
33.
2/25/94
PodestalSteiner
Telephone Call
34.
2/25/94
Podesta/Steiner
Telephone Call
35.
2/25/94
StephanopouloslSteiner
Telephone Call
36.
2/25194
IckeslStephanopoulos!
Altman
Telephone Call
37.
2/25194
EgglestonlHanson
Telephone Call
38.
2/25/94
Lindsey! Altman
Telephone Call
39.
2/25194
Foreman/Nolan
Telephone Call
40.
3/1/94
PodestaJAltman
Telephone Call
Exhibit 2
Name List
NAME LIST
lloyd M. Bentsen, Secretary of the Treasury
Joshua Steiner, Chief of Staff to Secretary Bentsen
William Roelle, then Senior Vice President of RTC
Cliff Sloan, White House Associate Counsel
John Bowman, Assistant General Counsel for Banking and Finance, Treasury
Jean Hanson, General Counsel, Treasury
Bernard Nussbaum, then White House Counsel
Benjamin Nye, Special Assistant to the Deputy Secretary, Treasury
Richard Aboussie, then Acting General Counsel of RTC
Ellen Kulka, General Counsel 01 RTC
Dennis Foreman, Deputy General Counsel and Ethics Officer, Treasury
James Dudine, Director, Office of Investigations, RTC
Mark Gearan, White House Director of Communication
E. Glion Curtis, then Acting General Counsel of RTC
Bruce Lindsey, Senior Advisor to the President
Michael levy, Assistant Secretary, Legislative Affairs
Frank Newman, Under Secretary of Treasury
Thomas McLarty, White House Chief of Staff
Maggie Williams, Chief of Staff to the First Lady
Dennis Cavinaw, Vice President, Kansas City Regional Office
Roger Altman, Deputy Secretary of Treasury and then Acting CEO of RTC
Neil Eggleston, Associate Counsel to the President
Jack Devore, formerly Assistant Secretary of Public Affairs and
Public Liaison, Treasury
Steve Katsanos, Director, Office of Corporate Communications
Harold Ickes, Deputy Chief of Staff, White House
Congressman James Leach, Banking Minority Member, Committee on
Banking, Finance, and Urban Affairs
Ken Shmalzbach, Assistant General Counsel for Administration
Beth Nolan, Associate Counsel to the President and Alternate
Designate Agency Ethics Official, White House
Rikki Tigert, designate for FDIC CEO
Todd Stearn, Associate Counsel to the President
George Stephanopoulos, Senior Policy Advisor to the President
John Podesta, Staff Secretary, White House
Eugene Ludwig, Comptroller of the Currency, Treasury
Pat Griffin, Staff Secretary, White House
William Kennedy, White House Staff Attorney
Exhibit 3
RTC Memorandum dated June 17, 1993,
regarding guidance on
the subject of criminal referrals
aTe %nv••t1,ltlon, Department HI,d,
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All Liti'ltlonL Prot••• lonal Llabl11t,.
lft4 Co.pl~x L tlq&tloft Slation Chi.f.
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All Llt19It'~~t Prof••• lonal Llabl11ty,
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.~i.iftal rtferrall to the u. I. Dapartllnt or 1U.tict ln4 otber
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.Jultlaa (lftalU4ln1 the 0... Attorner" ott 10. .1\4 tbl FlI).
In
'\loll a•••• , t&cJ2l reelnal .boule lie .ooollPanle4 b)' a aovN' letter
.ipad by • wpuY1,orr o!f1oia1, ttll. aay ):)e • seatioft Chler,
D~tn' Rea., o~, J.ft appropriate a•••• , tbe crt.lnal ooor41na-
'or.
Ifhlft thl (11111111\11 r.tertal 1I101u4,. rlooN' or lntoraatlon
d •• lve4 fnll the ~.OON. 01 • OV'...01I." wbt 1. en LncU.vld\&a' or •
partner.hip conti.tint of five ~ fl"" in41v14'.1all, ttl. 1191'1",
oC'LGi.~ ~.t aak. the fol1owlnt o.rtlf1oation in the ;over
FRG~
RESOCUTfoH TRUST COR'. JHSPECTOR 6ENERAl
87.8S.199.
1.1~4
P• •
· ,.
lttt.r, .1 fequirtd br tb- al,ht to "nancial privaoy lOt,
11 V.I.C •• 1413(1).
Thl lntoraatlon
pt~lnl",
to tbl. IIttlr I&y have blln
dirty., Crot the ftnanolll raaofdl of ~.tOl.r. 0;
t.derallr in.ur.« flftlnolal lnltltuticftl. t hlr.br
oartit, that (A) th.rt S. r"lOft to belleve that the••
rloord. IIY be r.llvant to • vlolatlon ot a fedatal
oriaiftal law, .n4 (I) tb. ~eoor4. vera obt6~.d 1n tbt
IXlrol•• of aTC'1 lupervl.ory or r~l'tor¥ funQtion ••
.. terrall for .onlY laundlrlnq and
oth~
ftnlftoi.1 orlDaI aav
1110 be aade 1ft th1, mann.r to OOapofttntl of the
"ftt
'I.,.
the Secret
'.rvioe)~
In oa •• ,
fr.'lury Dlpart-
0' ~.t.~r.l. to qth.~
ftd.rll 1,lnat.l, the LIlli Dlvl.10ft crlltnll COordinator .hould
be oonlultt4 to .n.~. oo&pl1&ft01 with the other r~ire&eftt. ot
the Rl9bt to finanoial JriVlaJ lot.
Cop1•• of li;nltlclnt ort-lnal rlt.trlll Ihou14 &110 be ••nt to
tkl Oftl0' 0' Xft".ti,ationl, .alblntton, D.C. 11,nitioant
r.r.rral1 are tho•• ¥bleh quillfr to blcoal ".a~or· c•••• uft4.~
~
vul«elift111
'100,000
or
(1) Loll 4ut to apparent crt.ln,l conduct 1.
apparent ar1alnal oo~uot involv•• &
dL~.ctor, atlLo.r, profl •• tonal (1.'1, attorney or aooountant),
or ,bartbo14tr of the In.tltutlonl or ") othlr cOIP~111ni ria-
IOn.
ao~., ~a,
!b8
CI.'.,
praa~10.
the aJpar.nt .il;on4~ 1, part 01 a pattern or
involving other tinanalal ift.tltutloh. O~ th••oh...
O~
"0" RESOCUTIOH TRUST CORP.-INSPECTOR GENERAL
Ir.es.19'4
P. 5
14135
• 4•
IUlpeoti poel a thr.at to operatln., CinaMlal 1nltltutiona).
AI
vlth all othar orl.inal referral., offioial til. oopl•• aUlt bt
..tab.. 1ft th. field offia••
••
QQAr4lMtiQD witb Othl" 'g.nal •• , %n &ooo1'4lnOl w1~ I
"Gent .ff....nt, J'l'C--qlntra.tld a:1alnal 1'lft.rrall w111 be rOt-
vard-S to the Depattunt or the 'rz'••IUWY" ,ll\eJ:If oreioe, to bl
tnolU4ed in • national datab.l. or r.terrall IUbaltted fro.
"ninol,l lnltitution r1ru1ato•• , ~nk'l ort4lt union. and ••vth,. • ••ocl,'ion.. Rlfer to th' filing inltruotioftl oont.ln.~ Oft
,.;. a of t.l\. %n_er:1i,nOr Crl.1Ml Rlferral rom.
I.
QogUao t yith I.Di0t: .%.nttX'lllDQ¥ draup PAllOr.,
sttt.met
'rOO-Oyr_.
BI;»l.tory
,"gOing H1t.lQnllRQ11ay 0'1 ~pll.=ltm 'nd JtlAnting
&Pr ...,lt~t'OQL,ay.kl' to
'l~'n;t.l
MIAA1 •• (·,IQ !allay IC A1;U1 nt;",.
In'tltvt1gn
lfC crlliUlll CoorcUnatot'1
1A&11 be r"poftllble for oontaot vltb other "enol•• to in.ur.
onpl1ano. with the IXCI pol1ay atat..tnt adopted -nm. 'I,
,g,a.
zt 1....entlal tbat
l~v•• tl,.tlYl .,.noy
~ll\l'" 1ft
ooeaunlcatioft with thl appropriate
&ft4/o~ the VIAD 0: 00: trial attorn,y bt
111
aelY'no. b.tw••n the "'fal anet Inv•• t19atlon.
~l.LnaJ.
Ooor4In.tor.. thl 11M of oODW\l"'lon .hou14 YUI1ft
open fra tbe tia. the r.eernl 1. Q«. tnro"", tLnal cSlapoll"
tlon, 1nolu41l\f ocl1,otion of
r ••tlt~tjon ordlf.
anr auW\te 4\1. \U\d.E'
• ol'i.inal
.-
..
••
ItM"
Hftt"t'll.
hUinlL %t l. Vlry laportant tbai all orl.1"~1
and thl lubaequent 06•• and ••"tenolnv .tttu. be en-
tered iftto the thrlf' Inv•• t1vatlonl Henl9,.,nt 'Ylt.. (TIKI).
iaterrll1 ""lab "ert fl1t4 ~ an
01' by • l'.,ulaHrr
m
I"'tltutslon b.ro.., " f.l1.
19enoy (OT' or 'DIe) VhlGh haM Iplolfies
lndiv14\1&l (.), and for vhlob the Itatuu of lLaltat!.ora. M. not
axplrld or fo~ Whlab I orLl1nal 0••• hat ble, lnitiatl4 (v1,
indict.tnt O~ lftforaation fll1n,) .~.t bl tlt.re4 into tIKI ••
wetl. Do not tht.r inherit" r,r'Z'l'll. wich 40 OAt nua tbt
,~,p,o' (,.,. n•• lnt ·unknown,- O~ ·Uft14an~lfl~ &Dploy••• ~).
aut'
A rl1,
~ .,lntalftt« In the tl.14 orCla. ~ the 4•• 1tnlted
Invel'lfatloftl Crt.lnal Coordinator for e,Ob referral vith .upI
patt11l9 cloowa.ntatlan and lub.equlnt oorrt.poft4tnot. !b•••
r.oor~.
art
biGhl,
oonti4.~tlal
an4 Ihou14 bt ~r•• te4 lGoor41nqlv
(e.,., kept 1ft l.ourtd/lookt4 oablnlt).
fha
o~aplttAd
r.fU'rll tora aM .0•• r.lltacl rloor41 lre lubjeot
to th. appllGablt provl.lon. at the PrlvaCy lot of 1'74, I V.I.C.
• 152., and
r~ •• t
at)'
no' M «1.0101'" t.o the pw.l1o 1n r ••poftal to •
wr.4u tilt PreMn of tnforaatloft Aot, •
U ••• c.
•
112, 01'
•• part of • l1tl,ltlon dl100very proc.... Any r~..t. for
r.ttrral l~fora4~'.n fro. non-rerulate~. O~ non-ato lnv••tlgativi
or leoal .tatt Ihoulc1 be pZ'01lptl~ r.r.rrl4 or tonr.~e4 to ttl,
tield 0lf101 Lltll O!vll1on erlalna' Ooor4lnatol' anel the attorneye,) vltb llt1tatlnt r ..poftllbl11tr (Litl,atloft, PLI, lnG/or
oa-pl.x Lltl,atlon) for the lft.~ltutloft. ~\.14. oouna.l an4
•
•
••
inve.ti,ltlve oontrlator. '" blv. 10oe.. to th... reoof41 u~••r
the olo~. IUpervil10n Of th. attorney with l1tl,at1n9 r ••pona1bl11ty £or th•••tter O~ lnv•• tl,ltlone, II .pproprl.~.. OUt.ld. aontraotor. Ihaul. be a4vl•• 4 or the ••nlltlvitv of 0 ••,
..teriall an4 that dllolo.url. are prohibited.
7.
"tagbc,nt•• nO Blt1r,nqlIL
ot~.
rbi, directlve rlpllo •• all
prlvloully l.,ue' en thl. lubS,ot. 1 .'.pl, tntar'9tnov
crlalnal lI£arrll lora an« 8tO ,ollor state.tnt art attaoh.4,
'1•••• review thI Inv•• t1q,tlonl •• ctloft of thl Con•• rvltor.'
Ope~.tln,
br ota. MOlt of the
.ia,~t•• ar. Gontaln.' 1ft Tltl. l',
Ka"ual an4 Directive
r.lev,nt Ct4erll
U. I, Co4i.
~~ f~.u4
'1~O'7
'l.ul4
Exhibit 4
Memorandum dated September 30, 1993, to
Roger C. Altman, Deputy Secretary,
from Jean E. Hanson regarding
The Rose Law Firm.
DEPARTMENT OF THE TREASURY
WAIMINGTON
O."EItA~ COUN8CL
S.pt··bar 30, 1913
MEKOJWmOK POR I.OCiD C. lLT!WI
DIPU'fl IICRr:rARY.
FROII:
St7BJEC1':
Th. Ro•• Law
Stev. Kat.ano. ha. talked with Sue schmidt (S •• attach.d RTC
Ear1y Birel).
I have lpaten with the S.cr.tary and al.o with Barni.
Nu•• baua and cliff Sloan.
I bave aHeel Bill Roelle to keep •• infon.d.
anythin9 al.e you think w. ahould be doing?
I. there
Attachment
149
.tor1..
rollorJ.a, are ••UVu. n""
~. Orr1ee ot
Corpar.e. eo.BUnj~.tjo~ ant1clpat•• will be publi.h.d 18 the d.y.
ael ... au
'l'11J... nport u tor .Latunu u.. only. StaL~
.boald AOe tDto~ zeportezw o~ .torl.. 1e1.Atj~j.d b.~ ebat are
NUl prepared "y eo.,..t.tton.
nae
all..,.
The oppo.itloft of J •••• 3actaoft' . . .lnboV Coalition to
.taftl.r Tat.'. ftoainatioft vill be reponed 1D towaonov'. " ••h.tngtOlJl
.....
~
Senator .ie91e'. d..aNI tha~ .tanl.y -rata .ee~ vi th each
ot the ~1.tl.~10v.r8· 1ft l ••t veak'. hearlft9 .bould get
.lqft1ficant epeculative coverav. concernin; wheth.r .1eq1.'. move
vill fruatrat. the no.ln •• and provoke hi. vithdraval.
!ft\. ao •• Law rira'. all.;M u.ftdiaclo ••d co~llct. ot
inter •• t, and d"t1tn.l He ,oure,,' .yqq.,1ilofta that a"lt1ple
ratural. to
• J".tlce DepartMnt llftIC the t1~'. .·.h.r••
triMcI., a1\4 loan. to in.oly.ft~ "Le, are beift, purw.d by the
" ••11J.nvtOll I'o.t and the A6.oc1.teel ~•••
-- St.ve
Xa~.&no
•
••vual new orvanizatioM vill 11k.1)' r.port that
today'. d.a41in. for aTe r •• olut1on authority vill b. aft uneventful
p•••• ,. due to the ta~ that th. Senate ha. nam.d cont.r... an4
f~n41n, la;i.latlon .hauld be approved 'OOft.
-
Offlc. of corporat.
eo_W\ica~lona
'&I\U. "o~l •• '
pro.otlon to Actin, Director of
SeC\U' 1 t1 ••tlon .bo~ld be the tocu. ot an upc:oainc; Nae1ol1aJ Hortgar;.
H.~• • tory on the .re' ••• curlt1aat1on proqr...
The JTe'. u •• of the lav flra Holland and Har~ 1n • • u1t
a,alnat Oelo1tte end To~che for it. involve•• nt with Ot.ro Savin;.
and Loan, Colorado Iprinq" 1. balnv .xplored by W•• ~ord, a Denver
newspa~.
Accordin; to D.loitt.'. caun•• l, Holland and Kart may
bav.
ntad Otero S.viftq. on tranlaetion. that cau ••d 10 ••••
to
ret::••
~
t1~~~ion.
150
Exhibit 5
Lloyd M. Bentsen, Secretary,
Department of the Treasury,
Memorandum of Interview dated
July 20, 1994.
u.s. Department or The Treasury
Office Of Inspector General
Office or Investigations
Memorandum Of Interview
Lloyd M. Bentsen
Secretary
U. S. Department of The Treasury
Washington, D.C.
Mr. BENTSEN, was interviewed on July 19, 1994, at 4:20pm at his office located at the
Department of the Treasury, Main Treasury Building. Mr. BENTSEN was advised of the
identity of the interviewers and questioned about his knowledge about contacts between Treasury
Officials and the White House concerning the Madison Savings and Loan/Whitewater matter.
Also present were Robert McNamara, Jr., Assistant General Counsel for Enforcement and,
Special Agent Joan DWYER of the Resolution Trust Corporation, (RTC) Office of the Inspector
General. Mr. BENTSEN was placed under oath and provided the following information, in
substance:
BENTSEN did not recall ever being advised on the 9 criminal referrals or the existence of the
referrals submitted to the Department of Justice. BENTSEN first became aware of the referrals
and that the CLINTON's were potential witnesses in this matter from newsmedia accounts and
could not recall the date.
BENTSEN did not have any contacts with the White House, had made no plans to contact the
White House and had no knowledge of any Treasury officials contacting the White House on this
matter. BENTSEN stated that he did not authorize anyone to contact the White House on this
Issue.
BENTSEN did not recall any discussion or conversations with Jean E. HANSON, General
Counselor Roger C. ALTMAN, Deputy Secretary on or about September 30, 1993, on any of
these issues or on the ROSE LAW FIRM. BENTSEN was shown a memorandum dated
September 30, 1993, from HANSON to ALTMAN, referring to "The ROSE LAW FIRM",
which is marked as Treasury document #149 & #150, which are attlched to this report.
BENTSEN had no recollection of any such discussion and stated he certainly had never seen
Treasury document #150, which is a September 30, 1993, RTC, EARLY BIRD article in which
the ROSE LAW FIRM is mentioned.
BENTSEN remembered a February 1, 1994, briefing or discussion with ALTMAN and
HANSON regarding the statute of limitations of the civil case on Madison Savings and Loan.
BENTSEN did not recall any discussion on tolling agreements. BENTSEN also recalled a brief
discussion by ALTMAN that he (ALTMAN) was considering recusing himself from this matter
and asked for his (BENTSEN) advice. BENTSEN stated, he advised ALTMAN that it was a
personal decision for ALTMAN since he (BENTSEN) did not have any of the details.
NO PORTION OF nus REPORT MA Y BE REPRODUCED WITHOUT· THE WRITTEN
AUTHORIZATION OF TIlE INSPECTOR GENERAL OR DESIGNEE. TIllS REPORT IS MADE
AVAILABLE ONLY ON A NEED TO KNOW BASIS.
U.S. Department Of The Treasury
Omce Of Inspector General
Office or Investigations
BENTSEN was not advised of the February 2, 1994, White House meeting and had no
knowledge of that meeting until he learned of it in the press.
BENTSEN had no knowledge of any meetings between White House and Treasury Officials until
learning of those contacts while providing Congressional testimony. BENTSEN could not recall
the date he testified before Congress.
BENTSEN had no knowledge as to whether HANSON or ALTMAN had received an ethics
opinion from Dennis FOREMAN, Deputy General Counsel, prior to briefing the White House.
Place: Washington, D.C.
07119/94
Date report prepared:
07/20/94
By: SI A
Alfred J. Coco Cl.~ Case Number: 94-1·031-1
Also Present: Joan Dwyer, RTC,opv
Date of Inteniew:
NO PORTION OF TInS REPORT MAYBE REPRODUCED WITHOur THE WRITI'EN
AUl'HORlZATION OF THE INSPECTOR GENERAL OR DESIGNEE. THIS REPORT IS MADE
AVAILABLE ONLY ON A NEED TO KNOW BASIS.
DEPARTMENT OF THE TREASURY
WASHINGTON
OCNE"AL COUNSC",
S.ptambar 30, ltt3
KEMORANCOM lOR lOCD C. lLTIWf
1)!PO'l'Y SECllETARY
FROM:
SOBJECT:
Th. loa. Law
Steve kat••no. ha. talked with Sua Schaidt (S •• attached RTC
Early Bird).
I have .poken with the Secretary and alao with Barnie
Nu•• baua and Cliff Sloan.
I bave .akad Bill Roelle to keep •• intormed.
anytbinq el.. you think w. ahould be doinq?
I. ther.
Attachmant
149
RIC Early Bird
.,.,u,
tolloru, an ••
.tOI"1..
n..,.
the ottJ.ce ot
anticipat.. will be publi.h.d 13 the day.
ud ...u
flU. "port 1. tor iIItunal v•• only. St.tt
.boald ~oC 1Dto~ report.r. ot .tori.. id.nt1tj.d h.~ tb.t are
betA, ,,"panel by eo.,.tl t.-•.
ft.
CorparaC.
&It..,.
eoa.unj~'tlo~.
~ oppol1tloft of J •••• Jaetlon'. laiftboV Coal1~ioft to
.tanl'r 'fat." ftoainatiol\ vill be report•• 1ft tcmonov'. " ••b1ngtOIJ
.
~.~
• .nato~ .1..1.,. 4.a&ft4 that ltaftl.y ~at••••t w1th .ach
ot the ~lltleblovera· 1n laat v.Ik'. hearin, Ibould V.t
11qn1f1cant lpeculatlve covera,1 conclrnln, vhlth.r .il,le" aove
will fru.trate the no.1n •• and provoke hi' withdrawal.
Th• •0 •• Law rlra'i alla.," Uftd11cl0.e4 confllota ot
lntere.t, and ~t.[n'l He ,ogre'" 'g,u,tlo". that aultlpl.
r.furall to
• Ju.tlce Dep.rtHftt liNt the tin'. -..e.r••
tr1and., and loan. to 1n.olv.ftt "Le, are bel,., pur.uad by the
WI,bingtOft Io.t and the ~.ocllt.eI Ire•••
-- It.v.
Xa~.ano.
'.var.l n.v. or;anll.t10ftl vill l1kely r.port that
today" d•• dlina tor lTe r •• olution authority v1ll bl an unev.ntful
P•••• 9. dUI to the taet that the Senate hal named cont.r... an4
f~ndint llfl.1ation Ihould b. .pproved 100ft.
-- otflce oC
corpo~ate
Co. .un1cat1ona
landr. lIobl •• ' proaotion to Act1n, Dir.ctor of
Slwr1tl.at10n .ho\ll. b. the focu. of an upcoain, Nlclol1al Hortgag.
H.w• • tory
Oft
the
aTC', l.cur1ti.ltlon progra••
-- AM.
rr ••••n
fbi ITC'. u•• ot tha law tira Holland an4 Hart in a Iuit
.,ainat Delo1ttl and Touch. tor itl lnvolv,•• nt v1th Ot.ro S.vin;.
and Loan, Colorado Sprint., 1. beln9 .xplor.d by ~e.tvord, a Denver
newwpa,.r. Accord1n, to O.loltte'a coun •• l, Holland and Hart may
baY8 raf!!.ent•• ot.ro S.v!n,. on tran.action. that cau ••d le ••••
to ~
tit_t10n.
150
Exhibit 6
Clifford Sloan's notes dated
September 30, 1993 and
October 7, 1993
X000983
'1 ~~
-
XOOOge4
~"-\hh~-\ ,w{--~ '#~.~
.1(-- dJoyt
.~dL
· tl~~~ l(~ tiZ,'(~
~c.o-~v~
/011
XCJ09Dr-
siJ1~
,~
_S~SdlVle2J-w~cJ~~.( AtJt;~f~
t;;i ~ -Cl<elkf/l5.
- Stt(~ LPif~ v-- ~
....
-)
-lilje(.lt/)u;-/
_>
.;:,
()1.tk(/~ J;k..//.{cOOj4'{( 1-'7~
-
-
a
~ hK COl..)?.~ r"'~~
--S~ S(,L~ - ~ p. ~ -(LTC ~
·
~![ ~ r, ...-J - Wc:w-L. p~, ~ AYJ
fu1~ IU~
Fila( '<' ~~
c.1 ~!f. M~
Exhibit 7
Memorandum to File dated July 27, 1994,
from Joan M. Dwyer, Special Agent regarding
Addendum to William Roelle's Testimony
eN: 94-1-031-1
DATE:
July 27, 1994
~
rVI!q d~
MEMORANDUM TO: File
~
FROM: Jo
J.
'DWyer
Special Agent
Office of Inspector General
Resolution Trust Corporation
SUBJECI': Addendum to William Roelle's Testimony
On July 6, 1994, William Roelle, Deputy to the Director, Federal Deposit Insurance
Corporation, was interviewed under oath at the Resolution Trust Corporation, 801 17th Street,
Washington, D.C. The purpose of this interview was to discuss alleged Treasury officials
contacts with the White House regarding Madison Guaranty Savings and LoanlWhitewater.
As the writer was escorting Mr. Roelle back to his office to pick up documents relative
to this investigation, he remembered additional information which he requested to be added to
his testimony. The attached document prepared by Mr. Roelle provides the changes to his
testimony.
In addition, Mr. Roelle advised the writer that he believed that Altman's reference to
"Bernie- to mean Bernie Nussbaum.
Attachment
Exhibit 8
Mark Gearan's notes
reflecting the discussion of
the October 14, 1993 meeting
X001047
s:...~!.w.4l-:
~~~~~~
4\t/( ~ ~$A. ~.~
c(U-S+c.
~~ l.J.
~~~V~~~
-~~W~1.cca~ ~
~"*" ~'J.MV~.kf ....
:r,.~ ~~:
Ca,s"'tA~ ~
f
~ W~ ~OAA~:~
,..
1.
t~e
i- se.,
~ -Ii
4:'~ lr
Be
~1 ~~ S,(~·
~....r~
t 3,000
"Be is .,.;r ~~ ~ ""\ls~~r 4.~-t-~
~~
to '4.~
~o ~ ~~ c.kcJu
XODI G48
~~ ~S'~\o~~~
(
~" ~... ~....,:~
~o e \"IJ CAA b~ l' A1J00
IJS~ ~ v;to ~ 1>. ,.\"2.
-
~
(";'UO~\6
1NrJ>4 D.. c;.y{--.;..t
'1"Itt.
~ L p-.
~
r
-
T
~ -
C!.Q s
J
,.oo~... b'- ~8/c
t3..
/'t4JN
'--,
I~?
v4
v;.J.;~
J) ~-~ ~ ~~EtP..
~~ WIb\, ~~~JA ~~
Exhibit 9
Memorandum to File dated
October 20, 1993, from Bruce R. Lindsey
regarding Whitewater Development
Corporation
Personal and Confidential
X001179
MEMORANDUM
To:
File
From:
Bruce R. Lindsey {/~ ..
Date:
October 20, 1993
Re:
Whitewater Development Corporation
()
On Thursday, October 14. 1993. Bernie Nussbaum, Neil Eggleston. and Cliff
Sloan of the White House Counsel's office, Mark Gearan and I met with Jack
DeVore, Josh Steiner, and Jean Hanson of the Treasury Department. The purpose
of the meeting was to discuss a telephone call that Jack had received the day
before from Jeff Gerth of The New York TImes.
Gerth informed DeVore that he is aware that a number of criminal referrab
involving Jim McDougal and Madison Guaranty had been forwarded from RTC'~
Kansas City field office to its Washington office. (Apparently, the Wnormal'
procedure is for a criminal referral to be sent from a field office directly to th(
appropriate U.S. Attorney's office. DeVore did not know why these referral:
came to Washington instead.) Gerth stated that, to his knowledge, Presiden
Clinton was not a target of the referrals •. although Governor Jim Guy Tucker migh
be.
One of the referrals, however, involved four cashiers checks - each for $3,000
two made payable to the Clinton for Governor Campaign and two made payabl·
to Bill Clinton. The checks were dated Apri14 or 5, 1985. All four checks wer
deposited in the Bank of Cherry Valley. Gerth wanted DeVore to find out who
had endorsed the checks. (A check of our campaign records turned up thre
cashiers checks for $3,000 each from J. W.. Fulbright, Ken Peacock, and Dea
Landrum, and a personal check for $3,000 from Jim McDougal, signed by Susa
McDougal.)
1
X001180
DeVorc confnned with the RTC that the referrals had been received in the
Washington office, but had already been forwarded on to the Little Rock U.S.
Attorney's office. DeVore wanted to make it clear to Gerth that the referrals had
been sent to Little Rock before his call. DeVore's inclination was also to confirm
to Gerth the fact of the referrals. He indicated that such confirmation was norma;
procedure. We suggested that instead of confirming the referrals, DeVore should
indicate ·off the record- that whatever had been received in Washington had been
forwarded to the U.S. Attorney's office prior to Gerth's call.
The RTC believes that the funds for the cashiers checks came from a loan from
Madision Guaranty to a Republican, but supposedly the Republican was unaware
that some of the loan funds had been diverted.
cc:
Maggie Williams
Bill Kennedy
Mark Gearan
2
Exhibit 10
NexislLexis report dated
October 31, 1993.
NexislLexis report dated
November 2, 1993.
Removal Notice
The item identified below has been removed in accordance with FRASER's policy on handling
sensitive information in digitization projects due to copyright protections.
Citation Information
Document Type: Newspaper Article
Number of Pages Removed: 9
Author(s): Susan Schmidt
Title:
"U.S. Is Asked to Probe Failed Arkansas S&L; RTC Questions Thrift's Mid-'80s Check Flow"
Date:
1993-10-31
Journal:
The Washington Post
Volume:
Page(s):
URL:
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Exhibit II
Roger Altman's redacted diary
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29~9
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AtWlL ______________
2981'
Exhibit 12
Talking Points for Roger Altman:
information meeting with Mack McLarty,
February 2, 1994
Talking points for Roger Altman: informational meeting with
Mack McLarty 2/2/94
o RTC has been requested by eight Republican Senators and
Conqressmen, including Dole and Kichel, to seek tolling
aqreements from President and Mrs. Clinton, the MCDouqals,.David
Hale, Jim Guy Tucker, Seth Ward and the Rose law firm, relating
to Madison Guaranty.
o Under the RTC Completion Act, the statute of limitations
has been extended to five years. The extension is retroactive
tor claims involving fraud or intentional misconduct resulting in
unjust enrichment or substantial loss to the institution.
o The retroactive five-year extension relating to Madison
Guaranty will expire on february 28, 1994.
o The only claims that could still exist as a result of the
five year retroactive extension are those relating to fraud or
intentional misconduct. All other claims, including any based on
negligence or qross negligence, have lapsed.
o If any claim relating to fraud or intentional misconduct
does exist, the RTC has three choices: (1) allow the claim to
lapse on 2/28/94; (2) commence litigation to preserve it; or (3)
enter into a tolling agreement with the relevant party to extend
the statute of limitations, givinq the RTC additional time to
investigate and determine whether to commence litigation.
o The RTC can enter into a tolling aqreement only if the
other party agrees.
o There must be a basis to bring a lawsuit; frivolous
claims will be dismissed and can subject the attorneys bringing
the suit to sanctions by the court.
o The RTC is currently reviewing the Madison Guaranty
situation to determine if any claims exist under the Completion
Act. (See 2/1/94 letter to Dole.)
o If it is decided that any claim does exist, the RTC will
have to determine which of the three alternatives to choose.
o The work is being supervised by Ellen Kulka, the new
General Counsel, and by Jack Ryan, the new interim Deputy C.E.O.
o It is not certain when the analysis will be completed, but
it will be before February 28.
o I have decided that I will recuse myself from the
decision making process, as interim C.E.O. of the RTC, because of
my relationship with the President and Mrs. Clinton.
3631
Outline of RTClMadison Guaranty Issues:
o RTC has been requested by eight Republican Senators and
Congressmen, including Dole and Michel, to seek tolling
agreements from President and Mrs. Clinton, the MCDougals, David
Hale, Jim Guy Tucker, Seth Ward and the Rose law firm, relating
to Madison Guaranty.
o Under the RTC Completion Act, the statute ot limitations
has been extended to five years. The extension is retroactive
for claims involving fraud or intentional misconduct resulting in
unjust enrichment or -substantial loss to the institution.
o The retroactive five-year extension relating to Madison
Guaranty will expire on February 28, 1994.
o The only claims that could still exist as a result of the
five year retroactive extension are those relating to fraud or
intentional misconduct. All other claims, including any based on
negligence or gross negligence, have lapsed.
o If any claim relating to fraud or intentional misconduct
does exist, the RTC has three choices: (1) allow the claim to
lapse on 2/28/94; (2) commence litigation to preserve it; or (3)
enter into a tolling agreement with the relevant party to extend
the statute of limitations, giving the RTC additional time to
investigate and determine whether to commence litigation.
o The RTC can enter into a tolling agreement only if the
other party agrees.
o There must be a basis to bring a lawsuit; frivolous
claims will be dismissed and can subject the attorneys bringing
the suit to sanctions by the court.
o The RTC is currently reviewing the Madison Guaranty
situation to determine if any claims exist under the completion
Act. (See 2/l/94 letter to Dole.)
o It it is decided that any claim does exist, the RTC will
have to determine which of the three alternatives to choose.
o The work is being supervised by Ellen Kulka, the new
General Counsel, and by Jack Ryan, the new interim Deputy C.E.O.
o It is not certain when the analysis will be completed,
but it will be before February 28.
3632
Exhibit 13
Diary of Joshua L. Steiner
covering the period December 12, 1993
through February 27, 1994
DIABY
07
JQ81U) L. STEINER
I.
12/2/93 - 1/9/94, lines 1-3: Whitewater
(Clinton's real estate investments) and Madison S&L dominate the
news. Clear lesson: release everything right away.
II. 1/24-2/12/94, lines 1 forward: In DC spent long
hours with RA going over how he should handle the RTC's
investigation of Whitewater. The statute ot limitations on
Madison Guaranty cases was supposed to expire 2/28. Should RA
recuse himself or should he stay involved. The hurdle was so
high (fraud) that it seemed unlikely the RTC would bring such or
seek a tolling agreement trom BC/HRC, but the chance existed. RA
originally decided to recuse himself but under intense pressure
trom the WH, he said me would make the final determination based
on a recommendation from Ellen Kulka, the GC. The GOP through
D'Amato began a countdown to the 29th which was particularly
ironic since he had voted against extending the statute during
the RTC reauthorization period. As it turns out, RA's problem
will probably pass when the Congress decides to extend the
statute once again. Pressure on RA will certainly mound next
week when Congress holds hearings on the RTC given that Ricki
Tiegert the FDIC nominee declared that she would recuse herself
from all Kadison related issues due to her friendship with the
Clintons. The WSJ also got into the act with a scathing attack
on RA and Gene Ludwig.
III. and IV.
2/13-2/27/94, line 7 forward: Every now
and Again you watch a disas~er unfold and seem powerless to stop
it. For weeks we have been battling over how RA should handle
the RTC investigation of M~dison Guaranty S&L. Initially, we all
felt that he should recuse himself to prevent even the appearance
9t. a conflict. At a fateful WH meeting with Nussbaum, Ickes and
Williams, ho~ever, the WH told RA that it was unacceptable. RA
had gone to brief them on the impending statute of limitations
deadline and also to tell them of his recusal decision. They
reacted very negatively to the recusal and RA backed down the
next day and agreed to a defacto recusal where the RTC would
h~ndle this case like any other and RA would have no involvement.
We are very concerned that at the RTC oversight hearings the GOP
WOuld hammer away at the recusal issue so ve renewed discussions
with the WH about what RA would do when his term expired on March
30. Once again they were very concerned about him turning the
RTC people they didn't know so RA did not formally commit himself
to stepping down (he could stay on if we had formally nominated a
SUccessor). At the hearing, the recusal amazingly did not come
up. The GOP did hammer away at whether RA had had any meetings
with WH. He admitted to having had one to brief them on the
statute deadline. They also asked if staff had met, but RA
gracefully ducked the question and did not refer to phone calls
he had had. The next day, the NYT ran a front page story on the
meeting. The heat was on. We spent a tortured day trying to
decide if he should recuse himself. I spoke with Podesta to let
him know of our deliberations. Very frustrating"that he was the
chosen point of contact since he clearly was not in the complete
confidence of George and Harold. After Howell Rains of the NYT
called to say that they were qoing to write a brutal editorial,
RA decided to recuse himself. Harold and George then called to
say that BC was turious. They also asked how Jay stephens, the
former USA, had been hired to be outside counsel on this case.
Simply outrageous that RTC had hired him, but even more amazing
when George then suggested to me that we needed to find a way to
get rid of him. Persuaded George that firinq him would be
incredibly stupid and improper. The NYT ran a very mean
editorial which referred to "bone headed conclave convened by
RA.- Lessons: Do what you think is the right thinq early
(recuse); remember that everythinq might eventually be asked
about under oath; don't let the WH qet involved in any way.
V. 2/13-27/94: Such an incredible city. Been
battlinq with the RTC/Madison. Wrote two pages about what has
been going on, suddenly realized that I could be subpoenaed like
Packwood and the most innocuous comments could be taken out of
context. So on that subject, nothing.
Exhibit 14
Fax dated February 3, 1994,
to Mr. Bernie Nussbaum from Jean Hanson
transmitting letter to Roger Altman
from James Leach
Q: . 03 'U
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GE.\Uo\L COl~SEL
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FAX TRANSMITTAL
Office of !be GeDenl Coualll
DEPARTMENT OP 11m TREASURY
IS00 Pc:uuyh'ania Ave., N.W., Room 3(xx)
WuhinltaD, DC 202.20
TllephoM: (202) 622..(J287
FAX: (202) 621-2812
DATE:
m. ~• /1r1
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IIaa 12104"
MI' • ROCie%' C. Al taan
Interi. CEO
Re.olut1on Tru.t Corporation
101 17th
s~r.e~,
waahinqton, CC
KW
204J4
O.ar Mr. Albanr
I aa in receipt ot your February 1, 1994 reapon.e to the lotter
initiated by Senat. ~epub11ean laadership concorninq Madlaon
savine;. and Loan and I All pleased t~ l.arn that the RTC "will
viqoroualy pur.ue all appropriate ramedie.- witb reqard to
Kadleon'. tailure. It seam. .elt-apparent that 1n order tor the
RTC to pursue vlqorou.ly &11 remedies it muet have 011 relevant
intormation at it. di.poaal. Accordinqly, I urge the RTe to seek
and review all Whitewater Development Corporation documents turned
over by the Whit. Rouee to the 3uatica Department.
In ita inve.tigation ot 'Madison, the Minority h.. uncQvered 11nka
Ka~i.on and Whitewater, 80me ot wbich may have contributed
to tne tbrit~'. tailure. Hot only did Jama. and Suaan McOouqal
hold 8iqnit1ean~ owner.hip inter •• t in both entities (approximately
tvo third. 1n Madison and one half in Whitevater), but the other
joint ownera ot Whitevatar (sill and Hillary Clinton) appear to
have benefited directly and inc11rectly trOll the application at
Madiaon re.ource.. [S.e the attacbed memo.]
between
It the White Hou •• chao ••• to u•• - the Justice Cepartment to .bield
Whitevatar document. not only trom ~e pu~11c and Conqra.a, but
tram other qoverruaent aqanci •• , such a. the R're, which nave
leq1t1mate public law entorcement r •• pona1~11itie., it 1. hard to
believe a r •• pon.ible r •• olution ot the isau•• 1nvolved can be made
by requlatary a~thor1tie ••
I have h1qh ree;ard tor your personal inteqrity, but a. yeu know,
t~o. ~. beqinn1nq, it ha. baen an awkWard 11tuat1on to hev. a
pr •• idant1allY appointed and confirmed officer of the Trea.ury
Department also bead an independent federal aqency, the Resolution
Truat corporation (RTC). When thi. P~Q.pec:t w•• f1rat 8uqc;•• ted at
the ~1nnin9 ot the Clinton A4min1atretion, 1t di4
COUtL
COl'~SEL
Ial oo~ c
X001132
Mr. Aoqar C. Al tlllan
'aq. a
'ebrUary l. 199.
not Itrike the Minority .s overly unreasonable tor
g1v.n the tact that no RTC head had b•• n •• lect.d.
I
month or two
However, it hi. been over a year since the Admini.trat1on haa been
in otf1c. and i~ can only bo d.scribed ••• true~urally un •••• ly for
& political appoint.. of an Executiv. brancb department eo make
what are 1n .tt.c~, lAW enforcement ~.c1s1on. to~ an lndepend.n~
tede.al a9-ncy •• they may touch upon the Preeident.
Accordinqly, I would urqo that yo~ requ ••t frca the Department of
Treaaury'. General Counsel an4 Ethie. ottice advice a. to whether
you, aa interim CEO ot the RTe, are obliqate4 to recuse yours.l~
trom any decisions eoncernin9 the re.olution ot Mldison Guaranty.
JU8t II tb. special ~ounl.l law wa. c1e.1qnad to relieve the
Attorney General trom an ethical 411emma of being both chi.f law
entOtcament otticer tor th~ n.tion and chief legal advisor to the
pr •• 1dant 1n circ:umatance. when the Pre.ident or a hi9h level
Admln1,trGtlon otti~er 1- the su»ject ot 1nve.ti9at1on, so it would
appear ethically qu••tionable tor a political appOinte. ot the
Oepartment of Trea.ury to mAke decision. for an independent federal
agency when the Pr •• id.ent oy be imp11cat~ 1n enforcement and
civil action,.
In thi' regard, it Ihould be claar that the ilaue i. net whether a
preaic1ent1ally appo1nted offiCial can overs •• an 1nv88ti9at1on
lnvolvinq the Pr•• ident. Rather the issue 1- that off1cials with
t.hi_ re.pona1bility ahould be eonfirmed tor the jOb with that
particular accounta~ility. A. you vill r.call it was a political
appoint •• conf1rma4 by the Senate that issued a ce •• e and 4eatat
order tor en9aq1nq 1n conflict. ot inter •• t a9&lnet the .on of &
torm.r Pr .. i4ent.
u you knov, d••pite your stl"onq letter to tha Chairman of eh.
HOU..
Banx1n~
committ ••
recomman~inq
&qainat extenaion, Conqr •• a
laat year extended the atatute of limitation. tor civil la~.u1t.
brou~ht a9ainst S'L vron9doera.
Aa you pointed out in your moat
recent. letter, th1. extan.1on "baa aftorded tha R'rC &n opportunity
to inv•• t1c;ate turtbeZ' any civil claima which may be asserted
aqa1nst individual. or entiti •• as.ociatad. with Madiaon Guaranty
for traud, intentional mi.conauct resultin, in unjuat enrichment,
or intentional mi_conduct re.ulting in Iubcltaratlal 10 •• to the
institution.· Civen, howeve&-, the illpendln, r'UM1n9 ot the atatut.
ot limitation. for cart.in kind. of ace1on., time i . Clearlr ot tn •
••••n~. tor the R'l'C to make jud9ments about civil accountab 11 ty ir
tbe tailure ot Madiaon.
F1nally, I would like to reiterate lIy reque.t, pursuant to Rules>
an4 XI of tn. Rou.. RUl.. for all document. ralat.d. to Hac11:sor
Guaranty Sav1nqa and Loan, tittle Rock, Arkana... A. you know,
~I
:0:
e::
2812
CE.\U\L
COl~SEL
~oo~
X001133
Kr. loqer C. 11tlllan
Paq. 3
February 3, It'4
on December g,
docum.n~s
199], I wrote the RTC requeat.in9 aeee •• to all
related to Madiaon Guaranty and ita .ubaid1ar1...
.
Hou.e and Co=mitt•• rtul •• , Rousa practice., and judicial precedent
auppcrt the
~unct1onal
p~opo.ition that
~o the
counterpart
the Rankinq
Chairman to~
Hino~ity Member ia the
eomm!~~.e a~~1on.
Th1.
~o~WII.nt. macS. ~ the Jtanklnq
b.inc:r the ca •• , • "equ•• t tor
Minority Keaber b•• parallel standin9 with • request made by tne
Chairman ot the CODittee. The RanJtin9 Minority Meml:Mtr clearly has
• voice in the proca •• an4 is entitle4 to intormat1on that vill
enable
the Rankin9 Minority Mesber to carry out his
eona~1tut1onally mandated oversight respona1bilitiee.
Therefore, the courtesy of a detinitive reply to this document
requ •• ~ 1. r.queate<t ~ 12 noon, "on<1&y I February 1, 1994. On this
~a~~.r, it 1. urqed that you a180 consult vith the Ethic. orfice 4S
to eae relevance ot the previou.ly d1.cu •••4 recuaal i.au ••
Aqa1n, let m. atr ••• that ~o the deqree & conflict situation may
.x1.t in this matter in no way ratlects on your paraonal integrity.
It 1. simply an aWlCWard c1rc:um.tance 1n contrast to a personal
~arraa.ment.
Sincerely,
tl~O·
..
L
A. LEACH
~
RA
JAt.:qp
Enclosure
n9 M8lIlD4i&"
c
ft.
zoz ezz
:.42
CC"EJl.-lL COl~SEL
iii DOS.' (
X001134
TO:
Con;r •••aan Leach
FROMt
Bankin; Minority Statf
HE:
Kadi.on Guaranty ("Had1.on")
In reviewinq document. related to Madison in the po.aasaion ot
Minority 8ank1ng, w. have co.a acros. material which may indicate
direct payment ot a loan ot Bill Clinton'. by Madison th~gugn a
aub. icHary.
Since the Minority'. lnv•• tlqat1on i. concerned with the possi~le
aiau •• ot taderally 1n.~ed tund. to ••• lat Whit.w.t.~ &nd/or the
tormer Gov.rno~, ve thouqht v. should share the tollow1nq
information vitA you.
.
Baaed on documentary evidence av.ila~18 to th. Minority, it
appears that Kadison Karkat1n9 serve4 , 1n a~ le.at on. 1natan~.,
a. a eon~u1~ ot run~. tro. Kadiaon Guaranty to Wbltewater and
covernor Clinton. It this 1s correct, it would appear that
in.ured fund. trom the tailed Madison Guaranty were diverted and
directly benet1tted tbe Governor An~ his 1nv•• tmont in
Wh1t.va~.r, a clai. Clinton had denied.
DOCD'd:MD'!IO.
*
•
In 1983, Bill Clinton obtained a loan from Security Bank of
Para90ul~,
Ark.n ••• tor approximately $~O,800 (loan '97~
SIS, Bill Clinton). The money from th1a loan vaa uaed to
pay off the remaining balance of • loan at Madlaon Bank and
t~t of K1nq.ton, Arkan.a. that va. provided tor the
purpo.. of eon.trUct1ng a modular hom. on lot 113 ot
Whitevater Eatate.. The loan at Madtaoft Bank wa~ prov14e4
in 19.0 to Hillary Clinton ,in ~h. amQ~~ of $30,000.
on
Nove~ar I, 1185, Jam •• Kcoouqal .ant a l.tter
accompanied by • check to Charle. Campbell, Vice Pr.sident
ot security Bank of Paraqould, tor.$1,32Z.42. The latter
fro. "CDoUia~ .tat•• that the en.cx 1. principal an~
inter ••t payment on "Note "51-58S, 8111 Clinton," [Note:
It appear. that the loan n"mber 1. a typograpbical error
with the .uper1mpoa1nq of number. 5 and 7 in the tirst thre
41CJ1t•• ]
0% 03 U
ttl
11:5.&
!o: ez:
2182
GE.'IU"L COl~SEl
X001135
( 2 )
•
The check MeOOuqal enclosed with hi. letter to Mr. campbell
1. & Wh1tgwater Oavelcpmene ccrpo~.~lon eheck dated Novembe~
7, ltl~. The 104n nu.m1Jer retere"''':4ISd on the memo portion ot
the
~hecx
10 "Note It75-585."
•
Accord1~':1
~
•
A 1986 Federll Hom. Loan Bank Board exam 91ve. the
impre.sion tbat Madiaon Kark.~ing wa. largely a sham
ccrpora~!~n uaea to divert tederal1I 1nsure4 resources to
in.i~ar~.
The exam note. that PUnt 1 1986, Suaan McOougal
owned Madison Marketin9'- The report al.o .~ate. the
the check ledqQr. tor tha Whitewater
corporation (WOe), the corporation'. checkinq
account ,1&41 ";!lO follovi:-,q tNalane.8' $189.50 on 1.0-1.0-8'i
and, $1 •. 49 ~n 10-31-~5. Rovever, in o~de: to cov.~ the
payme~t ot ~7,J22.42 on the Clinton loan, • dapoa1t 1.
recorded on Nov~r 8, 1985 in the amount ot $7,500.00.
T~e ~epoBl~ 1$ ~~a~.~ aa comin9 from "Madi8on Marxet1n9.w
o.v.lop~~~t
tcl1o,,1nql
"Madison Market1nq i. paid to~ doinq all the ienaral
a4vert181ni tor Madiaoft Guarsnty and ao.t ot the
advert1sini tar Madison Financial'. land develop•• n~
project.. All of Madi80n Market1nq'. bus1ne •• 1.
derived trom Kadleon Guaranty or it. lubei41ar1e ••
Since 1913 the.e payment. total $1,532,000.-
-Given the evidence of Madison Marketinq"
invoice., it
i. qu•• tionabl. how much o~ the.e advertising service.
are actually perfonled by the t1na. The actual wo:,x
• •• appear. to !)e performed by other.. It would appear
tha~ Madi80n Guaranty could have an .mploy•• pertor.
.~ilar work tor much 1••• Money.-
-Mr. Latham [an otficer ot Mad1.on] .tated that Madison
Karketln9 mada no payment. to any atockha14er.. Thi •
• tatamen~ 1. false. Aa part ot a te.t tor luch
payment., the examiners 41acovere4 two remittances frau
K&c1ison HarkatJ:nq to Susan KcOouqal [a larqe
atOCkhol~er ot Ma4ison] Which total $50,000.
Th1s was
a ta.t, and there may be additional payment•• CQJICI.OIICIr
Givan tha above
el~eum8tane8 •• 1t would ~pp.ar that tad.rally
inaur.d 4.poait. (1 .•• , funds fro. Madi80n GUaranty through
Madison Marketing), Whicb, with tha later tailure ot Madison
Decame, in ettact, taxpayer obl19atlan., ware tranatarrad for th.
41rect paraonal benetit ot the tormer aovarnor.
1!t 202 822 2U2
c:t.\U\L
COl~SEL
~00110
X001136
( 3 )
was treated a. an affiliate or relatld in~.r •• t of Madi.on
Qua~anty and eh.~.tore .ubj.c~ to contlic~ of intereet atatute ••
fram a 18911 perspective, it could be argued that the HcDousall'
con~rol11n9 1n~lre.t 1n Madison Quaranty and their substantial
ownersnip interest in Whitewater coul~ quality Whitewater a. an
"affiliate- or Mad1son Guaranty. Even it Whitewater 1s not
conaider.d a eube1d1ary, related intere.t, or attiliate at
Madi.on Guaranty, .ucb an extenaion ot fund. to a presumably
-unattiliated- entity would be very unusual and euapec~.
It hal been publicly reported, with re.pect to thi. loan
repayment, that been Wh1taV1lter and the C:l1n~on.a took • t&X
~eauction related to intereat paid on the same loan -- Which the
Clinton. later recognized •• improper double deduction atter an
artiele ran in the Ney York Tim... What ramaina unclear is the
larger que.tion ot whether the lund. provided ~y Madi80n to
reduce the Clinton'. liability were proper or properly reporte~
a. income tor income tax purpo ••••
w.
have receivecl broad hint. trOll within the RTC
enat the aqency has ha4 under review money traneter. trom Madison
to Whitewater. We will not know wbether thia type of activity
~ae mora pervaeive and pa~ ot • 1arier pattarn unl ••• , and
antil, the 49ancy provid•• u. the document. v. have reque.~ed.
It KAdiaon provided any direct or indirect a •• 1atance to
Whitewater, presumably halt the value of such would redound to
the advanta;e ot each ot the balt owner.. In any re9ar~, the
above mone! tran.ter underscore. that than Governor Clinton had
personal 1 abilities reduced by a payment trom Xadiaon. SUch
payment pr •• umably carri.. .thieal aa well a. tax imp11cations
and i. part and parcel ot the $47 to $60 mi1110n eatimate4
taxpayer 10•• at Xadl.on.
As you know,
Attachment.
GE.''ERAL COl;':SEL
P.O.
~O
170
Bank
PARAQOULO. ARKANSAS 72450
~tlmblr
30, 19l1
Govtr=:o lill Clinton
1100 Center
Little RccJc. AA 7220S
Deu Gowrnat" '11:1ton:
!=la.1ei is & a:1VY of ou.: c:h.e<:k 11%677 in the aMlt of
S%O,'OO.OO !"ept"e.Hftciq the proceeds cf ~ note. 'the
oririnal was mail" t.c: ~la4iaon DW G TM';, K1ni3ton t
Az'k&iU.
ax:/llll
N~
SectDity Sank
,.. O. lOX .70
P."AGOu .. a, A~"AN'AI 72'10
12Fi77
9--30
- - - -____
1'-a
81.&1411
PAY
S.
lDtIOO.CO
NOT mGOTIABLE
GE.\"EJU,L
Clll~SEL
~OO(
X001138
JIM
M~DOUCAL
P.o. Box 1!83
Lictll lock,
A~kan •••
Rov.mb.~
H~.
a,
71203
1985
Charla. D. Campbell
Vica 're.idaa c
Se~ur1ty Sank
P. O. Box 670
'aralould, A,kac.a. 724S0
Ie:
Note
O•• r
~r.
#9~7·~8'.
8111 Clinton
C&mpblll:
1s a
fer $7,322.42
Vater ~avelo~m.Qt Corporat1oQ eheek
rapr ••• ac1c! ~~1Qci;&1 ~&y~eQ' at $~,OOO
and incer.lt paym.Dt at ~2. 22.42, aD tbe abovi nota.
En~los.d
Thank you for
~lta
t
you~
attenticD to thi. matter.
Sine.rely,
~ '?J11 JL?~
Jim MI:001.11al
JH/sl
Ene
0:': O:S .. 'U
11: S8
f:!, :!02 8:!2 2112
GE.\U,L
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Exhibit 15
Memorandum dated July 22, 1994, to
Francine Kerner from Stephen McHale with
documents pertaining to
the Secretary's schedule
DEPARTM~NT
OF THE TREASURY
WA5HINGTON, D.C. Z0220
July 22, 1994
MEMORANDUM FOR FRANCINE KERNER
COUNSEL TO THE INSPECTOR GENERAL
fROM~
STEPnEN J.
MCHAL~
DEPUTY ASSISTAN
(ADMINISTRATIVE
GE
&
RAL COUN'SEL
G NERAL
LAt~)
Attached for your review, are documents reflecting the
Secretary's schedule. We have just become aware of the existence
of these record! and provide them to you so that you may
determine whether they are relevant to your inquiry.
Attachrr.ents
February 1994
1 Tuesday
8:00 AM
8:30.AM
9:15 NIi
10:30 AM.
1120 AM·
11:30 AM·
12:00 PM
12:45 PM Altman, Hanson S. Steiner
2:15 PM
3:00 PM
4:20 PM
4:50 PM
6:45PM
Senator Lloyd Bentsen
began his day a t _ _ _ _ _ _ __
TIME
7"":" "3s./
TELEPHONE
LOCAL!
L.D.
---_. --
ACTIVITY
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3 Thursday
7:30 M1
10:20 N..1
10:30 AM.
11:10AM
11 ;50 I>M Ro~er Altman & Jean Hanson
12:45 PM .
1:45 PM
3:00 PM
3:30 PM
4:20 PM
4:40 PM
6:10 PM
Senator Lloyd Bentsen
began his day at-- - - - - - . - . ----~---
TIME
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Exhibit 16
Memorandum dated February 23, 1994, to
Roger Altman from Dennis I. Foreman
regarding recusal on RTC matters relating to
Madison Guaranty S&L. Attached to
Foreman's memorandum is a memorandum
dated February 18, 1994, to Roger Altman
from Arthur Kusinski relating to RTC Madison
Guaranty matters
Oe:PARTME ..... T OF THE TREASURY
W.a.SMINGTON
February 23, 1994
MEMORANDUM FOR OEPUTY SECRETARY ROGER C. ALTMAN
FROM:
SUBJECT:
AI
DENNIS I. FORDiAN
,C\
DEPUTY GENERAL COUNSEL and. ~ -~
DESIGNATEO AGENCY ETHICS OFFICIAL
Recusal on RTC Matters Relatinq to Madi50n
Savlnqs , Loan Association
Guaran~y
I have caretully reviewed the attached memorandum ot February 18
to you trom Arthur Kuclnski, RTC's Senior Ethics Oft1cial.
concur fully in the analY6ls and the conclu,ions of that
memorandum.
Attachment
I
~"o, ""ON
""If
eOI~O'ArION
•
•.,.n.c
... n.cn.
G'
Fabruary 11, 1994
Jr::D~1nl
TOa Roq.r Q. Altaan
Intaria Chi.t txecut1v. Ott1cer
nOXa
.~C'tl
You haye aouqht advice tram your ~c ethic. counaalor .a to whe~er
YO'\I..r lonqat&1'ld1nc; paraonal ralatiorushl., v1th the Pre.id.nt q1va.
rl.e to • 1e9a1 ob11qat1on to r.cu.e your •• lf tro. mattara that may
coae betore the R'I'C t.hat _y atf.ct f1nancial 1ntare.t. ot the
rr •• 1dent or hi- t&a11y. I have caretully con.1dere~ your inquiry,
and conclude tJl.t the l1.el.10n ""ether to partiCipat. in auch
uttar. i . no~ aan4atad by atAlc • • t.tuae or requlation.. Thu., you
aaye ~e d1.c:ration to part1cipate or not, •• you det.rmine to be
appropriate. I not •• hovever, that it 1. not n.e •••• ry tor you to
4acil1e vnetber to partic1pata ln any particular mattar until .ucn
tiaa a. the . . tt.r eo ••• beror. you.
The only ethic. at.tute or requlat10n Which 1e relevant to your
requeet tor advice 1. , en l'15.501 C- •• ction 502-), which 1.
entitled ·Peraonal and lu.1n••• "elation.hip.-.
That pr ov i.lon
encouraqe. an otticial ¥ho hAe a relation&h1., vith • per.on who i .
a p~y to a eovernaent aattar 1n vhlch the otticial i . called upon
to aet, and i . eonearna4 that ~. relation.hip voulc1 rai.e an i.aue
ot iaparti.llty, to eont.c:t t.he aqency'. ethic. ott ic:1al.. you h.ave
cione .0.
tth1c. ottic1.1. than auat
the
by ,
Pre.i~.nt
eTa
4e~arw1ne
whether your relation.hip
v1~
i . • ·covered relationshLp· a. that tera i. dettned
l.3'.502(b)(1).
Otficial. have a ·covered relationship·
v1t..b:
(1) a -per.on· vlt.h vtlca the attici.l has or s.us •
bu.ine •• , con~ac:tual or oth.r tinancial relation.hip; (2) a a.aber
ot their tlou.&holc1 or a relatlve with who. they have a elose
per.onal relation.hip; (ll a -p.raon- with vho. earta1n ot the
10' ,,.,...,. HW
1161tW'.Y'UI.
oc:. ~
34 7 ()
2
otticial'.
relativa.
has
or 5eelts
employment
or
.imilar
relationships; (') a ·peraon- tor who. the otticial haa .erved aa
an amployee, attorney or in a similar capacity vithin the laat year;
and (5) an orqanizatlon othar than a political party 1n which the
ottic1al i. an actlve p.r~1cipant such a. a chairman ot one ot the
or;an1Ia~ion'. casaitt....
For purpose. ot the.a ra9Ulation., tha
tarm ·peraen· <1oee no~ 1ncl\l4. the !'ecieral Coverru:.nt and/or
ott1cial. ot the rederal ~varnment actinq in thair ott1cial
capacities.
, en l6l'.102{lt).
xou clearly have none at th·•••
relation.hips vith ehe Pr •• idane, and therefore you are not in a
·cov.red relationshlp· wit.h hls.
Aa the .ection 502 regulatlon
operate., only ·covare4 rel.eianships· .tandinq alone rai ••
questiona ot appearance. or los. at 1~artia11ty a. a .tatutory or
revulatory .attar.
In aonai4ar1nq your raque.t tor advice, I &m avare that your only
relation.hip vi~ eba pr •• 1eSant 1. ona that yculd be fairly
Charact.riz.4 a. a lonq.~andlnq peraonal friendship. Royevar, you
and tha Prea14ant do not now and have not in the past participatad
toqeth.r in bu.ine •• or tinanclal transactional. While a personal
relationship .uCh as :toura v1th the Prasident is a ractor to be
con.idared (alonq v1~ othar.) ln dac141nq vhather the circumatanc ...
rai.e a qu •• t10n a. ~o your i.partia11ty in a matter that may attec~
the Pr.a14.nt'a ln~are.ta, atandlnq alone it i. not determinativa.
In i~. Preamble to tha publlea~lan at the t1nal Executive branch
.eandard. ot con4uct r~lationa, OCI .pecitically conaieSerad
vneth.r a ·clo•• peraonal friendahlp,· atand1nq alone, sho~14 be
conaidar.d a ·covared relation.hip,· and decided that it ahould not.
S, ra 3502' (l"l).
I have eonaulta4 vlth the Orrlce of Government Ethic. concarninq
t.hi. i •• u..
OCZ belteve. that ywr declaion, aa to "het.har to
pa~lc1pat. in an aTe .at~.r that •• y atrlct a tinancial lnttre.~
ot the Pre.ieSent, 1. not a aattlr that 1. .andated by ethica
.tatutee and requlatlon.. acE also believee that the ethic. advice
I provided to you 1n ~ •• e cir~tanee. i. Yithin the diacration
a Title 11 0.1. Coda, .ee~ion 101 prevent. an otticial fro.
tar the coYemalnt ln a .atter attectinq a tinanelal
inter •• t
of
the
ott lelal or carta in other peraona and
orqanizat1on.. You hAve neithar a peraonal tinancial interest 1n
the .atter. betore the aTe nor I relatlon.hip vith the President
(WhO aay have .uch an lntlre.t) ot the kind that is relevan~ tor
purpo.e. ot 11 O.S.C. lO..
Sletion 10. vould i_puta ~o you tha
tinanc1al intarese ot ~a PTa.l~lnt only it he yera your qeneral
partner or a per.on Yith V1\oa yeN v.ra neqotlatinq or had &r\
arranqament tor proapectlve a.ploy"llant. Thus, t.hat provi.ion do ••
not creat. any bar to your part1cipa1:1on in ebe RTC'. daci.1on.
concerninq ~o.e . . ttar ••
~ic1patln9
3471
J
ot
otticial o! tha attactad aqencYi ~d th&~ ~h. deciaion
matter. that may involve the intar.ats
your ~1.cration. I have alao consulted
v1~ tne O•• iqnata4 Aqancy ~1ca Otticial at the c.part:Qn~ ot the
Trea.ury vho concur. ~ith . . in thia analysis.
~~a a~1c.
vh.~ar ~o p~icipata in RTC
ot the Pra.i~en~ 1. within
In a\Ulmary, 1t 1. .y opinion that thua i. no 1a«;a1 rea.on to
you rrca ac~lnq on .ucn .attar.. R.c;ard.1 ••• ot whether you
4.cid. to r.cu •• yc~a.lt. thare v111 b. no laqal objection to that
4a,,1.10n.
precl~c1.
UCCXlIlD't)l. flOW I
In d..c:141nq vt\.t.har to raC'IJSle Yo\Lr •• lt I I rec:ommen4 tnat you
con.lc1ar c.rta1n 'actora 1n •• ~inq your d.eciaion. eartainly, you
&hould
take
1n~o
consideration yO\U" lonq.tandinq peraonal
relationship vlt.h the Pl-eaid.ant.
You ahould a180 conaid.er the
natura anet iaport.nc. ot your role a. the RTC'. CEO in the Kadiaon
aatt.r; the aen.lt1vl~y ot thi. &att.r; the ditticulty in a •• 1qninq
thi. aattar to anothar ind1vld.ual at the R~C; the lik.llhoo4 that
• ra •• ona~l. paraon v1th (ull Enovladqa ot the tact. would. qua.tlcn
yO\.1Z 1.ap~ia11ty; and tne acract that this ... ttar may have u.pon the
Pr.a1~.nt'a t1nancial interaata. Th1a 11.tlnq 1. not exclu.ive, anc1
you . . y haye othar tactor. ~ich you &&y vant to con.ider a. v.ll.
Tha~ 1. v1th1n your dl.cret1on.
In con.i4arinq th ••• tactor., I or
cour••• ~and r.ady to advl •• you 1t you should ao d •• ira.
1inally, t.he r~l.t1ona do not require c;overnm.nt ott icial. to
racua. th . . . . lv.. troa a~lona wbich are noe sp.citically barora
thaa. Therefore, you aay v1ah to dat~r a daci.ion on your racu •• l
...."t11 .uCh t1. . ae a particular a.pect ot the Kadi.on c;uaranty
. . tear 1. prea.ntl4 to you tor con.i4eratlon or d..c1aion. J
34 "7 ~
I
.rtanded.
und.r.t.and
t.hat
t..he
atatute
of
lJ.Blitation.
may
be
Exhibit 17
Letter to Bill Clinton
from Roger Altman
~/.
THE DEPUTY SECRETARY OF THE TREASURY
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M\Yn\J~o,J~. ~ ,w~L()C.I2:(' '1U'( 11-k: ~fhN1t S~MNr m~
l-Vt~ ChVSe).
Exhibit 18
Letter dated March 2, 1994, to Riegle
from Altman
~..,... ===
RTC
RES C L U "0'.1
,r
,7 U S
r c;:) f'< PO n ~ " 0
N
R~h.nl! fhr L n\l~
R"IOrlnt: Th~ Lunlidtn'~
March 2, 1994
The Honorable Donald \V. Riegie. Jr.
UniLed S utes Senate
105 Dirksen Senate Office Bullding
Washmgton. D.C. :0510
Dear Senator Riegle:
I testlfied before your Commmee iJ.St Thursday in connection with the semi-annual Oversight
hearings on the RTC. There was a dISCUSSlon. as you remember. of a meeting which I had
with representatives of the \Vh..ite House. As I indicated, no non-public information was
provided at that meenng on any aspect of the Madison Guaxanty maner.
'Nhen Senator Bond asked me at that h~g whethct any other communications had taken
place between the RTC and the White House, my response was -not to my knowledge". I
still have no knowledge that any such discussions occurred.
But. I have learned today of cwo conversatlons which did take place betWeen Treasury staff
and 'Nhite House personnel on this matter. My information is that both related to the
handling of press inquiries.
I would appreciate the opportUnity
[0
amend the record aa:ordingly.
Roger C. Altman
Exhibit 19
Letter dated March 3, 1994, to Riegle
from Altman
? F S C L :.; T/ 0 N
,',? US
r C:J n p 0 n A r f 0
N
RUDIY,nll The (roll!
Restortn, The Canf.orncr
March 3. 1994
The Honorable Donald W. Riegle. Jr.
United States Senate
105 Dirksen Senate Office Building
Washington. D.C. 20510
Dear Senator Riegle;
M you know, I testified before your Committee last week in COMection with the semiannual Oversight hearings on the RTC. I was asked about any contacts which I had with
representatives of the White House on RTC matters and described a meeting which I had.
I would like to expand the record as follows. rll"St. to the best of my recollection, no nonpublic information was provided on this case to representatives of the White House during
that discussion. Second, it is my understanding that RTC staff had already had discussions
with Senator D' Amato's staff on statute of limitations issues. Third. the Treasury Gene.rai
Counsel. who also attended the meeting, has advised me that before that meeting she sat
down with this Department'S designated Ethics Officer. She informed him of the purposes of
the meeting and asked his view. He advised her that he saw no problem.
shon. there was no discussion whatsoever on the substance of this case. "That's because I
never have had, nor have, any knowledge of the substance. I have received no documents in
that regard. nor otherwise received any information on the substance of this matter.
[n.
Roger C. Altman
336"
Exhibit 20
Memorandum dated March 1 1, 1994,
to Ed"Ward Knight from Eugene Ludvvig
()
MEMORANDUM
Comptroller of the Currency
Administrator of National Banks
WashIngton, DC 20219
To:
EDW ARD S, KNIGHT. EXECUTIVE SECRETARY
From:
EUGENE A. LUDWIG, COMPTROLLER OF TIlE
Date:
March 11. 1994
Subject:
GRAND JURy
CURRE.~CY
SUBPOE..~A
As indicated in my March 10, 1994 memorandum to you, I have directed the acC's Chief
Counsel's Office to conduct a thorough review of all OCC records for any document or
communication which may be responsive to the Grand Jury Subpoena to the Department of
the Treasury from the Office of the Independent Counsel. The Chief Counsel's Office was
already conducting a review pursuant to a request for infonnation made by Senator Bond
during the recent Senate Banking Committee hearings concerning the Administration' s
banking agency consolidation proposal. Senator Bond's inquiry was whether I or any
member of my staff had discussed the consolidation proposal with any member of the White
House staff and, if so, whether questions relating to Worthen Banking Coqx>ration. Worthen
Bank of Little Rock, Worthen Financial, Madison Guaranty Savings and Loan or Whitewater
were ever raised. The Chief Counsel's Office review is now complete, and the infonnation
in this memorandum is based on that review and my own best recollection.
Enclosed are copies of my daily meeting schedules, my telephone logs. both incoming and
outgoing. and a summary sheet indicating calls between myself and the White House staff.
from February 1993 to the present. I am supplying these records of meetings and calls to be
as fully responsive to the subpoena as possible.
Although I am certain that the Whitewater matter was mentioned in a number of meetings
and calls referred to in these materials, to the best of my recollection it was mentioned only
in passing or in generalities, except as described below. Similarly, Whitewater was
mentioned in passing in a number of infonnal conversations and on social occasions in which
I participated with various members of the White House staff which are not reflected in the
enclosed official meeting schedules and telephone logs. The only occasions on which
Whitewater was discussed other than in passing or in generalities are also discussed below,
To the best of my knowledge, no infonnation was exchanged by me or by the White House
except a passing reference to public information.
I can only recollect two discussions In ~ hlch th~ SUbJ~Cl of Whitewater or Madison Guarant\
was m~ntloned other than in passing. On (h~ first occasIOn. during the Renaissanc~ Wc!d:c!~d
gathering that took place at Hilton Head. South Carolina over the most recenl New Year
holidays. the President asked me whether it would be pennissible for me, as a lawyer
kno\l.ll!dgeable about banking law. to provide advice and counsel on any of th~
legal:regulalOry issues relative: to the Whitewater maner. Beyond asking this question. the
only infonnation I recollect that he imparted to me was that he had done nothing wrong. and
111Oreo\er had lost money in the transaction.
Pnor to discussing the matter with the President. I sought the advice of the White House
Counsel's Office and others regarding the pennissibility of discussing Whitewater with the.
PreSident. I spoke with Treasury General Counsel Jean Hanson and White House Counsel
Bill Kennedy and Joel Kh::in. If my memory serves me correctly, I might have spok~n ~lth
Joshua Steiner or others briefly, trying to track down Ms. Hanson or the White House since
this was a holiday weekend. I told them that I was not certain whether to discuss the matter
with the: President. and knew very linle about the matter or the White House response to It.
Based on the advice I obtained. I detennined that it would be impermissible for me to discuss
the matter with the President or the First L1dy. Accordingly. we did not discuss the matter
The other occasion occurred on January 19. 1994, when I contacted Margaret Williams of
the White House staff and offered my own unsolicited view that the White House should
promptly provide full public disclosure of all materials associated with Whitewater. if that
had not already been done. I also said that I thought they should devote one full-time lawyer
and: or other full-time staff to the matter because of the great public visibility it was getting.
Otherwise::. we did not exchange any information.
As pan of the Chief Counsel's Office review. we also interviewed other oce staff membl!rs
and had them review their meeting sche::dulc:s and telephone logs. As a result of that re\ie::w.
a number of references to routine meetings and other contacts with various members of the
White House or Treasury staffs have also been identified. Because none of my staff
members can recall any substantive conversations about Whitewater with anyone from the
White House or Treasury. I am not enclosing any of these schedules or logs.
The only other documents we have found that are responsive to the inquiry are the copies of
FOIA requests from The Baltimore Sun and The Washington Post to the FDIC requesting
documents concerning Madison Guaranty Savings and Loan. Both leners were sent to me as
a counesy by the FDIC. after I was assured that they were public documents. I forwarde::d
these leners for infonnation only to Messrs. Bruce Lindsey and David Dreyer at the White::
House and Messrs. Frank Newman and Joshua Steiner at the Treasury Department.
~
'")
..... 1
I
•. f
,
~
-J-
As you know, as Comptroller of the Currency I am an ex officio member of the board of
directors of the FDIC. As part of his review. my Chief Counsel's Office has reviewed
whether or not any matters or non-public infonnation relating to Whitewater came before (he
FDIC board or were otherwise brought to my anent ion during my tenure, and has confinned
they did no[. Likewise, as Comptroller of the Currency and FDIC board member I have no
responsibility for any matters which may have come before the Office of Thrift Supervision
or the Resolution Trust Corporation. To the best of our knowledge, there was no contact
between me or any member of my staff on any Whitewater-related maners which may have
been pending before those organizations.
As previously indicated, neither my staff nor I have destroyed or otherwise disposed of any
document or communication which may be responsive to the subpoena since receiving your
March 7 and 9, 1994 memoranda.
My staff and I understand that we have a continuing obligation [0 preserve any document or
communication found or created which may be responsive to the subpoena, and we
understand that we have a continuing obligation to infonn you if any such document or
communication is found or created. Accordingly, we will provide a copy of our response to
Senator Bond's inquiry and any other document or communications which may be responsive
to the subpoena, as soon as possible.
I would be pleased to provide any additional infonnation I can concerning any of the above
to the Office of the Independent Counsel. Please contact William P. Bowden, Jr. the OCC's
Chief Counsel, if we may be of any further assistance.
r
Eugen A. Ludwig
ComptroUer of the Currency
Exhibit 21
Letter dated March 2 1, 1994 to Riegle
from Altman
I1ESOL IJTION ,guS( CORPORATION
Reoirint 11K (tIPS
a...fW1I1' 1M cOllr~r<la
MArch 21, 19')"
The HonorDb16 Doe.alcS lUcsle
united Stala Senate
lOS Dirlaen SenAte Office Bui1t11n2
Waahinston, V.C. 2mlO
~r
Senarot JUe:!c:
1 have beeD contiAuln& III ~tivc rcvie'lt' of ell my fila, pbOllc lop and other
irlformaLiun, with the auiataacc or Ccnwet livery coatlet, recatdll'&'t of ~ce. is
boc:i.tI.g. fcviewed. As you ma), know, I geoe:ally att=d meetint~ ;n the White BoU$C &hrec or
mo~ UD\C3 & day. and am em the te1cphcnt with White Hou.~ atat! even more often. It i3
diffi,ylt to recall every briaC aJCOWl.. BI1t, I would lilce to add 10 the reoJrd.
In my t.tstimony, I referred to one ~SWltivc communication. and, upgn further rcvi~, that
is .till my view. Tbe me.edq It the Whi~ Ho~ on Fcbnwy Z rcl.a.t=j proc.cd~ iuues
which perta.i11 to 1111 RTC da1m or cue. Thc:rc Wi,I not, a.acl ~Wd 110' havo bee, any
c;1ilC'Uts10n on t~ lubmn.cc of me~. t never had my information on it, or Ill)' oth.r iTe
=
cue.
'Bd1m U\a.t me=1ng CIldcd, I abo in!onncc1 thox in aI!I!n4anct thai 1 wu ~ the ~~e
ot ~sa1. A tow day. I&r that mcc:riD" I 'POD with Mr. McI..atty briefly on the
telephone with the ~ ~o. A.)'eN know. on FeeNll}' 25, 1 L1.eddl"J1lD n:IC'QIC myJClf
and did $0.
The nilht before my Pebnwy 14 _meny, I informed Mr. Ickes by phono that I would
at\.Qounr;:e that I \Io'U Aleppine doWn from the lTC the Imt nwrnin&. That 'AS, kl4.=d,
aMounced on ICheduIL Also. around the arne Lime. I lilcrally bumped into Mr. Nuublum
ill a White HQIJ.te c:orrtdot. He co1t\ me that Lhe Ad.mW.atration ..,ould 100ft be IUbmittin8 its
nominee. for permanent llTC head.
61D~
The Honorable Donald
March 21, 1994
Page
Ricgl~
~·o
I have d(.mc my bC3t to rcc:all ~ery c.ommuni~on with White House :!lW1 on anythicg
whleh C(Jwd be connected to this marter. I hope that this is helpful.
619 ~)
~*
TOTAL
rACC,OO~
••
Exhibit 22
July 22, 1994, Treasury Memorandum
on Legal Questions relating to the OIG
inquiry
....
~
~
-.... ,'"-
.:......
\~
tr-t-
OE,..JARTMENT OF THE TREASURY
WASHINGTON, C.C 20220
~,1
-......::.::..~.,./
July 22, 1994
ME~10RANDUM
FROM:
SUBJECT:
FOR FRANCINE J. KERNER
COUNSEL TO TIlE INSPEcr~ONERAL
KENNETII R. SCHMALZBACH
ASSISTANT GENERAL COON
{AGL)
Legal Questions Relating to OIG Inquiry
This responds to your July 6, 1994 request for background iLfolhlation and legal opinions
in connection with the inquiry by the Office of Inspector General into communications
between Treasury and the White House concerning Madison Guaranty Savings & Loan
Association and related matters. You asked that I not discuss your questions or my
proposed answers with a number of individuals who were prospective agency witnesses.
However. when I pointed out to you that a great deal of the information related to
Oversi&ht Board and RTC-related work done by, and which was readily available in, the
office of Assistant General Counsel John Bowman. you withdrew your objection to
discussion of these matters with Mr. Bowman. In addition, at my request, after OIG
completed its interview of Deputy General Counsel Dennis Foreman, you withdrew your
objection to discussion with Mr. Foreman.
My responses to your inquirIes are set forth below following the bulleted headings you
used. Except as otherwise noted, each of the questions you posed under a bulleted
heading is responded to although I have not restated the specific questions in each case.
•
General
Back~round
You have asked for a legal/historical perspective on the responsibilities of the
Department of the Treasury ("Treasury"), as a Cabinet agency, related to matters
involving the Resolution Trust Corporation ("RTC'). That perspective is most accurately
reflected in a review of the broad range of the Department's responsibilities for financial
insti tutions policy.1
'Set, e.g., Offi~ of the Federal Register, National Archives and Records Administration, De United
States Government Manual 1993/94 492·494 (1993) (-the Secretary has primary respoDsibilily for formulating
and recommending domestic: and international flDaftc:ial, economic. aod tax policy _ snd mOlDJliing the public
debt. ••• The Under Secretary for Finance advises and assists the Secretary and Deputy Secretary ". in
domestic, finance, banking and eamomic: matlers. Thc&e responsibilit.ica include tbe development of policies
and guidan~ of Treasury Department ad.ivitics in the areas of monetary affairs, manqement of public: debt
rand] financial mstitutiona policy ~ ..")
2
•
Treasury's Role in Financial Institutions PoHC;X
Treasury has important and pervasive roles in overseeina the financial services
marketplace. We address here only Treasury's role in domestic issues. In addition to
the role of overseer of the financial services marketplace, the Treasury 1w a historic
interest as keeper of the "fIsc," i.e., the Treasury is the entity responsible for raising the
funds used to satisfy various governmental commitments, includflli full faith and credit
obligations. Because the government's financial institutions responsibilities, such as
maintenance of deposit insurance, en!~il substantial commitments of iovemment
resources, Treasury's fiscal responsibilities often are in the background of its financial
institutions work.
In addition, the Se,retary is specifically authorized by statute to provide ieneraI direction
or oversight of two financial institutioD. regulators, the Office of the Comptroller of the
Currency, 12 U.S.C. 1 and 31 U.S.C. 307, and the Office of Thrift Supervision, 12 U.S.C.
1462a(b)(1} and 31 U.S.C. 309. Whatever else that supervisory function authorizes, it
includes the authority to establish general policy for the performance of those bureaus'
functions. 29 OPt Atty. Gen. 555, 562 (1912). The placement of these bureaus in the
Department is a reflection of the Department's longstanding role in fmancial institutions
policy.
Further evidence of general policy responsibility in these areas is provided by numerous
statutory and other assignments for Treasury over the years. Such assignments include,
but are not limited to:
1.
service as the Chairman of the Depository Institutions Deregulation
Committee established under the Depository Institutions Deregulation Act
of 1980, Pub. L 96-221 )("DIDA");
2.
a role in the restructuring of the farm credit fundin& and banking system
through membership on the Farm Credit System Assistance Board (12
U.S.C. 2278a et seq.);
3.
the initial capitalization of the Federal Deposit Insurance Corporation and
issuance of a standby letter of credit for the deposit insurance funds (12
U.S.C. 1824) (in addition to fmancing the statutorily mandated pledge of
the full faith and credit of the United States provided to support the
insurance funds [12 U.S.C. 1825]);
4.
a role in the oversight of the securities markets and various anomalies in
the securities industry through its membership on the Board of Directors of
the Securities Investment Protection Corporation (15 U.S.c. 7Secc);
5.
membership on the Working Group on Financial Markets created by
3
Executive Order in 1987 to review the precipitous October 1987 market
decline. This Working Group has subsequently been used to review other
events which might impact the economy, including the Drexel Burnham
bankruptcy and, recently, the gro\lring use of derivatives by various entities;
and
6.
service as Vke-Chairman of the Task Group on Regulation of Financial
Services (popularly known as the "Bush Deregulation Task Force" named
after the then Vice President who served as the Chairman).
Various statutes also have assigned Treasury responsibility for studies of various
components of the financial services market. For example, the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 (Pub. L. lOl-73)("FIRREA") required a
series of Treasury studies including: (1) a report on Financial Institutions Directors' and
Officers' Liability; (2) a report titled, "Modernizing the Financial System:
Recommendations for Safer, More Competitive Banks," mandated by section 1001; (3)
the May, 1990 Treasury repon titled "The Report of the Secretary ol the Treasury on
Government Sponsored Enterprises," required by section 1404; and (4) a followup report
of the same title dated April 1991, required by FIRREA and the Omnibus Budget
Reconciliation Act of 1990 (Pub. L 101-508), The Federal Deposit Insurance
Corporation Improvement Act of 1991 (Pub. L. l02-242)("FDICIA") required a series of
studies by the Treasury and other agencies including a review of "Risk Based Insurance
Premiums" to be used by the FDIC and the deposit insurance funds and a study of the
need for a "Secondary Market for Small Business Securitized Loans".
Treasury has taken the lead role for the Executive branch in drafting a variety of
legislJ.tive proposals in the fInancial services area including DIDA, the Competitive
Equality Banking Act of 1987 (Pub. L. lOO.261)('·CEBA"), the Farm Credit Act
Amendments of 1985 (Pub. L 99.190, 99·198, 99-205) and 1987 (Pub. 1.. 100-233),
BRREA, FDIC~ the Resolution Trust Corporation Refinancing, Restructuring, and
Irnprm·ement Act of 1991 (Pub. L. 102-233) ("RTCRRIA"), the Resolution Trust
Corporation Completion Act (Pub. L 103·204)("Completion Act"), the Community
Development, Credit Enhancement, and Regulatory Improvement Act of 1994 (currently
under consideration in the Congress), as well as numerous initiatives related to the
regulation of Government Sponsored Enterprises such as the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation, the Student Loan Mortgage
Association (which now is regulated by the Treasury for purposes of capital) and
regulation of the Government Securities market.
E;l,h of these initiatives involved examination of activities or practices which, either
directly or indirectly, affected or could have affected the economy and the functioning of
its various financial markets. In the case of FIR REA, the Department assumed the lead
advocacy role because destruction of the savings and loan industry was determined to
:::lve a potential impact on the financial services industry and the economy as a whole
4
for which a federal response was needed.
Shortly after his inauguration, President Bush asked the Treasury to immediately begin
drafting legislation which would deal with the ~jsis in the savings.and loan industry in
such a way as to protect depositors, dispose of the asseu received by the Federal Savings
and Loan Insurance Corporation ("FSLIC') from insolvent institutions, and ensure that
the crisis would not be repeated in the future. Treasury took the lead in drafting the
legislation which became the Financial Institutions Reform, Recovery and Enforcement
Act of 1989. Although the legislation reflected the views of many agencies, including the
Federal Reserve, the FDIC and the Justice Department, Treasury acted a.s the principal
advocate for the Administration's views durin, the approxinl3.tely seven months of the
legislative process.
•
Treasury's Relationships with the RIC
•
Summan
This longstanding Treasury role in financial institution issues serves as background for
the practice of successive Administrations in looking to the Department for work on
RTC-related issues. It is useful to summarize here the various areas of RTC-related
work for which the Treasury has been responsible. They are discussed in greater detail
below. First, as noted above, Treasury was the principal advocate for FIRREA, the
legislation that created the RTC. Second, the Secretary of the Treasury is the Chairman
of the Oversight Board (later renamed the Thrift Depositor Protection Oversight
Board),2 which is to "oversee and be accountable for the Resolution Trust Corporation."
12 U.S.C. Section 1441a(a){2). The Oversight Board is responsible for reviewing general
pOlicies the RTC adopts, and, in addition, has specific authority to require changes in
~overal1 strategies, policies and goals .... "3 Third, Treasury repeatedly had the lead in
the Bush Administration, and again had the lead in the Clinton Administration, for
seeking from the Congress le&islation to increase funding for the RTC. Founh, section 2
of the Completion Act prohibits the RTC from spending funds that had been
appropriated beyond a certain amount until the Secretary of the Treasury (not the
Chairman of the Oversight Board) certifies that satisfactory pro&ress is being made by
the RTC in management ~eform:' Fifth, Deputy Secretary of the Treasury Roger Altman
was detailed pursuant to the Vacancy Act to the position of alief Executive Officer of
the RTC to address Congress' concerns about RTC operations. (lhose concerns were
~he Completion Ad, section 302(a).
3RTCRRlA, section 305 (U US.e. 1441a(a)(6»), authorizes the Ovmight Board to require
modi.flciltiollS of RTC's stratl:gies. policies and goals, but require! that the Ovcnigbt Board provide
'explanation· of the rcasoD.S for doing so to the House and Sena(e bukiDa committeel.
4The Completion Act, section 2 (U U.s.C. 1441a(i)(4».
5
frustrating enactment of RTC funding.) Fmally, to assist the Secretary of the Treasury as
Chairman of the Oversight Board and to assist the Deputy Secretary as CEO of the
RTC, Treasury staff worked on a variety of RTC·related matters.
•
Discussion
•
Oversight Board
As ena.cted,. FIRREA provided Treasury with many continuing responsibilities in
handling the savings and loan industry crisis, including placing within the Department as
a Treasury bureau a new regulator of federal savings associations (the Office of Thrift
Supervision) 12 U.S.C. 1462a. In addition, the Oversight Board was established to
"oversee and be accountable for the Resolution Trust Corporation" (12 U.S.C. Section
1441a(a)(2», and the Secretary of the Treasury serves ex officio as the Oversight Board's
Chairman (12 U.S.c. 1441a(a)(3)(A)(i»).
Because the Secretary of the Treasury was serving lS the Chairman of the Oversight
Board, the task of starting up the Oversight Board fell to the Department. The task
required, among other things, drafting the Oversight Board's bylaws and operating
procedures. hiring Board employees including a President of the Oversight Board (the
Deputy Secretary of the Treasury temporarily served in that capacity), and generally
establishing a relationship with the RTC (which at that time was being managed by
FDIC) that would permit the Oversight Board to carry out its oversight responsibilities.
These tasks clearly had to be, and were, undertaken by Treasury employees because the
Oversight Board had no employees to start it up.
Again., because the Secretary served
as the Chairman of the Oversight Board, which was
"accountable for the RTC, and because the Secretary cannot personally fulfill each of
the innumerable responsibilities imposed upon him, Treasury employees served in a
support capacity for the Secretary as Chairman and continue to do so.
It
Support for the Secretary in his Oversight Board Chairman role and his innumerable
other roles is authorized by the general authority of the Secretary of the Treasury.
tJnder 31 U.S.C. 325(b)(2), the Secretary may go so far as to delegate one or more of his
duties and powers entirely to another employee of the Department. That statute does
not restrict the powers and duties that can be delegated to those conferred upon the
Secretary in his role as head of the Treasury Department; those powers vested in the
Secretary by virtue of his ex officio responsibilities also may be delegated unless
delegation is specifically restricted:' Certainly if be may delegate an authority entirely,
he is free to use support from Treasury staff in performing a function for which he
retains responsibility.
!Su, ~.g., 12 U.S.C. 1441a(a)(9).
6
In supponing the Secretary's performance of his Oversight Board responsibilities,
Treasury was required to faromarize itself with the policies and practices established by
the RTC in carrying out its duties. In addition to the work of the Oversight Board in
approving various proposals of the RTC, numerous bearings before the relevant
committees in Congress were requited on a semianDual basis, as well as public meetings
of the Oversight Board. Each of these activities demanded the attention of the Secretary
and thus his staff.
•
Legislation
In mid-1990, when the Bush Administration recognized that RTC needed additional
funds to complete cleanup of the "crisis" of the S&L industry, Treasury was again thrust
to the forefront of :the legislative efforts to secure the needed monies. This effort
culminated in the passage of RTCRRIA in September of 1991, which provided additional
funds, and restructured the RTC and its relationship with the Oversiibt Board. As part
of that restructuring. RTCRRIA created the position of Chief Executive Officer.
Treasury later took the lead in identifying and then recommending to the President a
candidate for the position; namely, Albert Casey. In addition, RTCRRIA. section 305,
preserved the Oversight Boardfs authOrity to review and disapprove RTC's procedures
and guidelines. 12 U.S.c. 1441a(a)(6)(C).
The RTCRRIA-restructured relationship between RTC and the Oversight Board
somewhat limited the Board's oversight of the RTC, but it also left to the Oversight
Board the authority to approve (or disapprove) RTC budgets, Le., RTC's expenditure of
appropriated funds. Thus, it was of concern to Treasury that the availability of the funds
provided by RTCRRIA was to expire on Aprill, 1992. RTCRRlA, section 101. As the
expiration approached early in 1992, Treasury, OMB and RTe staff e.Y8mined whether
any options to avoid the expiration were available, but concluded that there were none.
The feasibility of obtaining legislative relief was discussed, but no legislation was drafted
before the end of the Bush Administration.
Treasury once again assumed the role of leaderShip in securing funds to complete the
mission of the RTC in February of 1993. That effort succeeded in December· of 1993
with the passage of the Completion Act
•
Completion Act
Section 2 of the Completion Act imposed an additional responsibility on the Treasury
with respect to RTC. RTC would be unable to spend more than $10 billion (of the
approximately $18 billion made available by the Act) before the date on which the Secretm of the lrea.mz:y certifies to the
Congress that, since the date of enactment of the Resolution Trust
Corporation Completion Act, the Corporation has taken such action as
7
may be necessary to ,omply with the requirements of subsection (w) or
that, as of the date of the certification, the Corporation is continuing to
make adequate progress toward full compliance with such requirements.
(Emphasis added.)
~ute
that the certification is required of the Secretary of the Treasury, and not the
Chairman of the Oversight Board. Subsection (W)6 required of the RTC a series of
management reforms that were similar to a management reform program announced for
the RTC by the Secretary of the Treasury in his role as Chairman of the Oversight
Board in March, 1993. Thus, the Secretary was asked by Congress to make
determinations regarding RTCs conduct, operations and management. Section 2 of
RTCRRIA also calls upon the Secretary of the Treasury, and not the Chairman of the
Oversight Board, to respond to a request from the Congressional banking committees for
a report on the required certification.
•
Altman's Role as CEO of the RTC
There Wa,!, !Substantial Congressional resistance to additional funding for RTC in 1992
and 1993. When Treasury in 1993 confronted the problem, it determined that a
necessary part of addressing Congress' concerns was reform of RTC operations. Such
reform could not be achieved from a distance; it required more active involvement in the
RTC than previously had been the case for Treasury. 7
On March 12, 1993, Treasury recommended that the President detail Mr. Altman to the
RTC CEO position so that "the Administration's efforts on RTC funding legislation will
not be impeded:" In a memorandum dated March 15, 1993, the President directed Mr.
Altman to "perform the duties of the office of Chief Executive Officer, Resolution Trust
Corporation, effective March 16, 1993," pursuant to 5 U.S.C. 3347. That statute,
commonly known as the Vacancy Act, provides that when the head of an executive
agency dies, resigns, or is sick or absent, the President may direct another executive
officer, who has been appointed by the President with the advice and consent of the
Senate, to perform the duties of the vacant office until a successor is appointed.
You have asked us to describe the terms of Mr. Altman's "appointment.'" By virtue of
the Vacancy Act detail, Mr. Altman was to "perform the duties of the office" of Chief
~RT<':RRIA,
section 3.
Trcas ury'S view that Congress linked funding for the RTC with man.age~t reforms wa.s cOrUllmcd
by the Completion Aa's explicit linkage, discussed above.
7
8~(e:norandum Crom Uoyd Bcntsell to the President, dated March 12, 1993 (attached).
~h:
Vacancy Act uses the term •detail, • rather than "appointment.' S U.S.C. 3347.
8
EAecutive Officer (CEO) of the RTC. 5 U.S.C. 3345, 3347. In legal effect, although
temporarily, Mr. Altman was the CEO. and his duties and powers were defined by the
statutes creating the CEO position. That is, he had "all the powers of the Corporation
...... 12 U.S.C. 1441a(b)(9)(C) and (0). In addition, the law regarding the powers of a
person detailed pursuant to section 3347 is well established and has been unchallenged
in this century. See Ryan v. United States. 136 U.S. 70 (1890) (in the absence of the
Secretary of WaI, the authority with which he was invested could be exercised by the
official who became the Acting Secretary); 20 Op.Atty.Gen. 483 (1892) (an Executive
Order authorizing the performance of the duties of a vacant office by another officer
conveys all the duties pertaining to the office).
However, as noted above, Mr. Altman's tenure was temporary. Title S U.S. Code,
section 3348, limits details under the Vacancy Act to 120 days, except that if a first or
second nomination for the position is submitted to the Senate before the expiration of
120 days, the detailee may continue to serve 'Until 120 days after the date on which
either the Sen3te rejects the nomination or the nomination is withdrawn." 5 U.S.c.
3348(a)(1).
Accordingly, Mr. Altman's detail was originally due to expire OD July 14, 1993. However,
Stanley Tate's nomination was submitted to the Senate during the first 120 days of Mr.
Altman's detail, thus invoking the extension of the Vacancy Act's period under section
3348. Mr. Tate announced on November 30, 1993, that he was withdrawing his name
from consideration. The Office of Legal Counsel at the Department of Justice advised
Treasury that the date of Mr. Tate's withdrawal should be c:onsidered to be November
30, and that, pursuant to section 3348, Mr. Altman could continue to serve in his detail
as RTC CEO for 120 days subsequent to Mr. Tate's withdrawal, that is until the end of
~iarch 30, 1994.
You asked whether the Office of Legal Counsel ("OLe) at the Justice Department gave
advice regarding Mr. Altman's appointment or duties. The OLe advises that Assistant
General Counsel John Bowman consulted with them in late February 1993 as to whether
the Vacancy Act was available to detail a Presidential appointee into the CEO position.
(Information had reached the Department that then-CEO Albert Casey was advising
Congress that no lawful arrangement for continu1n& RTC leadership could be made if
Mr. Casey resi&ned. Treasury consulted with OLC to determine if that was a conect
view of the law.) OLe advised orally that the Vacancy Act would authorize detailing a
Presidential appointee to the CEO position.
OLC again was consulted in July of 1993 regarding the application of the Vacancy Act to
Mr. Altman's detail. They provided advice reprding possible outcomes in various
situations that might occur if Mr. Altman's detail ended by law before the President sent
a nomination to the Senate. However, in the event, Stanley Tate was nominated for the
CEO position before Mr. Altman's detail expired.
9
You also asked whether Treasury's Office of General Counsel gave Mr. Altman any
advice about performing his RTC responsibilities. Before Mr. Altman's detail began,
Treasury counsel did a preliminary review of the holdings reflected on Mr. Altman's
public financial disclosure statement to determine whether they posed any conflicts that
would be so significant that ·he would be unable to perform the CEO's duties. We
advised that they did not. RTC ethics officials then conducted a separate review with a
more detailed appreciation of the CEO's duties and the RTCs special ethics
requirements, and they reached the same conclusion.
~either
Mr. Bowman nor I provided advice to Mr. Altman regarding usc of Treasury
staff. You have asked us not to discuss your inquiry with Ms. Hanson, and we have not
done so. Accordingly, I do not know what, if any, advice on that issue she may have
provided. However, Treasury staff. including Ms. Hanson and Office of General Counsel
lawyers, who worked from time to time on RTC issues frequently reminded each other
that they had no decisionmaking authority on behalf of the RTC; they were merely
advisers to Mr. Altman. It is important to recognize that Mr. Altman not only served as
CEO and continued to perform the duties of Deputy Secretary of the Treasury, but that.
in addition, he took on a number of White House assignments such as coordinating the
Administration's efforts to achieve a budget deficit reduction legislative package and a
significant part in trade negotiations with Japan. Clearly, he could not, and in fact he
did not, devote full-time to the CEO responsibilities. In that context, it would have been
anomalous for him not to turn to the Treasury legal. domestic finance, legislative affairs
and public affairs advisers to whom he turned every day for advice just because an issue
focussed more immediately on the RTC's interests than on Treasury's. As noted below,
such use of Treasury staff was authorized. to This was all the more appropriate because
the RTC at the time lacked a permanent CEO and G~neral Counsel.
Similarly, we know of no direction that Secretary Bentsen or the White House may have
given to Mr. Altman regarding his performance of CEO duties because we have not
inquired. Of course. as Chairman of the Oversight Board. the Secretary participated in
performance of the Oversight Board's functions, including those prescribed at 12 U.S.C.
1441a(a)(6).
•
Bentsen's Role at RTC
The roles of Secretaries of the Treasury with respect to the RTC, including Secretary
Bentsen, are restricted to the normal economic policy and financial institutions policy
responsibilities of the Secretary of the Treasury and the responsibilities of the Chair of
the Thrift Depositor Protection Oversight Board. The duties assi&ned to the Oversight
Board included, among other things:
l~See, discussioll below under General Authority for Tre3sIlQ' Employees to Serve at the RiC
l:~~k ,"'C
RTC \hctcrs.
()f
10
(A) To develop and establish overall strate&ies, policies, and goals for the RTCs
activities ... (B) To approve prior to implementation periodic iinancin& requests
developed by the [RTC] ... (D) To review the overall performance of the [RTC1
on a periodic basis, including its work. management activities, and internal
controls, and the performance of the [RTC] relative to approved budget
plans. . .. (FIRREA. section 501).
The CO'-1l5 of the Oversight Board's activities related to the fact that RTC was spending
taxpayer monies, a role that Treasury has assumed in numerous other situations, as
discussed above.
The only statute that has the effect of establishing a limitation on the authority of the
Oversight Board is at 12 U.S.C. 1441a(a)(8)(A), which provided:
The (RTC] shall have the authority, without any prior review, approval, or
disapproval by the Oversight Board, to make such determinations and take such
actions as it deems appropriate with respect to case ..specif1c matters (i) involving
individual case resolutions, (li) asset llquidatiODSi or (iii) day·to-day operations of
the [RTC]. The preceding sentence in no way limits the authority of the
Oversight Board to provide general policies and procedures.
RTCRRIA reduced the Oversight Board's role in the operations of the aTC. but it did
not limit the requirement that the RTC seek the approval of the Oversight Board for
budgets and the expenditures of taxpayer funds.
In addition, as Secretary Bentsen testified on March 8, 1994 before a subcommittee of
the House Appropriations Committee. he has adhered scrupulously to the Coniressional
intent described in the Conference Report that accompanied FIRREA.
The Oversight Board will review and have overall responsibility for the
RTC's activities. The Oversi&ht Board will not, however, be involved in or
responsible for case specific matters involvinl individual institutions,
specific asset dispositions or ienerally the day·to-day operations of the
RTC. ll
As is evident from these restrictions, the Secretary of the Treasury has no
decisionmaldng role in case-specific enforcement matters pendiD& at the RTC.
•
General Authority for Treasury Employees to Serve at lhe RTC or Work on RIC
Matters
ll H.R.
Rep. No. 222, 1015t Cong., 1st Scss., at 410 (1989),
11
\\'hen an agency makes an administrative determination that work is necessary and
appropriate to advance its mission, it is authorized to spend the money appropriated for
the support of its mission for the ordinary and necessary expenses of performing that
work, including the salaries of the employees who perform it. Oearly, the Treasury
Department had for at least five years administratively determined that providing for
completing the resolution of the savings and loan industry crisis was part of Treasury's
mission. Thus, Treasury repeatedly worked on securing legislation to provide for that
resolution by creating and later seeking increased funding for the RTC. As it assumed
that task again early in 1993, Treasury was receiving information from Congress that
indicated that reviving the stalled efforts to achieve sufficient funding for resolution
required more detailed attention to RTC's management. See, Appendix A. Treasury's
responses to that need included the recommendation that the President detail Mr.
Altman to the CEO position and the use of Treasury staff to support Mr. Altman's
performance of those duties. In legal effect, Treasury staff were performing Treasury
work. No specific statutory authority beyond Treasury's appropriations was required.
In addition, as employees of an executive department, Treasury employees are expressly
authorized to serve at the RTC or work on RTC matters by 12 U.S.c. 1441a(b)(9)(B)(ii),
if Treasury agrees to such service. This statute authorizes RTC to '-Utilize the personnel
of any ... executive department ...." It makes no distinction between service at the RTC,
e.~., servin~ in a formal detail, and working on RTC matters, i.e., performing duties in
support of RTC functions while continuing to perform the duties of a Treasury position.
This authority exists without regard to whether Mr. Altman at the time of such service
was under a Vacancy Act detail to the CEO position at the RTC. However, while Mr.
Altman served as CEO, he was. in that capacity, authorized to request that Treasury
make its staff available, and, at the same time, in his continuing position as Deputy
Secretary of the Treasury, he was authorized to "agree" on behalf of the Treasury to
Treasury staff serving at the RTC or working on RTC matters. Treasury Order No. 101·
05 (attached).'2
The language of section 1441a(b)(9)(B)(ii) imposes no limitations on the ways in which
employees of executive depanments may be "utilized." We would not suggest that its
authority could be used to circumvent restrictions otherwise applicable to the Secretary
of the Treasury in his role as Oversight Board Chairman, see, e.g., 12 U.S.C.
1441a(a)(8)(A), and there has been no suggestion that Secretary Bentsen in any way
directed the services of Treasury employees assisting the RTC in its opera.tions. Further,
we are aware of no basis for such a suggestion. To the contrary, Secretary Bentsen has
obsen..ed Congress' wishes that, as Oversiiht Board Chairman, he not become involved
IlIt is clear that a Presidential appointee may perform the duties of a position to which he has been
appointed by the President at the same time as he performs those oC a position to whIch he is detailed under
the authority of the Vacancy Act; a statute merely prohibits receiving additioDal pay "for performing the
duties of a vacant office as authorized by [S U.S.C.] 334S·3~7 ... : S U.S.C. 5535(a).
l2
in "case specific matters involving individual institutions, specific asset dispositions or
generally the day·to-day operations of the RTC."ll
You asked whether there were any limitations on, or procedures to be followed in
exercising the authority for Treasury employees to work on RTC matters. The statute
dOl!s not impose any limitatiun or require any procedures to be followed. Although the
statute refers to reimbursement for the services provided by another agency, we do not
read that as a limitation on the authority to provide such services."
Treasury became aware in January of 1994 of the procedures RTC followed in referring
potential criminal matters for determination as to whether to prosecute. When the CEO
received a request for all documents regarding the failure of Madison Guuanty Savings
& Loan from Congressman Leach dated December 9, 1993 (attached), the CEO made
clear that he wanted to be as responsive as possible. IS We understand that RTC aave
Leach's staff access to Madison documents over a period of time and informed them as
to documents that could not be released because of RTC policy. This and other
Congressional requests for information about Madison16 led to discussions among the
CEO, RTC officials and Treasury officials who were assisting the CEO as to what
procedures RTC followed in handling criminal referrals and information about such
referrals. In those discussions, the CEO and Trusury officials assistf:n& bim were
informally advised by RTC officials that RTC's procedures called for criminal referrals to
lJH.R. Rep. No. 222, lOlst Cong., 1st Sess .. at 410 (1989).
1~12 U.S.C. 1441a(a)(9)(B)(U) provides: "W"llh the apumcDt of aayeacutive department or
agency, the Corporation may utilize the personnel of any such cx=cutivc depart:mc:ut or aacney on a
reimbursable basis to cover actual and reasonable expenses. Treuury hu DOt soqht reimbursement from
the RTC for the work done on RTC matters. Even if spec:i.6t authority is 1UlCCSSU)' for Treasury employees
to support the CEO, suth autbority for Treasury staff to do such work is clcu from the $tatute, and we do
aot believe tbat reimbursement is requited.
The Comptroller GcneIal has recopizcd authority to detail. employee from 0= agency to
another without reqWtiDg reimbursement when the detail iIlYotvea a laattcr wbich Is related to the detailing
aacncy's appropriatioa ud which would aid the detaillq "Dey ill accompJiablDa a purpose for wh1cb iu
appropriations are provided. 64 Comp. Ocn. 370. 380-81(1985): 65 Comp. OeD.. 635, 637 (1986). In doina
so, be concluded that another statute requiring reimbuncmcnt for work doa.e by au apcy £or aDOthcr, 31
US.C. 1535 (the so-called IEtoaomy Act"), did not apply because the work doae wu ill the dctaiJjaa
ilgency's interest. That conclusion is all the more appropriate for Treuury &tift' workiDg 011 RTe matters
because the Treasury employeea were not detailed to the RTC. They coadllllftf to perform duties ill support
of those parts of Treasury's missioDi which had nolhiag to do with the RTe.
I
l'l..ctter frum CEO Roger Altman to Congressman lamca A. Leach, dated Dece.mber 22. 1993
(attached).
"Stt, I.g., Letter from Bob Dole, AlConse D'Amato, Ian Meyera.lamcs A. Lea~ Bill Clinger,
Larry Pressler, Bob Michel and Hamilton Fish, Jr. to Roger Altman dated lanuuy 10, 1994 (attached).
13
be made in the field directly to the prosecuting office. At about the same time, in
January of 1994, as the CEO and the Department continued to receive Congressional
inquiries concerning work on Madison Guaranty Savings and Loan, we inquired of RTC .
as to the existence of any written policies on criminal referrals. In response, we obtained
a copy of RTCs policy. We do not know that any Treasury officials working on RTC
matters, including the CEO, were ever briefed on the policies reflected in that document.
•
Role of Other TreasuIj' Employees at RTC
You have inquired as to whether any Treasury officials working on RTC matters had an
"official status" at the RTC. We are unaware of any such status for anyone other than
Mr. Altman, who, as discussed earlier, was detailed to the CEO position pursuant to the
Vacancy Act. Moreover, it is our general understanding that Treasury officials working
on RTC matters were careful to point out that they did not have such status; that they
were merely advisors to Mr. Altman.
Rather, as noted earlier, at Mr. Altman's request as CEO and as the Deputy Secretary of
the Treasury, various Treasury officials assisted Mr. Alunan in performing his CEO
duties with the overall objective of ensuring that Congress had sufficient confidence in
RTCs operations to provide required funding {or resolution of failed thrift institutions.
Appendix A provides a statement of some of the activities engaged in by Treasury
officials to assist the CEO in addressing Congressional concerns with RTC operations. It
also provides substantial evidence of the pervasiveness of Congressional concerns which
had frustrated additional RTC funding, particularly in the banking committees.
"The question as to whether there were RTC employees who normally would have filled
the roles filled by Treasury employees is difficult. Certainly the judgment made at the
time was that RTC was not accomplishing one of the critical requirements for it to
complete its work, i.e., obtaining funding. The Department's understanding of the
information it was receiving from the Congress early in 1993 was that it would take
TreasuCi actively working on RTC management reforms to give Congress sufficient
confidence to make additional funding available for the RTC. With the benefit of
hindsight, in light of the Congressional contacts detailed in Appendix A, and the
Completion Act's emphasis on management reform and its requirement that the
Secretary of the Treasury provide assurances with respect to RTC management reform
efforts, Treasury's understanding must be seen as correct.
\Ve are not aware of direct contacts between Treasury and the White House over the
past three to four years relatin& to "RTC enforcement actions," by which we presume you
mean criminal referrals, other than those that occurred in connection with the Madison
matter.
Trc:a.sury routinely furnishes to the White House public information about arrests, asset
seizures and convictions that result from investigations conducted by Treasury law
14
enforcement bureaus (ATF, Customs, IRS amI Secret Service). In addition, on at least
one recent occasion, nonpublic information about a law enforcement matter with
national security implications was provided to the White House.
•
Treasury Policy on Disclosure
You have asked fur any written guidance applicable to Treasury employees with regard
to participating in and disclosing information about enforcement cases or criminal
matter~ being referred to the Department of Justice. The June 22, 1994 requests of the
Senate's Committee on Banking, Housing and Urban Affairs seek information about
II ...
any written poli,ies or d~scriptioDS of policies, in effect now or to
your
knowledge previously, concernin& communications between the Department
of the Treasury and other executive branch or independent agencies,
including the White House and the Resolution Trust Corporation."
A ,apy of the Committee's request to Secretary Bentsen is attached. On July 11, 1994,
the Department dispatched a tasker seeking such information from bureaus that might
have such policies. We await responses to that tasker. To the extent that we receive
information that is responsive to your request and is not subject to restrictions on
disclosure, we will provide it to you.
You also have inquired as to whether,- if there is no such written policy, there is a policy
or practice that is made known to employees engaged in cases that are referred to the
Department of Justice for consideration of criminal prosecution. If Treasury bureaus'
responses to the taskers produce no written policies, we will inquire as to practices and
inform you of any about which we learn.
•
Polkv on Contacts with the White
Hous~
Attached is a copy of a memorandum that Secretary Bentsen issued on March , 1994,
which established a procedure for review of White House c:ontacts. We do not believe
there was any written guidance at the Treasury regarding contacts with the White House
either generally or on pending enforcement cases before that memorandum was issued.
cc: Jim Cottos (without attachments and Appendix A and its attachments)
DATE;
3Y ORDER OF THE
iECRET.o\RY OF THE TREASL"RY
May 11, 1994
TREASVRY ORDER
101~
Sunset Review: May 11, 1999
SUB!ECI: Reportmg Relationships aDd Supervision of Officials, Offi~ and Bureaus, Delegation of
Cenain Authority, and Order of Succession in the Depanmem of the Trwury
By vittue of the authority Vl$ted in the Secretary of the Tr~ury, including the authority v_ted by 31
U.S.C. 321(b), 31 U.S.C. 301(d), as amended, dated February 12, 1994, and Executive Order
11&12, daud Dec=Jber 10, 1974, it is ordered that:
1. The Deputy Secretary shall repon directly
2. The Clief of Staff shall repon directly
Dir=cr, Secretary's S=edwin, Office.
tg
tg
the Secretary.
the Se.crew-y and shall exercise supervision over the
3. 'The Executive Secrcury aDd Senior Adviser to the Secretary shall report directly &0 the Secretary
and shall exercise supervision over the functions of the Executive Seaetariat~ the Deputy Executive
Seaewy (Public Liaison); m4, for purposes of administrative aud managerial control, over the
Sp"ial Assistant to the Staetary (NatioDal Security). The Special AssistaDt to me Seaecary
(National Sec:urity) slWl report to the Secretary and the Deputy Secretary.
The following officials shall report through the Deputy Secretary tD the Seaerary aDd dWl
exercise supervision OVU those officers and organizational entiti~ set forth on the wcned organizational chirt:
4.
Under Secrewy (International Affair~)
UDder Sec::ewy (Oomcsti, Finance)
Under SecrCW'y (EnforcemeDt)
Gcue:al CoUDSc1
Assistazu Sec:tetary (UoDOmic Policy)
Assistant Seerewy <LecWative Affairs)
AssistaDt Sectary (Mmaaement)
As.sislaDt SlCreQry (Public Affairs)
Assistant Sccrccary (Tax PoliCY)
wpec:&or General
Commissioner of Internal Revenue
S. The AaistaDt Secrewy (Management) serves as the Department" Chief FinaDA;ial Officer
purs\W1t to dle Chief Financial Officers Act of 1990, Public Law 101 ..576.
6. The Deputy Secretary is authorized, in that official"s own capacity aDd tIw official"s own title, to
perform any fw1ctioDS the Seaewy is authorized to perform and shall be responsible for referring to
the Secretary any matter on which action would appropriately be taken by the Secretary.
THE.DEPARTMENT OF THE TREASURY
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MAY 1 1 1994
.!/ Assistant Soootary (Managemont) is Ihe Gljet Financial Ollicef (CFO).
D"te
IJ'f71/
THE SECRETARY OF THE TREASURY
WASI-ilNG1(jN
MEMORANOUM FOR THE PRESIDENT
Bents~~
FROM:
Lloyd
SUBJEC'l' :
Chief Executive Officer (lIcto") for the Resolution
Trust Corporation (IIRTC")
AC~ION
~HT;
PORCING
Albert v. Casey, the CEO of the RTC, has indicated his desire to
return promptly to the private sector. As you previously
authorized, I intend to accept Mr. Casey's resignation on your
behalf. I expect the effective date of his resignation will be
March 15, 1993.
An interim CEO of the RTC should be ready to assume
responsibility at the time I accept Mr. casey's resignation.
When we find a permanent candidate for the position, all
authority can then be redelegated to him or her.
The temporary CEO must be a PresidentiAl appointee confirmed by
the Senate. However, Presidential appointees to indQpendent
agencies, such as the Federal Reserve Boara, are not eligible for
this type of appointment.
I believe that Oeputy Secretary Altman is the most logical choice
for the interim CEO. That way, the Administration's efforts on
RTC fundlnq leqislation will not be impeded.
RECOMHENt)ATXON~
That you sign an appropriate executive order, in substantially
the attached form, making the Deputy Secretary ot the Dep~rtment
of the Treasury, Roger C. Altman, the temporary CEO of the RTC,
pursuant to 5 U.S.C. 3347. The order would oe effective the
earlier of March 13, 1993, or on Mr. Casey's resignation.
Agree
Oiaagrea __________
E)Oec~tiv~
Order
of March _____ , 1993
Cirec~iQn to the Deputy Secretary of the Department of the
Treasury to perform. temporarily, the ~uti~ at Chief Executive
Officer of the Resolution Trust corporation.
Sy the authority vasted in me as president ~y the COnstitution
and the laws of the Unitea States, includinq tha Vacancy Act
(5 O.S.C. 3345 et seq.), it is hareby o~arad .. follow.:
Section 1.
In the event of a vacancy in the
Q~fie.
af the Chief
Executive Officer at the Resolution Trust Corporation, or during
the a=sence or disability of sucn Chief Executive Ofticar, the
Deputy Secretary of the
Departmen~
or tbe
~raasury
shall per!orm
the auties of the office ot Chief Exacutiva Officer ot the
Resolution trust corpcration, Subject to tba limitations at
, U.S.C. 3348.
Sec~ion 2.
The President may at any tim., pursuant to law but
without reqara to the ~creqoinq provisions of this Orear, direct
that .n otf1cer specified by the Prasidant p~or.m the 4uties ot
the Chief Executive Officer of the R•• olution ~rust Corporation.
THE WHITE KOOSE
March
, 199J
~13 -1 ) ~ 17/
to:
---------------------
room:
---
date:
Department
of the Treasury
J / 1 2/93 Executive Secretary
---
ThlS 15 a ~e~o ~o the President ~egardlng
Roger C. Alt~3~ temporarily r~p!acing
Ai Casey
for the
3S
CEO for RTC.
Pres~dEnt
I would like
to get this as soon as
possible.
If you have !ny questions please call nee
cc:
cob
!)':Uf.US
Edward S. Knight
room 3408
phone 622-0027
u.s. HOUSe OF REPIiESeNTATIV!S
LI"" AI""'"
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WA.MIMCI1ON. 00 10. , .....,
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The Koftoraal. lOfer c. Altaan
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% requ••e Ieee.. to all docuaanta relltad to Mldi.on held It RTe
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to you: Qoo,.ratLon.
RTC
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COMWmu 0IIII.--. MOUIWG. ANI
"RlMAlMIM
WAaMI...,.. DC 201'0.1071
January 10.1814
I
"";
•
~,
Mr. Repr A\tm&Z1
Actin( Chief Eecutive Officer
Reloludcm Trult CorporatiGn
801 17th Street N.W.
Waahinst=, D.C. 20434
..,
GfnQa"~'~~~'tt:~:..\. r:,u.~ :~~. ~,
O.ar Mr. Altman:
Enclc.ed pleue tind a copy of • letter we IIDt todq to Attorney General
Reno. We would appreciate it if you wou14 =aid.. the I'Iq118It we lA.de
th.rein with N.pect to our CDDCII'Il that the ""niDI of the ltatute of
limitation. may pr., 8Ilt the ftnal rtlOlutloD of aU Il1eptloQa raJ.tina to
MadisoD Guaranty aaviDal ADd Lo-.
TbaDk you.
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or l"ICIIi'9V of & fai1ecl WtituiiaQ. 'niua, the abWt7 of the R'ro to take
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at HaitatiOIY fer
mc,;n" aotiODI iavo1Wil bU\k trawl illO ,..n frDIIl tb datil at th. ocewnDce
of th. crimi Del acti~t:J.
In cri8r ta ftIOlve UJ ad &l1 ~ I'IfIfdiDr Mldh.cz azad
Wbitawater, ". \IrP 1W &Qd tba ITO to . . . YOl.ar, . . . . . with all
nlM'ut pa:tieI, iDdadiDI the PreIi_t IIIIl Mn. CUD_ till MeDoqala, David
Hale, Jim au, TDcbr. s.da Ward. 1M the_ LAw
to ton the l'IlDninr at
the ltatllill elllmitatioal -Ia cdUr word&, tID IMk ibIir .". . . to vobmtarily
waive tbM. d_.... TbIM . . . . . wmallaw time 6r •
iDdepeDdmt UmRipt:Iaa aU P'"Ii' tM arcIIrIr opendIfoD oIb lep1 aDd
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. , . . . to 1111 tIw Ita*,* of UmitatiaDI as & PN Jldaral
PartAermon
it will NaIIUl"I tba ~ pubUa tba& .,... impS'''' m., WI'ODIdaiDr
will &IWftr tb. . all....... ,. tbIIr 1Mr1ta.
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Exhibit 23
July 22, 1994, RTC Memorandum on
Legal questions relating to the OIG
•
•
InquIry
r~usr CO~PO~ArJON
RESOLUrJON
ReM.vinl The Crisis
RaIOIinl The Confidence
TO:
Patricia M. Black
Counsel to the Inspector General
FROM:
Ellen B. Kulka
General Counsel
Resolution Trust Corporation
DATE:
July 22, 1994
SUBJECT:
Legal Questions Relating to Ole Inquiry
e\~f~----
This mem~randum responds to your memorandum dated July 15, 1994
requesting "background information and legal opinions" with respect
the involvement of Roger C. Altman as interim Chief Executive
Officer (CEO) of the Resolution Trust Corporation (RTC) and other
officials and employees of the Department of the Treasury in the
operation of the RTC You have indicated that this information has
been requested by the Office of Government Ethics in connection with
an inquiry into communications between Treasury and RTC employees
and White House staff concerning Madison Guaranty Savings and Loan
and related matters.
Most of the information you have requested relates to events
which predate my becoming General Counsel of the RTC. As you know,
my predecessors as General Counsel and Acting General Counsel are
no longer with the RTC (with the exception of James Barker who
served briefly as Acting General Counsel for several weeks in early
January, 1994). Moreover, we believe that much of the information
and legal analysis you seek could more appropriately and readily be
supplied by the Department of Treasury, and you have indicated that
a similar inquiry has in fact been addressed to Kenneth R.
Schmalzbach,
Assistant
General
Counsel
for
Administration,
Department of Treasury.
Nevertheless, we have attempted to answer your questions as
accurately and completely as possible, based on the information
available to us.
I.
Mr. Altman's Role at the RTC.
(l)
Roger C. Altman, Deputy Secretary of the Treasury,
was appointed as interim Chief Executive Officer of the RTC pursuant
to 5 U.S.C. Section 3347, which permits the President to direct an
officer of an Executive Department whose appointment is vested in
the President, by and with the advice and consent of the Senate, to
aor
17ft! Street. N.W.
~. D.C. 20434
perform the duties of a vacant office.
(~)
The term of such an appointme~t is specified by 5
U.S.C. Sect~on 3348 (120 days, except that ~f a first or second
nomination to fill the vacancy has been submitted to the Senate the
position can be filled until the Senate confirms the nominati~n or
until 120 days after the date on which either the Senate rejects the
nomination or the nomination is withdrawn) .
(3) We are not aware of any legal advice rendered by the
Office of Legal Counsel (Department of Justice) with regard to the
appointment or the duties of the CEO.
(4)
While the RTC Office of General Counsel gave Mr.
Altman legal advice from time to time about specific matters related
to the operations and activities of the RTC, we are not aware that
any legal advice was given concerning the use of Treasury staff.
II. General Authority for Treasury Employees to Serve at
or Work on RTC Matters.
B~~
(1) As indicated above, RTC attorneys apparently did not
provide advice to the interim CEO concerning the use of Treasury
staff on RTC matters or the legal authority for Treasury employees
to serve at the RTC or work on RTC matters. We are aware, however,
of certain statutory provisions pertaining to the RTC Which relate
to such matters. Section 2LA of the Federal Home Loan Bank Act (12
U.S.C. 1441a) provides that, with the agreement of any executive
department or agency, the RTC may utilize the personnel of any such
department or agency on a reimbursable basis (2lA(b) (8) (B) (ii».
Furthermore, the CEO may delegate such authority as he deems
appropriate to persons designated by the CEO who provide services
for the corporation (2LA(b) (8) (D». In addition, the Secretary of
the Treasury serves as Chairman of the Thrift Depositor Protection
Oversight Board, which has certain oversight duties and powers under
Section 2LA(a). The Board is authorized to utilize the information,
services, staff, and facilities of any executive department, on a
reimbursable or other basis (2LA(a)(S)(F).
(2) We are not aware of any limitations on the authority
of the CEO to utilize persons from other aqencies or departments
other than thoae expressed in Section 2lA.
CJ)
We are not aware of the nature or extent of any
tormal or informal procedures, agreements or delegations of
authority, which were implemented with respect to the involvement
ot Treasury employees in RTC matters, all of which would have been
within the jurisdiction of the Department of Treasury and the CEO
ot the RTC to determine.
III.
Role of Other Treasury Employees at RTC.
(1) We are unaware of any official status at the RTC of
any Treasury employees who may have provided support to Mr. Altman
2
with regard to his RTC responsibilities. It is our understanding
that various Treasury employees served in advisory capacities and
provided liaison with those officials and employees assiqned to the
RTC who had the authority and responsibility to carry out the
functions ot the Corporation under authority delegated by the CEO.
When I arrived at the RTC in January, 1994, and for a briet period
thereatter, Jean Hanson and John Bowman were performing advisory and
liaison functions with respect to the RTC Otfice of the General
Counsel. We have no knowledqe of the pr~cise roles of the other
individuals named in your memorandum.
(2) We are not aware that any Treasury employees actually
tilled roles that normally would have bean performed by RTe-assiqned
employees. A8 stated above, no Treasury employee other than Mr.
Altman occupied any official position at the RTC. With respect to
the Legal Division, wa understand that those Treasury employeea who
were performinq advisory and liaison tunctions worked with tha
actinq General Counsel and others in the RTC Leqal Oivision who ware
carrying out their responsibilities as FDIC employees assiqned to
the RTC. However, it is also our understandinq that, due to Mr.
Altman's position as interim CEO and his other responsibilities as
Oaputy Secretary of Treasury, ha frequently utilized Treasury staff
to maintain the flow of information trom him to reqular RTC staff
and from RTC statt to him.
As a re.ult, I am advised that in
carta in circumstances it was not always apparent Whether authority'
had actually bean delegated to Treasury employe.. to make decisions
or whether these employees ware marely carryinq out the CEO's
ct.ecisions.
IV.
White House contacts on Other ETC Matters.
With respect to direct contacts between the RTe and the White
Housa involving PLS enforcement actions (other than actions
involvinq Madison Guaranty), the RTC responds trom time to time to
inquiries forwarded by the White House concerning the status of
pending PLS litigation.
(The RTC raceives similar inquiries
forwarded by members ot Congress.) Responses are typically sent by
the RTe's Director 0: the Ottice ot Governmental Relations directly
to the individuals makinq the inquiries, and the Whi te House
raceive. copies at the re.ponsa.. In addition, the RTC Inspector
General rautinely receive. intormation copies ot the•• re.pons •••
We are attaching copies ot eiqht example. ot such correspondence
ct.urinq 1913 and 1994. Correspondence reqardinq PLS mattars trom
earlier year. was not filed separately tram other correspondence,
but it you would like to receiva copies ot such earliar
correspondence, w. could undertake a search ot RTe file. and provide
copies to you.
W. have no knowledqe ot any other contacts between the RTe and
the Whi ta House over the past 3 to 4 years reqarding RTC PLS
enforcement actions.
Those parsons previously serving as General
Counselor actinq General Counsel and/or those parsons previously
servinq as CEO , Executive Director, or Senior Vice President ot the
RTC (none ot whom are currently at the RTC), prior to the arrival
ot John E. Ryan as Deputy CEO of the RTC on January 4, 1994 and
3
prior to my a~rival on January 17, 1994, may be able to provide such
information.
v.
BTC Pglicy on pisclgsure,
(1) Attached are copies of the policies and procedures
currently in place at tha RTC partaininq to disclosure of
confidential
information,
includinq
information about PLS
enforcement cas.. and criminal matters referred to the Department
of Justice.
For your convenience, we have also provided an
inventory of the attachments.
(2) All parsons workinq on PLS matters at the RTC are
expected to ba familiar with all directive. and policies of the RTC
dealinq with the disclosure of such information.
(3)
Wa have
employees who may have
Official capacity as tha
of tha RTC policies with
VI.
no knowledqa of whether those Treasury
provided support to Mr. Al tman in his
RTC CEO ware aware of or ware mada aware
respect to disclosure of information.
Pglicy on Contacts with the White Hguse.
Other than the polici •• and procadures referred to above,
we are not aware of any written quidance at the RTC raqarc:linq
contacts with the White House about pendinq PLS enforcement ca ••••
It you nead additional information about any of tha matters
discussed aDove, plaasa lat m. know.
4
Exhibit 52
(Appears in base report following Exhibit 23)
List of selected newspaper articles
relating to Madison Guaranty S&L.
Selected Newspaper Articles
1. Schmidt, U.S. Is Asked to Probe Failed Arkansas StU; RTC Questions Thrift's Mid-80's
Check Flow, The Washington Post, October 31, 1993, AI.
2. Isikoff, Clinrons' Former Real Estate Firm Probed; Federal Inquiries Focus on FiTUlllCial
Activities of Other Arkansans, The Washington Post, November 2, 1993, AI.
3. Gerth, Chief of House Panel Ends Inquiry on Arkansas StU, The New York Times,
Section 1, Page 11, Column 5.
4. Gerth, Head of Failing S&L Helped Clinton Pay a $50,000 Personal Debt in 1985, The
New York Times, December 15, 1993, Section B, Page 8, Column 1.
5. Schmidt, Businessman Denies Giving a Donation
Washington Post, December 16, 1993, A6.
at
'85 Clinton Fund-Raiser, The
6. Murray, Clinton stalls on records, Leach charges; Aides say preparation willtalee weeks,
The Washington Times, January 4, 1994, Pan A, Pg. AI.
7. Schmidt, Arkansas Probe Sensitive From Stan; Investigation of Collapsed S&L Affected by
Links with the Clintons, The Washington Post, January 5, 1994, AI.
8. Moss, 7 Democrats join the callfor Whitewater counsel, The Washington Times, January 12,
1994, AI.
9.
Engelberg, The Whitewater Case:
Finding lhe Connections, The New York Times,
January 16, 1994, Section 1, Page 20, Column 1.
10. Schmidt, With Political Connections, Arkansas StU Lived and Died, The Washington Post,
Al.
II. Bacon, FDIC Nominee Vows Regulatory Relief, Repels GOP Pressure Over Madison S&L,
The Wall Street Journal, February 2, 1994, A6.
12. Schmidt, Hill Democrats Promise Hearings on Thrifts, The Washington Post, February 2,
1994, A6.
13. Rodriguez, Gonzalez flip-flops on Whitewater hearings, The Washington Times,
February 2, 1994, AI.
14. Scally, Documents raise new Whitewater questions; papers may show Clinton benefitted
from diversion offunds from failed S&L, Rocky Mountain News, February 5, 1994, Ed. F,
Page 45A.
DEPARTMENT
OF
THE
TREASURY ~:t~¢1
.':. . . . ~. (~I
TREASURY
NEW S
....~~~........................._~:z178~q~~~~~~~~....................
11
OFFICE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960
FOR RELEASE AT 3:00 p.m.
August 1, 1994
Contact:
Jon Murchinson
(202) 622-2960
TREASURY ANNOUNCES MARKET BORROWING ESTIMATES
The Treasury Department on Monday announced that its net market borrowing for the
July-September 1994 quarter is estimated to be $45 billion, with a $40 billion cash balance
on September 30. The Treasury also announced that its net market borrowing for the
October-December 1994 quarter is estimated to be in a range of $45 billion to $50 billion,
with a $30 billion cash balance at the end of December.
In the quarterly announcement of its borrowing needs on May 2, 1994, the Treasury
estimated net market borrowing during the July-September 1994 quarter to be in a range of
$55 billion to $60 billion, assuming a $40 billion cash balance on September 30. The $51
billion June 30 cash balance -- compared with $40 billion that had been estimated in May -accounts for most of the difference between the May and August market borrowing estimates
for the July-September quarter.
Actual net market borrowing in the quarter ended June 30, 1994 was $8.1 billion,
while the end-of-quarter cash balance was $5l.0 billion. On May 2, the Treasury had
estimated net market borrowing for the April-June quarter to be $8 billion, with a $40 billion
cash balance on June 30. The higher-than-expected end-of-June cash balance reflected a
reduction in the cash deficit.
-30-
LB-985
UBLIC DEBT NEWS
Department of the Treasury •
Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
August 1, 1994
CONTACT: Office of Financing
202-219-3350
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Tenders for $12,565 million of 13-week bills to be issued
August 4, 1994 and to mature November 3, 1994 were
accepted today (CUSIP: 912794N83).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average
Discount
Rate
4.32%
4.35%
4.35%
Investment
Rate
4.43%
4.46%
4.46%
Price
98.908
98.900
98.900
$10,000 was accepted at lower yields.
Tenders at the high discount rate were allotted 23%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Received
$48,863,490
Accepted
$12,564,536
$43,495,548
1.375,011
$44,870,559
$7,196,594
1.375,011
$8,571,605
3,108,715
3,108,715
884,216
$48,863,490
884,216
$12,564,536
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
An additional $160,684 thousand of bills will be
issued to foreign official institutions for new cash.
LB-986
UBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
August I, 1994
CONTACT: Office of Financing
202-219-3350
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Tenders for $12,403 million of 26-week bills to be issued
August 4, 1994 and to mature February 2, 1995 were
accepted today (CUSIP: 912794Q31).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average
Discount
Rate
4.73%
4.75%
4.75%
Investment
Rate
4.91%
4.93%
4.93%
Price
97.609
97.599
97.599
Tenders at the high discount rate were allotted 58%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Received
$45,243,790
Accepted
$12,403,166
$39,885,079
1,276,967
$41,162,046
$7,044,455
1.276,967
$8,321,422
3,050,000
3,050,000
1. 031,744
$45,243,790
1. 031. 744
$12,403,166
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
An additional $187,256 thousand of bills will be
issued to foreign official institutions for new cash.
LB-987
DEPARTMENT
OF
THE
TREASURY
'IREASURY (~
. :<:.+'~:
NEW
S
.................................J.~~~~~~:~~f./...............................
OFFICE OF PUBLIC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C.. 20220. (202) 622-2960
FOR IMMEDIAtE RELEASE
August 1, 1994
STATEMENT OF TREASURY SECRETARY LLOYD BENTSEN
BRADY LAW 100-DA Y REPORT
Before the Brady Law was passed, I heard its opponents say: you put Brady into
effect, you'll punish the law-abiding citizens who want to buy guns. The preliminary
numbers are in. They were wrong.
One hundred days after Brady went into effect, the law has punished those it
meant to punish: the criminals. It hasn't touched the good and honest gun buyers -- not
for a minute.
We work under the premise that most gun buyers are good, honest people. We
found 19 out of 20 had no problems passing the background check. But there's always
one bad apple. In this case it was one in 20. About 5 percent of the gun buyers were
stopped by Brady. They were stopped because they were armed robbers, or convicted
felons, or drug dealers, or rapists, or killers. We stopped them from buying guns, and we
probably stopped them from committing some terrible crimes. There's no way to prove
that, but I doubt bad guys buy guns to duck hunt.
The story of the Brady Law isn't just in the numbers. It's also in the real life
police investigations behind the numbers. Here's an example: in March, an accused
stalker went to Prairie Village, Kansas, (a suburb of Kansas City) to buy a gun. This
man was the subject of a restraining order for allegedly stalking his wife and threatening
to kill her. On the Brady form, he lied. He said he was a resident of Missouri, not
Kansas, and that's how we stopped him. According to the Prairie Village police, without
the Brady Law, he would have bought the gun on the spot and possibly killed his wife
and himself.
This 100-day study is a report card. We're still in the first term, but I don't know
how anyone can look at these statistics, can read these stories, and not say the Brady
Law gets an A. It's working.
Copies of the report "The Brady Law: The First 100 Days" are available by
calling (202) 622-2960.
-30LB-988
DEPARTMENT OF THE TREASURY
WASHINGTON. D. C.
UNDER SECRETARY
July 27, 1994
The Honorable Lloyd Bentsen
Secretary
Department of the Treasury
Washington, DC 20220
Dear Mr. Secretary:
The attached report sets forth the findings of a survey conducted
by the Treasury Department's Bureau of Alcohol, Tobacco and
Firearms (ATF) regarding the impact of the Brady Law. The survey
covers the 100-day period following the Law's implementation, and
contains information voluntarily submitted by Federally-licensed
firearms dealers and law enforcement authorities in nine selected
cities.
The 100-day survey represents only a preliminary assessment of
the Brady Law's efficacy.
still, the results are extremely
promising.
In the 100 days after the Brady Law became effective,
approximately five percent of persons who applied to purchase
handguns in the participating cities had their applications
denied. Moreover, this denial rate was achieved without
affecting the overall volume of handgun sales. This suggests
that the Brady Law is keeping handguns out of the reach of that
small percentage of persons who use handguns criminally, while
not unduly inconveniencing law-abiding handgun owners.
The anecdotal evidence accompanying the 100-day survey bolsters
the conclusion that the Brady Law is working. Brady has alerted
law enforcement authorities to attempts by convicted and
potential offenders to purchase handguns -- including convicted
rapists, murderers and drug dealers.
In one notable case, the
Brady Law was instrumental in preventing an accused stalker from
acquiring a handgun.
The Office of Enforcement and ATF will continue to monitor the
Brady Law's impact as implementation proceeds. We ~re confident
that the initial evidence of Brady's success, as reflected in the
lOO-day survey, will be corroborated further over time.
Sincerely,
R"t~1c Jj~
~~ald
K. No¢e
Under Secretary (Enforcement)
Table of Contents
Introduction ............................................................................................................................ 1
Brady at Work ......................................................................................................................... 1
Background on the Brady Law ............................................................................................ 2
The Brady 100-Day Survey .................................................................................................. 3
Gun Dealer Survey Results ........................................................................................ 5
Chief Law Enforcement Officers Survey Results .................................................. 6
Firearm Criminal Record Queries through NCIC ........................................................... 7
Obsel"V"ations ........................................................................................................................... 9
Conclusion .............................................................................................................................. 10
Appendix: Sample Brady Form
The Brady Law: The First 100 Days
At the instruction of Treasury Secretary Lloyd Bentsen, the Bureau of Alcohol, Tobacco, and
Firearms (ATF) has conducted a preliminary review of the practical impact and efficacy of the
Brady Law during its first 100 days of full implementation, from February 28 through June 6,
1994. This report includes brief summaries of cases involving the Brady Law, background on
the Brady Law, a survey of licensed gun dealers and police in nine cities across the country, a
summary of Brady-related inquiries to the FBI's criminal history data base, observations on how
the Law is being implemented, and conclusions about its effectiveness.
The initial evidence suggests that the Brady Law effectively alerts law enforcement authorities to
criminals and other prohibited individuals attempting to purchase handguns, while protecting the
rights of law-abiding citizens.
These results, however, are only preliminary. Nationwide data is not available because the Brady
Law does not require law enforcement agencies or gun dealers to maintain records on the overall
numbers or results of Brady background checks. The survey information in this report was
provided voluntarily by licensed gun dealers and police departments in the nine cities, and ATF is
grateful for their cooperation. ATF will continue to monitor closely Brady's effectiveness and to
gather information from the field in order to better enforce the Law, make it more difficult for
criminals to buy handguns, and protect the rights of law-abiding citizens.
Brady at Work
Some of the most compelling evidence of Brady's effectiveness are the actual cases where Brady
enabled licensed gun dealers to deny guns to prohibited buyers or even led to the arrest of
wanted criminals:
•
In February 1994, the then newly-enacted Brady Law enabled the Morehouse Parish
Sheriff in Louisiana to stop the sale of a handgun to an individual convicted of armed
robbery.
•
In March 1994, the Brady Law prevented an accused stalker in Prairie Village, Kansas,
from purchasing a handgun. The attempted handgun purchase was stopped by the Prairie
Village Police Department when a Brady background check conducted by the
Department revealed that the prospecti ve purchaser, who was the subje~t of a restraining
order for allegedly stalking his wife and threatening to kill her, was a re'sident of
Missouri, not Kansas, as he had represented in his Brady form.
•
Also in March 1994, the Brady Law played an integral role in disrupting a gun-running
operation shipping weapons from Georgia to New York. ATF, working in conjunction
with the Savannah, Georgia, Police Department, arrested a man who had purchased 16
handguns after a Brady background check raised significant questions about the man's
identity and state of residence. Subsequent investigation confrrmed that the man used an
alias on his form to purchase the guns and that he was a resident of New York, not
Georgia. A search warrant was executed at the trafficker's Georgia base of operations.
and the 16 handguns he had purchased were recovered.
•
In April 1994. a suspected drug dealer was arrested in San Antonio, Texas. after a Brady
background check performed by the Uvalde County Sheriff's Office indicated that the
alleged dealer was the subject of outstanding warrants for possession of cocaine with
intent to distribute. possession of heroin with intent to distribute and failure to appear in
court.
•
This spring, a man wanted by police in Orange County, Florida, for battery of a law
enforcement officer was arrested while attempting Lo purchase a handgun in Columbia,
South Carolina. Florida authorities had been unable to locate him, but the disclosure of
his current address on the Brady form enabled agents of the South Carolina State Law
Enforcement Di vision to locate and arrest him.
•
In the first three months of the Brady Law, the Ohio Attorney General's office conducted
16,499 background checks. It reports that 129 convicted felons - among them
convicted rapists, killers, and drug dealers - were prohibited from purchasing guns.
These are but some of the results reported by law enforcement authorities across the country
which illustrate that the Brady Law is working to keep handguns out of the hands of criminals.
ATF's survey of licensed gun dealers and police in nine cities during the first 100 days of the
Brady Law supports these anecdotal reports of the Law's success. The survey indicates that
during that time approximately five percent of the individuals who applied to purchase handguns
were prevented from making such purchases. At the same time, this denial rate had little impact
on the overall volume of handgun sales. The Brady Law is having its intended effect targeting that small percentage of persons who use handguns in furtherance of criminal activity
while simultaneously protecting the rights of law-abiding citizens.
Background
Nearly 7.5 million firearms are sold through retail outlets in the United States annually. Of
these, almost half are handguns. Under the Federal Gun Control Act of 1968 and under most
state laws, criminals, the mentally ill and others are barred from owning guns. However, prior to
February 28, 1994, the effective date of the Brady Law, there was no nationwide system in place
to check the backgrounds of persons legally precluded from owning such weapons. The
prospective purchaser merely had to sign a statement attesting that he or she was not legally
forbidden from purchasing a firearm. Handguns were sold on the honor system - there was no
nationwide system for law enforcement officials to verify purchaser statements.
2
The Brady Law addressed this ineffective system of enforcement by requiring that every retail
sale of a handgun be referred to a law enforcement agency for a possible background check.
Under Brady, a prospective handgun purchaser must fill out a form stating that he or she intends
to purchase a handgun and certifying that he or she does not fall within one of a number of
enumerated categories of persons prohibited from making such a purchase. I These categories
include convicted felons, illegal drug users or addicts, persons under indictment. fugitives, illegal
aliens and persons who have renounced their U.S. citizenship. The gun dealer must transmit the
form to the "Chief Law Enforcement Officer"? (CLEO) in the gun buyer's home jurisdiction
within one day. The Chief Law Enforcement Officer then makes a reasonable effort to ascertain
within five business days whether receipt or possession of a handgun would be in violation of the
law. If the Chief Law Enforcement Officer does not inform the dealer within five working days
that the sale cannot go forward, the sale may be consummated.
The Brady Law establishes exemptions to the background check provision in states that already
require a permit to purchase a handgun, or in states that already have in place a background
check system comparable to Brady's. As of August I, 1994, 29 states and territories will be
subject to the Brady Law. One of these, Arizona, is considering legislation which would remove
it from Brady's scope. In addition to the state law exemptions, certain types of handgun
transactions may be removed from the purview of Brady (for example, if ATF determines that
remote geographic location combined with a lack of telecommunications facilities render a
background check impractical).
Brady Survey
The Brady Law itself does not authorize ATF to require any kind of reports from federal firearms
licensees (FFLs) concerning the implementation of the Brady Law. Consequently, there is no
mechanism to track trends of handgun purchases and denials. A number of law enforcement
agencies and gun dealers agreed, however, to cooperate in a comprehensive survey of Brady
fonn submissions and denials during the 100-day period following the Law's activation.
ATF, in conjunction with the Department of Justice, selected the cities participating in the Brady
Law lOO-day survey. They are Houston, Texas; Louisville, Kentucky; Seattle, Washington;
Pittsburgh, Pennsylvania; Providence, Rhode Island; Abilene, Texas; Atlanta, Georgia;
Shreveport, Louisiana; and Cleveland, Ohio. ATF surveyed 70 of the largest volume gun dealers
and 16 Chief Law Enforcement Officers located in the designated cities. The fFL numbers and
law enforcement numbers for each city do not match because: a) not all gun dealers in the
participating cities were surveyed; and b) the law enforcement officers performed background
checks on local residents buying guns from dealers in other jurisdictions as well as those buying
guns from local dealers.
1
Z
A copy of the Brady form is attached to this report.
"Chief Law Enforcement Officer" is statutorily defined as a "chief of police, or sheriff, or equivalent
officer, or their designee.
If
3
Department Of The Treasury
Bureau Of Alcohol, Tobacco and Firearms
",Ule '.,.' Brady Law
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States which mnst (:omply with the Federal re(luirements
States which meet the Federal requirements through an alternative
*
Survl'y Participants
Virgin Wands
Results
1. Gun Dealer Sun'e\'
The chart below sets forth the number of applications for handgun purchases that were submitted
during the relevant period and the corresponding number of denials, as reported by the FFLs
surveyed:
Survey City
Number of
FFLs
Interviewed
Number of
Applications
Initiated
Number of
Applications
Denied
Houston, TX
5
2,104
345
16.4
Louisville, KY
10
1,670
100
6
Seattle, WA
8
2,135
9
.4
Pittsburgh, PA
10
2,204
39
1.8
Providence, RI
5
113
13
11.5
Abilene, TX
8
437
6
1.4
Atlanta, GA
10
1,385
33
2.4
Shreveport, LA
9
1,377
65
4.7
Cleveland, OH
5
302
14
4.6
Totals
70
11,727
624
5.3
5
Denial Rate (%)
2. Chie(LaH'
Et~(orcemen{
O'/ficers
The chart below covers the same categories and sets forth data obtained from Chief Law
Enforcement Officers in the surveyed cities.
Survey City
Number of Chief
Law Enforcement
Officers
Interviewed
Number of
Applications
Initiated
Number of
Applications
Denied
Denial Rate (%)
Houston, TX
3
12,832
1220
9.5
Louisville, KY
17,440
624
3.6
Seattle, WA
2,200
36
l.6
Pittsburgh, PA
8,600
533
6.2
Providence, RI
348
5
1.4
Abilene, TX
1
501
12
2.4
Atlanta, GA
5
7,054
365
5.2
Shreveport, LA
2
1,835
100
5.4
Cleveland,OH
1
13,622
113
.8
16
64,432
3008
4.7
Totals
6
Firearm Criminal Record Queries Through NCIC
The FBI's criminal history data base, the National Criminal Infonnation Center (NCIC),
provides an accounting of the number of queries made by law enforcement authorities regarding
firearms transactions. In general, the first step a law enforcement officer takes in processing a
Brady background check application is to check it against the NCIC. When the initial check
turns up an indication that the prospective buyer may be prohibited from buying a gun, the
officer will usually run a follow-up query to confirm it. This makes NCIC checks a rough but
useful measurement of the number of possible denials of handgun purchases under Brady.
As the chart below indicates, a total of 1,146,644 such queries were made between March I and
May 31. Of these queries, 73,945, or 6.4 percent, resulted in follow-up queries. This does not mean
that 6.4 percent of the original query subjects had backgrounds that rendered them ineligible to
purchase a firearm, but it does indicate that the number of potential denials was around 6.4 percent and
that the actual denials reported in our survey (4.7 - 5.3 percent), is consistent with actual use of the
system nationwide.
Statesfferrilories Firearms Transaction Checks Second Level Queries
Potential Denials (% )
(for the period 3/1194 - 5/31194)
Alabama (8)
Alaska (8)
Arizona (B)
Arkansas (8)
California
Colorado
Connecticut
Delaware
District of Columbia***
Florida
Georgia (8)
Hawaii
Idaho (8)
Illinois
Indiana
Iowa
Kansas (8)
Kentucky (8)
Louisiana (8)
Maine (8)
Maryland
Massachusetts
Michigan
46,809
3,318
37,998
7,830
248,756
20,445
989
4,572
0
76,880
23,624
2,648
10,959
117,099
881
3,131
6,649
18,124
14,670
2,955
22,502
3,172
27,023
3,177
538
4,275
146
1
1,387
80
268
0
6,483
7,920
259
1,343
0
74
246
1,066
1,874
1,435
179
1,479
44
608
7
6.8
16.2
11.3
1.9
0.0
6.8
8.1
5.9
0.0
8.4
33.5
9.8
12.3
0.0
8.4
7.9
16.0
10.3
9.8
6.1
6.6
1.4
2.2
continued ..... .
StateslTerritorics
Minnesota (BE)
Mississippi (8)
Missouri
Montana (8)
Nebraska
Nevada (8)
New Hampshire (8)
New Jersey
New Mexico (B)
New York
North Carolina (B)
North Dakota (B)
Ohio (B)
Oklahoma (8)
Oregon
Pennsylvania (B)
Puerto Rico (8)
Rhode Island
South Carolina (B)
South Dakota (B)
Tennessee*
Texas (B)
Utah *
Vennont(B)
Virginia
Washington (B)
West Virginia (B)
Wisconsin**
Wyoming (B)
Totals
Firearms Transaction Checks Second Level Queries Potential Denials (%)
(for the pe ri od 311 /94 - 5/31/94)
11,754
10,585
8,207
4,753
1,801
12,296
7,000
270
6,585
11,137
40,259
1,603
18,944
15,066
34,897
38,220
1,924
3,142
22,624
829
159
76,204
2,515
1,309
54,076
48,076
8,473
0
2,902
1,146,644
722
892
1,007
598
54
2,155
419
7
950
182
1,902
48
717
1,862
2,668
3,142
297
237
1,050
70
13
9,814
317
81
5,276
5,402
830
0
351
6.1
8.4
12.3
12.6
3.0
17.5
6.0
2.6
14.4
1.6
4.7
3.0
3.8
12.4
7.6
8.2
15.4
7.5
4.6
8.4
8.2
12.9
12.6
6.2
9.8
11.2
9.8
0.0
12.1
73,945
6.4
(B) Brady states
(BE) Minnesota will become exempt from Brady as of August 1, 1994
*Statistics are for the month of May only
**No statistics available
***Retail sales of firearms prohibited by law in the District of Columbia
8
Observations
Business Impact
In addition to the foregoing evidence of the Brady Law's effectiveness, the ATF lOO-day survey
has yielded other valuable insights. For example, the majority of FFLs interviewed felt that
business, which had decreased at the beginning of Brady Law's activation, has returned to
nonnal. The initial decline in sales can be attributed to the surge of buying that preceded
implementation of the Brady Law.
Moreover, all of the Chief Law Enforcement Officers interviewed stated that five business days
is sufficient time to conduct Brady background checks. The Chief Law Enforcement Officers
generally have been flexible and creative in their approaches to receiving Brady fonns. Fonns
are being accepted by telephone, fax, mail or in person.
A growing number of states have decided to employ instant point-of-sale checks. Since Brady
became effective, three states have implemented such systems. Two other states are considering
adopting similar measures. In addition, a national instant check system is under development
and is scheduled to be in place by the end of 1998.
Making Compliance Easier
Numerous FFLs and Chief Law Enforcement Officers have discussed the need to have the Brady
fonn published in Spanish. ATF is following up on this suggestion. ATF is continuing to work
with FFLs and Chief Law Enforcement Officers to facilitate the smooth implementation of the
Brady Law. Seminars are being offered throughout the United States to ensure that FFLs and
Chief Law Enforcement Officers know the Brady Law's requirements and to provide the FFLs
and Chief Law Enforcement Officers with an opportunity to offer suggestions and raise
questions. ATF also is in the process of publishing a newsletter to apprise FFLs of current issues
and items of concern regarding the Brady Law.
Court Challenges
Sheriffs in seven states, who were designated as Chief Law Enforcement Officers for their
respective jurisdictions, have filed separate actions in federal district courts seeking to have the
Brady Law declared unconstitutional. The sheriffs have argued that the provision regarding
Chief Law Enforcement Officers conducting background checks of prospective handgun
purchasers violates the Tenth Amendment. To date, four courts have issued decisions. The
United States District Court for the Western District of Texas held that the Brady Law is
9
constitutional since it does not interfere with a state's sovereignty, but rather places only de
minimis duties on the Chief Law Enforcement Officer. United States District Courts in Montana,
Mississippi and Arizona, however, ruled that requiring the Chief Law Enforcement Officer to
carry out background checks impermissibly commandeers state executive officers to administer a
federal program, a violation of the Tenth Amendment. Notably, the courts in these adverse
decisions still left intact the core elements of the Brady Law. For example, the five-day waiting
period was not deemed violative of the Constitution.
Conclusion
ATF's goal in conducting the lOO-day survey was to gather empirical evidence of the Brady
Law's success from representative FFLs and Chief Law Enforcement Officers. Preliminary data
demonstrates that the Law is achieving its intended results. In the lOO-day period following the
Brady Law's inception, approximately five percent of all individuals trying to purchase handguns
were precluded from doing so. This rate of preclusion, moreover, was realized without
disrupting sales to legitimate handgun purchasers. Thus, Brady is successfully targeting the
small number of persons who use handguns criminally, and is doing so at a minimum of
inconvenience to responsible, law-abiding handgun users. ATF will continue monitoring the
Law's implementation to measure its impact and to ensure ongoing compliance.
10
Appendix
Sample Brady Form
11
Fonn Approved: OMS No. 1512-0520 (1/31
DEPARTMENT OF THE TREASURY
BUREAU OF ALCOHOL, TOBACCO AND FIREARMS
STATEMENT OF INTENT TO OBTAIN A HANDGUN(S)
Prepare in duplicate. All entnes must be
In
ink. Before completmg, please see notices and instructions on the back of thIs form.
SECTION A - TO BE COMPLETED PERSONAllY BY THE TRANSFEREE (BUYER). THE BUYER MUST PRINT IlEMS 1, 2, 3,4, AND 5 OF THIS SECTION.
1 TRANSFEREE'S (BUYER'S) NAME (Last, (and maiden, If applicable), first, middle)
2. DATE OF BIRTH (Month, day, year)
3. RESIDENCE ADDRESS (No., street, county, city, State, and ZIP code)
4. OPTIONAL INFORMATION - THE INFORMATION REQUESTED IN THIS ITEM (4) IS OPTIONAL BUT WILL HELP AVOID THE POSSIBILITY OF BEIN(
MISIDENTIFIED AS A FELON OR OTHER PROHIBITED PERSON
SOCIAL SECURITY NUMBER
HEIGHT
WEIGHT
PLACE OF BIRTH
5. STATEMENT OF TRANSFEREE (BUYER), EACH QUESTION MUST BE ANSWERED WITH "YES- OR "NO" CHECKED IN THE APPROPRIATE BOX
FOR EACH QUESTION.
YES
a. Are you under indictment or information' in any court for a
NO
crime punishable by imprisonment for a term e)(ceeding one
year? °A formal accusation of a crime made by a prosecuting
attorney, as distinguished from an indictment presented by a
grand jury.
r, (
YES
c. Are you a fugitive from justice?
-
I
d. Are you an unlawful user of, or addicted to, marijuana, or any I
depressant, stimulant, or narcotic drug, or any other controlled ,
,
substance?
b. Have you been convicted in any court of a crime punishable
by imprisonment for a term exceeding one year? (Note: A
"YES" answer is necessary if the ludge could have given a
sentence of more than one year. A "YES" answer is not
required jf you have been pardoned for the crime or the
conviction has been e)(punged or set aside, or you have had
your civil rights restored, and under the law where the
conviction occurred, you are not prohibited from receiving or
possessing any firearm.)
e. Have you ever been adjudicated mentally defective or have
you ever been committed to a mental institution?
f.
Have you been discharged from the Armed Forces under
dishonorable conditions?
------
i
-.-I
I
g. Are you illegally in the United States?
h. Are you a person who, having been a citIZen of the United
States, has renounced hislher citizenship?
-
,
i
I hereby certify that the answers to the above are true and correct. I understand that a person who answers ·Yes to any of the above questions 15
prohibited from purchasing and/or possessing a firearm, except as otherwise provided by Federal law. I also understand that the making of any fals
oral or written statement or the exhibiting of any false or misrepresented identification with respect to this transaction is a crime punishable as a
felony,
IDATE
TRANSFEREE'S (BUYER'S) SIGNATURE
SECTION B - TO BE COMPLETED BY THE TRANSFEROR (SELLER) (SEE NOTICES AND INSTRUCTIONS ON REVERSE.)
6. TRADE/CORPORATE NAME, ADDRESS, AND TELEPHONE NUMBER OF TRANSFEROR (SELLER)
FEDERAL FIREARMS LICENSE NUMBEF
7. THE TRANSFEREE (BUYER) HAS IDENTIFIED HIMSELF/HERSELF TO ME BY USING A DRIVER'S LICENSE OR OTHER IDENTIFICATION THAT
CONTAINS THE TRANSFEREE'S (BUYER'S) NAME, DATE OF BIRTH, RESIDENCE ADDRESS AND PHOTOGRAPH.
TYPE OF IDENTIFICATION
o
DRIVER'S LICENSE
0
r--------------------------------NUMBER ON IDENTIFICATION
OTHER (Specify)
I ,
8. CONTENTS OF THE STATEMENT IN SECTION A OF THIS FORM WERE REC~IVED BY
OF
---------------------------------(Chief Law Enforcement Officer)
o
TELEPHONE
0
TELEFAX
n
IN PERSON
BY
ON
(Law Enforcement Agency)
(Check the appropriate answer.)
0
(Date)
OTHER (Specify)
9. A COPY OF THE STATEMENT IN SECTION A OF THIS FORM WAS TRANSMITTED TO THE CHIEF LAW ENFORCEMENT OFFICER ON
_________________ BY
o
(Date)
MAIL
0
10. ON
(Check the appropriate answer.)
TELEFAX
0
IN PERSON
0
OTHER (Specify)
, THE CHIEF LAW ENFORCEMENT OFFICER PROVIDED REASON TO BELIEVE THAT THIS TRANSFER
(Date)
WOULD
WOULD NOT VIOLATE FEDERAL, STATE, OR LOCAL LAWS. AGENCY IDENTIFIER
11. TRANSFEROfi'S (SELlER'S) SIGNATURE
TRANSFEROR'S TITLE
DATE
DEPARTMENT
OF
THE
TREASURY (t.q,~:
\~~~/
TREASURY
NEW S
~~1789~. . . . . . . . . . . . . .11...............
..........................
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C.. 20220. (202) 622-2960
Statement of Roger Altman
Deputy Secretary of the Treasury
Before the Committee on Banking, Housing
and Urban Affairs of the United States Senate
August 2, 1994
LB-989
Mr. Chainnan and Members of the Committee: My name is Roger Altman. On January 21,
1993, I was unanimously confirmed by the Senate as Deputy Secretary of the Treasury and
have served in that capacity since then. That was the second time I was unanimously
confinned to serve in the Treasury. Over the four years of the Carter Administration, I
served as Assistant Secretary for Domestic Finance and worked closely with this Committee
at that time, especially on the Chrysler and New York City rescues.
I feel privileged to have served in these capacities. Public service has always been an
important part of my life, as it was for my parents. Over those years, and in those positions,
I may have made some poor decisions or other mistakes, but my integrity has never been
questioned.
Let me address first the very basic issue as to whether any effort was made by Treasury or
White House staff to impede or alter in any way the criminal or civil processes of the RTC
as they relate to Madison Guaranty. I include within that question, the issue of whether any
infonnation was improperly imparted to the White House.
To the best of my knowledge, there was no effort on the part of any White House or
Treasury staff to impede or affect in any way the RTC investigations. Moreover, no
member of the RTC or Treasury staff, to my knowledge improperly imparted any
infonnation about Madison Guaranty to the White House. I did not do it myself, and I am
not aware of anyone else doing so.
Three independent investigations have addressed these questions. First, we have the results
of the legal investigation by the independent counsel, Mr. Fiske. All issues involved in his
investigation were fully and thoroughly investigated, including a review of my testimony
before this Committee. And we are all familiar with his conclusions.
There is also the report of the Office of Government Ethics which Secretary Bentsen released
on Sunday. This concluded that there had been no unethical activities on the part of any
Treasury personnel. The Office of Government Ethics is an independent body. As with
Mr. Fiske, it had access to all documents and took testimony, under oath, from all those
involved, including your witnesses.
There is also the report of Mr. Cutler, White House Counsel, on the question of any
unethical behavior by White House staff. He concluded there was none.
These investigations have confinned that the Clinton Administration did not interfere in any
aspect of the Madison Guaranty case. There is no evidence, I repeat, no evidence that either
the criminal or civil aspects were compromised, delayed or altered in any way. Simply
none.
I believe that the conclusions of these three separate investigations are absolutely correct.
And I ask the Committee to bear in mind the larger context of my involvement in the
handling of the Madison matter by the RTC:
Most importantly, I never made any decisions with respect to the Madison
case;
I was committed, as I told the White House staff and others, to have the RTC
General Counsel, Ellen Kulka, make whatever determination was necessary
with respect to any civil claims arising from Madison;
My meeting with the White House staff on February 2 was cleared by both
Treasury General Counsel and the designated Treasury Ethics Officer;
I obtained two written ethics opinions stating that my recusal was not required;
and
I recused myself from the Madison matter on February 25th without ever
having made any decision in that case.
Secondly, let me tum to what I believe is the most important issue between this Committee
and me; i.e. my testimony of February 24.
I do not have perfect recall, and I may have heard or understood questions in a way that was
not intended by the Senator asking the question. If I did so, I sincerely apologize to all
members of the Committee.
But I want to be clear. In no way did I intend to mislead or not to provide complete and
forthright answers. I have too much respect for this Committee, for our system of
government and for the need for full and forthright communications between the executive
and legislative branches of our government.
The TreasurylRTC Relationship
Let me tum to describing the interaction between the Clinton Administration and the RTC.
First, when Mr. Casey resigned as CEO in March 1993, the Administration had only taken
office five or six weeks beforehand and had not yet chosen its nominee for this position.
Indeed, only two U. S. Treasury officials had even been confinned -- Secretary Bentsen and
me.
Secretary Bentsen asked me to assume this position until a pennanent CEO was nominated
and confirmed. As others will attest, I neither sought nor wanted this assignment, but
2
accepted it because there was no one else. And, during the discussions about my
appointment, there was no mention by anyone of Madison Guaranty.
In June 1993, we submitted a nomination for rpnnanent chairperson of the RTC.
expectation was that he would be promptly confu~ned, and I could leave the agency.
Our
Our nominee was a Republican, and an active one. He was well qualified for this position,
and the Administration supported his nomination throughout the Congressional session. But,
the nomination was not taken up by the Senate. After Congress completed its work last
Fall, he withdrew his name from further consideration.
Let me make an observation about this situation. The Administration nominated an active
Republican for the top RTC job. That is not consistent with trying to exert undue control
over the agency or one of its investigations.
When I became RTC Chainnan, the agency was managed on a day to day basis by its two
Senior Vice Presidents -- Bill Roelle and Lamar Kelly. Almost all members of the RTC
senior staff reported to one or the other. These two men were appointees of Mr. Casey,
who, in tum, had been appointed by President Bush. They were thoroughly professional
and were retained throughout all of 1993. Each then left at his own initiative to rejoin the
FDIC.
Retaining the two Senior V ice Presidents who we inherited is also not consistent with trying
to exert political control over the agency. Moreover, these two individuals had no
motivation to show favoritism on Madison Guaranty, and I do not believe that they did so.
During my tenure at the RTC, I was also serving as Deputy Secretary of the Treasury. In
that role, I was deeply involved in policy initiatives ranging from passage of the President's
Economic Plan to co-chairing the U.S.-Japan framework negotiations. These responsibilities
pennitted me limited time for RTC matters.
My RTC involvement typically related to broad public issues, like the long struggle to pass
the RTC Completion Act last year. At no time did I ever ask to be briefed, or was I briefed,
on any investigation or the status or outlook for any case. Not once. My role was to
provide general oversight at twice-weekly RTC Senior Staff meetings. These involved 8 - 10
RTC officials. They were the only RTC employees with whom I ever had personal contact
of any kind.
3
The Criminal Referral
Last Fall, Bill Roelle or Jean Hanson, or both, advised me, because of impending pUblicity,
that the RTC was considering referring the Madison matter to the Justice Department for
criminal investigation and that the referral could mention the President and First Lady in
some capacity. I had never asked to be involved in Madison-related matters or any other
RTC investigation. Indeed, until that time, I had known nothing about Madison except
through the press. And, as I said, I believe they advised me because publicity was
imminent.
I was also advised that such referral decisions are typically made at the regional office level.
I responded by saying that this referral decision should be made in exactly the same fashion
as in any other case. If that meant the regional office level, then that's where the decision
would be made.
There were no further conversations with me on this subject. I ultimately learned through
the press that the case indeed had been referred to the Justice Department.
I do not believe that I suggested that the White House be infonned on any facts relating to
this referral. But, if Ms. Hanson did advise the White House of an impending press leak on
it, I see nothing improper in that.
Mr. Roelle has testified that he advised me of a possible criminal referral as early as March
1993. I respect him but I do not recall it.
There have also been questions on press articles on Madison which I may have faxed to
Mr. Nussbaum. He has said that he has no recollection of receiving them. I don't recall
sending them either. But there would be nothing wrong with sending press articles to
anyone. And, there isn't a shred of evidence that I conveyed sensitive infonnation then or
at any other time.
The February 2 Meeting
During our meeting at the White House on February 2, we conveyed no infonnation on the
facts , merits or outlook for the case or the statute of limitations decision. That would have
been impossible because I had no infonnation on those matters. I never had such
infonnation on Madison, or any other case, and don't have any today.
The only information we provided which related to the case involved a description of the
generic and procedural alternatives which face the RTC on any expiring statute of limitations
situation , and indeed faced it on Madison. All of that infonnation was in the public domain.
It had previously been provided to representatives of the Congress, upon request. And, it
4
was in the hands of the media. The Washington Times, for example, had already printed
a summary of these procedural alternatives.
During the months of December and January, there were at least seven meetings or
conversations between RTC officials and House and Senate staff, all requested by the latter.
Three of these involved Senator D'Amato's staff. All of these centered around the statute
of limitations issues and the supplying to Congress of documents related to Madison.
Moreover, from December 1993 through February 1994, a series of Congressional inquiries
regarding the pursuit of civil claims arising from the Madison failure came directly to me.
They included a letter on January 11 from forty-one Republican Senators and a letter on
January 2S from Senator D' Amato and a letter from Congressman Leach. These urged, in
Senator D' Amato's words, "take action to voluntarily seek agreements from potential parties
to pre-initiated legal action ... I can see no reason for further delay on your part ... please
provide me with your conclusion immediately."
The Congressional inquiries directed to me, of course, required a response. Prior to
receiving them, I was not familiar with the statute of limitations issues. I am not a lawyer
and, for example, had never previously heard of a tolling agreement.
To assist in preparing responses to Congressional inquiries, Ellen Kulka, RTC General
Counsel, briefed me on these issues. I learned that the RTC had to make a decision by
February 28. The alternatives were: (1) seeking a tolling agreement with the parties against
whom a claim might be brought; or (2) failing that, filing a claim in court; or (3) concluding
that no basis existed for pursuing a claim. This information, together with the facts relating
to the criminal referral, was the sum total of information relating to Madison which was
known to me.
My responses to Members of Congress were very direct. We pledged an impartial process,
a thorough review and "if such (civil) claims do exist, the RTC will vigorously pursue all
appropriate remedies using standard procedures in such cases, which could include seeking
agreements to toll the statute of limitations. "
With the volume of Congressional and press inquiries rising, it seemed to me that, first, the
White House should have the same information which was being provided to Congressional
Staff and the press; and second, it was appropriate to advise the White House of events
which could affect its function. Those were my only motivations.
On February 2, Jean Hanson and I went to the White House. She attended because, as
Treasury's senior lawyer, she had been helping me on various RTC legal matters, and the
subject maller was inherently legal. She saw nothing wrong with providing this information
S
to the White House. I later learned that she also had the good judgment to check the ethical
issues with Dennis Foreman, Treasury's chief ethics officer, who also saw nothing improper.
Mr. Foreman is a career appointee who preceded the Clinton Administration.
In other words, Treasury's General Counsel and its senior ethics officer both approved this
meeting.
The meeting lasted no more than twenty minutes. Initially, Ms. Hanson and I described the
generic procedures which the RTC used in this or any other case facing an expiring statute
of limitations. We recited the three alternatives, following talking points which she had
prepared. This Committee has a copy of those.
This was the total information provided which related to the case. We provided no
information on the status or outlook for the case. That would have been impossible because
we possessed none.
The Office of Government Ethics, which took testimony under oath from all participants,
said in its report that "nothing . . . suggests that (this) part of the meeting involved a
disclosure of nonpublic information."
The Question of Recusal
Toward the end of the February 2 meeting, I also raised the question of recusal. Let me
now address that. The issue of recusal is a false one. Whether I recused myself or not
would have had no impact on the case. None at all.
The facts are that I began thinking about recusal around February I, and on February 25,
I did recuse myself. No matter came to me for decision on any case, including Madison.
Moreover, prior to recusing myself, I was de facto recused. Decisions on cases never
came to me at any time during my RTC tenure. And, I had specifically reaffirmed to the
RTC General Counsel, before the February 2 meeting, that she would be making all
decisions related to Madison, not me. Indeed, I had told her that more than once and with
others present.
On February 2 when I informed the White House that I was thinking about recusal, I told
them that it was irrelevant because the RTC General Counsel would be making all decisions
on Madison, not me. The Office of Government Ethics report confirms my de facto recusal.
It states that "recusal is just another word for nonparticipation." I had already chosen nonparticipation.
6
Nine days after the February 2 meeting, Congress passed a two-year extension of the statute
of limitations on Madison Guaranty. That made recusal entirely moot. My term as RTC
Chamnan was to expire (and did expire) on March 30. With such additional time, it was
almost certain that the R TC would not be making any Madison decisions by my March 30
termination date.
In retrospect, I perhaps should have recused myself right off the bat.
controversy would have been avoided.
Some of this
But, before February 2, I had been advised that there was no legal or ethical requirement to
recuse myself. I later received two written opinions from ethics officers to that effect.
Moreover, it isn't clear whether recusing oneself in the absence of such requirements is
entirely appropriate either. The Office of Government Ethics Report questions whether I
made the right decision to recuse or, instead, had a duty to serve.
I don't think that taking three weeks to make such a complex decision is all that surprising.
But, again, the important point is that I recused myself without ever having participated in
any decisions on Madison.
The February 24 Testimony
Let me address now the issues which have been raised about my February 24 testimony.
I have a deep respect for our system of government, the role of the Congress and the
importance of testimony by the Executive Branch. Our system cannot function properly
without honest communication among the three branches. It is the equivalent of a sacred
trust.
I testified many times during my four years in the Carter Administration and during my
service in this Administration. And, I have always tried my best to testify in the most
forthright way.
I realize that, in retrospect, my testimony of February 24 may appear too narrow or perhaps
incomplete. I regret that perception and apologize for it.
I want to emphasize, however, that there was never any intent to mislead this Committee.
I prepared for that testimony with 10 or IS members of RTC and Treasury Staff, and my
answers were in line with the responses developed by that group.
The relevant exchanges on Madison Guaranty that day consumed less than ten minutes. I
thought that my answers were responsive to the questions I was asked. Given an opportunity
7
to do it over again, I would have added more infonnation. But, my intention was to testify
forthrightly, as I have always tried to do. I hope I can reassure you of that today.
Testimony on the Fall 1993 Treasury/white House Meetings
Let me be specific about my testimony on February 24th. Senator Gramm asked me if lor
any member of my staff had any communication with the White House regarding Whitewater
or Madison Guaranty. I answered that I had one substantive contact. Senator Gramm asked
me to describe the substance of that one contact. I described the February 2 meeting at the
White House and the discussion about the generic procedures that the RTC would follow
when a statute of limitations was about to expire.
I did not mention the meetings between Ms. Hanson and others at the White House on
September 29 and October 14 because I was not aware of them at the time of my testimony
on February 24.
On March 2, one week later, I received a call from Mr. Podesta of the White House. He
asked me, in effect, about "the other two meetings." I had never heard of them and told him
so. Mr. Cutler's chronology is clear on this point.
I promptly called Ms. Hanson and Mr. Steiner, who con finned the existence of two Fall
meetings. Neither challenged my statement to them that I'd not heard of those meetings.
I then prepared and sent a letter to the Chainnan of this Committee indicating that I had just
learned of two meetings in the Fall, my impression that they related to press inquiries and
that I wanted to expand the record accordingly. I believe that I also spoke by telephone to
Senator Riegle before sending that letter. I wanted this Committee to have this new
infonnation immediately.
I also telephoned Senator Bond, who had asked the original question. I also wanted to advise
him immediately. We had a cordial conversation and he thanked me for alerting him.
Ms. Hanson testified yesterday that her discussion in September 1993, was at my request.
I do not believe that to be the case. Recollections can differ, of course, especially on events
which occurred five months earlier. There is nothing unusual in that. I just disagree with
Ms. Hanson's recollection.
Let me buttress that point this way. Ms. Hanson helped urepare the questions and answers
for my testimony about White House contacts. Ms. Hanson sat directly behind me during
my testimony. Just after my response to Senator Bond, I turned to her and she confinned
my answer. Then, she and I had lunch together afterwards. A week passed before
Mr. Podesta's call, which alerted me to the Fall meetings. She then pre cleared my letter to
8
Senator Riegle which stated that I had no prior knowledge of these meetings. At none of
those times did she suggest that my recollection was faulty.
We also know that Ms. Hanson earlier prepared Q's & A's indicating that I had not asked
her to brief the White House last Fall. The Office of Government Ethics report, released
yesterday, indicated that she also answered "no" to a similar question which OGE or its
representatives asked.
I believe, Mr. Chainnan and Senator Bond, that these facts confinn my testimony on
February 24 that I had no knowledge of such meetings at the time of my testimony.
The February 2 Meeting
The Office of Government Ethics report concluded that no non-public infonnation on the
case was provided to the White House at the February 2 meeting. Its investigation included
testimony, taken under oath, from all participants in that meeting. Mr. Cutler's report,
based on a separate set of interviews with the same individuals, reached the same conclusion.
In addition, had sensitive infonnation on any aspect of the case been conveyed, Mr. Fiske
might not have reached the conclusion which he did.
Last Friday, Senator D' Amato charged that we had somehow advised the White House that
the RTC would be unable to complete its investigation of Madison by the February 28 statute
of limitations deadline. And, that this somehow signalled the President that he need not
enter into a tolling agreement because the deadline otherwise would lapse.
This is categorically false. Senator D' Amato is wrong. My testimony on this point was
wholly accurate. The record makes that clear.
What I told the White House about RTC procedures is documented in
my Talking Points for that meeting, which I know you have. Those
Talking Points say: "It is not certain where the analysis will be
completed, but it will be before February 28."
And the OGE report found no non-public infonnation was disclosed on
February 2.
Mr. Cutler's report and chronology state that no such information was
given on February 2.
Ellen Kulka, RTC General Counsel, made perfectly clear that no matter
what, she and the RTC would be ready to make a decision by
February 28.
9
I believe, and you can ask Mr. Ickes yourself when he appears before
you, that he did not intend to say I had told the White House the
investigation could not be concluded by February 28.
Supplements to the Record
Much has been made of my supplements to the record after the February 24 hearing. I do
not entirely understand this. The Chairman said at the conclusion of the hearing that the
record was open for additional information. It has always been my impression that
supplementing the record was a constructive act, not a bad one.
I want to stress to this Corrunittee that there was not a pattern of withholding or concealing
information. It's really the opposite. As soon as I learned or received information, I
immediately provided it to the Corrunittee. It could not all have been provided in the first
letter because I did not have it all then.
Only through a comprehensive review of files and logs was more information uncovered.
Ultimately, an exhaustive review by counsel turned up the final information.
I believe that providing such information to this Committee, as soon as it was available, was
the right step to take. It was not a case of dribbling out information which I had all along.
Now, let me get to the specifics.
There was only one discussion which related to the case itself and factors which would affect
its outcome. That was the discussion of generic alternatives facing the RTC in regard to the
expiring statute of limitations.
On February 24, Senator Domenici asked me if there were other contacts beyond the
February 2 meeting. My response was, in effect, that I am not counting bumping into
someone in the hall or debating stories in the morning newspapers. This clearly indicated
that there may have been other contacts but that I regarded them as incidental. Had Senator
Domenici or any other member of the Committee then asked me to review any other
contacts, I would have tried to recall them.
But, those additional contacts after February 2 indeed were incidental. They could not have
had any bearing whatsoever on the case.
But, in the days and weeks following my testimony, it became clear that any contacts which
could be remotely tied to the catch-all term "Whitewater" could be regarded differently. As
a result, I carefully reviewed my calendar and my telephone calls and incidental contacts
with White House personnel. I wanted to bend over backwards to be as complete as
possible.
10
I amended the record to include other incidental contacts although I did not consider them
related to the substance of Madison.
Initially, there was a brief telephone call to
Mr. McLarty a few days after the February 2 meeting to the effect that I was still
considering the issue of recusal. Similarly, around the same time, I had a brief discussion
with Harold Ickes to tell him essentially the same thing. Those brief conversations on
recusal could not, under any circumstances, have had a bearing on the case. I already had
removed myself from any possible role on the case.
Finally, the record was also amended to advise the committee that I had a brief discussion
with Mr. Ickes the night before my testimony. I told him that I intended to announce during
my testimony that I was stepping down as CEO of the RTC, as I did announce the next day.
That had nothing to do with Madison.
Around the same time, I literally ran into Mr. Nussbaum in a corridor of the White House.
He told me the Administration would soon be submitting its nominee for pennanent RTC
head. That had nothing to do with Madison either. But, I nevertheless amended the record
on a voluntary basis so that there would be no question.
Some think that I consciously failed to mention these other incidental contacts. That isn't
true. When we were here five months ago, I believed that I was responding properly to the
questions. I assure you, Mr. Chainnan, that there was no intent to mislead.
Testimony on Recusal
Questions also have been raised as to why the subject of recusal was not discussed in the
February 24 testimony.
I was not asked about recusal. There were several Q's and A's in my briefing book on
recusal. A team of ten or fifteen members of Treasury and RTC staff helped to prepare
them. Had there been any attempt to intentionally withhold information on the recusal, one
surely wouldn't have rehearsed answers on that subject with such a large group.
Had I been asked about recusal, I would have responded forthrightly. While I have
reservations about Mr. Steiner's diary, as you can imagine, it confirms the view that recusal
wasn't asked.
I did not mention recusal in my testimony because I did not think it was responsive to the
question asked. I may have been wrong in this regard, but I had no intention to mislead or
withhold information from the Committee. I believed at the time that the Committee was
interested in knowing whether Treasury or the RTC had improperly provided infonnation
to the White House on the substance of the Madison case. I was anxious to tell this
11
Committee that I had infonned the White House only about the generic procedures the RTC
would employ in such circumstances and about nothing else concerning the Madison Case.
Indeed, I remember saying "that was the whole conversation." And what I meant by that
was that was the whole conversation with respect to what I believed was the substance of the
case. No one asked me to describe everything that happened at the February 2 meeting.
I did not -- and still do not -- consider recusal to touch upon the substance of the Madison
case. Now, of course, I see that Committee members may feel that I was being too precise
in my answer. I assure the committee that it was not my intent to mislead or to withhold
infonnation. Indeed, I had with me on February 24 in my briefing book a series of questions
and answers on recusal which I was prepared to give in response to questions about recusal.
I had anticipated being asked directly about recusal, just as Ricki Tigert had been by the
Committee a few weeks earlier, but I was asked no such questions.
I have read news accounts of a battle over my recusal. The total discussions which I had on
recusal with White House personnel consumed approximately ten or fifteen minutes. I said
that I'd been advised to recuse myself and that I intended to take that advice. I didn't say
when. No one asked me not to recuse. Mr. Steiner's diary points out that, after the
February 2 meeting, everyone knew that I wasn't going to play any role in the case. Yes,
I did waver on the timing, but then executed the recusal three weeks later.
Conclusion
In closing, I would like to reiterate the key facts.
Three separate investigations have
concluded that no legal or ethical violations occurred. No one interfered in any way with
the Madison Case nor improperly imparted infonnation on it. And, I believe that my
testimony of February 24 was truthful.
I hope that these points, and the answers I'll now provide to your questions, will satisfy this
Committee that my conduct was proper. Thank you.
12
DEPARTMENT
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OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C.. 20220. (202) 622-2960
STATEMENT OF JEAN HANSON, TREASURY DEPARTMENT GENERAL
COUNSEL, BEFORE THE COMMITTEE ON BANKING, HOUSING, AND
URBAN AFFAIRS, UNITED STATES SENATE, 103D CONGRESS, 2D SESSION,
ON SEN ATE RESOLUTION 229
(August 1, 1994)
LB-990
STATEMENT OF JEAN HANSON, TREASURY DEPARTMENT GENERAL
COUNSEL, BEFORE THE COMMITTEE ON BANKING, HOUSING, AND
URBAN AFFAIRS, UNITED STATES SENATE, 103D CONGRESS, 2D SESSION,
ON SENATE RESOLUTION 229
(August 1, 1994)
Introduction
Mr. Chairman, Members of the Committee:
I am Jean Hanson, General Counsel of the Treasury Department. I have been privileged
to hold that position since June 1993. I am testifying today pursuant to Senate Resolution 229,
exploring communications between Treasury officials, including me, and White House personnel
relating to Madison Guaranty Savings & Loan ("Madison").
Out of respect for this Committee and for the investigations that preceded this
Committee's work, I have refrained from speaking with reporters about this matter. There have
been many recent leaks of my testimony and documents, which include numerous misstatements
and mischaracterizations. I welcome this opportunity to testify publicly and to speak for myself.
I hope you will make your judgments based on my testimony today.
I have tried my best to recollect everything that occurred about this matter. I have also
reflected on the reasons for these conversations. I know that these conversations violated no
law, no rule and no ethical standard. I also know that they were appropriate, and that they
furthered legitimate governmental interests.
Background
Before I turn to Madison, I want to tell you a little about myself. For nearly two decades
before coming to Washington, I practiced law in New York, and worked on complex corporate
transactions. I came to New York from Minnesota, where I was born, and where I was reared
to do things in a straightforward mid-Western way - honestly and by dint of hard work. I am
neither a "Beltway Insider" nor a political person; prior to coming to Washington, I had no
Stalement of Jean Hanson
Re: Senale Resolution 229
Page 2 of 14
contact whatsoever with the President or the First Lady; I did not campaign for them, or for any
candidate, and I do not owe my Treasury appointment to political activism. I was recruited for
my position. My husband is a Republican.
I did not know Secretary Bentsen before I accepted his offer to become Treasury General
Counsel; indeed, I did not know anyone at Treasury or in the White House.
I accepted
Secretary Bentsen's offer for one reason - I wanted to contribute to the important work of the
Government, and give something back to my Country. I still do.
My Role at Treasury and My Involvement in RTC Matters
At the outset, I would like to address my role in RTC matters. As Treasury General
Counsel, I am charged with carrying out duties and assignments given to me by Secretary
Bentsen or Deputy Secretary Altman. I fulfilled assignments relating to the RTC given to me
by Mr. Altman and, at times, Secretary Bentsen, but at no time did I ever hold any position at
the RTC, nor have I ever been acting RTC General Counsel.
To say the least, the RTC is an unusual entity, and people often misdescribe it and its
functions. For example, it is a corporation, not an "agency," except for limited purposes. It
is not a regulatory body, because it does not regulate anything. And, it is not independent the RTC CEO serves solely at the President's pleasure, unlike independent agencies, such as the
SEC and the CFTC. It has a finite life span, now scheduled to end next year. Except for its
CEO, it has no employees and must carry out its functions by utilizing FDIC and executive
branch personnel, including Treasury employees.
Statement of Jean Hanson
Re: Senate Resolution 229
Page 3 of 14
As Interim RTC CEO, Mr. Altman had statutory authority to seek the assistance of
Treasury personnel on matters related to RTC functions, and as Deputy Treasury Secretary he
had the authority to grant the assistance of such personnel. Mr. Altman asked me to assist him
with policy-related and other issues involving the RTC, and I did so. Mr. Altman undertook
to serve in two jobs, for a limited period. He was entitled to all the assistance he could muster.
It was entirely appropriate for me to assist him in any legitimate way he requested.
How I Learned about Madison, and Why
I now tum to Madison, and what I learned, how, from whom and to whom I imparted
that knowledge. Given time constraints, I will not cover every meeting or conversation that I
discussed in my deposition before the Committee.
Rather, I address the principal contacts
regarding Madison in which I was involved.
To put this into context, it is important to understand that there were two distinct phases
to the RTC' s consideration of Madison - fITst, was the preparation of multiple criminal referrals
relating to Madison that I ultimately learned were forwarded to the Justice Department, and
second, was the consideration by the RTC of potential civil claims that might be brought against
various persons who had had some involvement with Madison. From the last few days of
September 1993, through the second week of October 1993, the limited discussions in which I
participated related to concerns about leaks to the press of the Madison criminal referrals.
In December, the passage of the RTC Completion Act revived the previously lapsed
statute of limitations for many potential civil cases, including Madison. From mid-January of
this year, until the end of February, the limited discussions in which I participated related to the
Statement of Jean Hanson
Re: Senate Resolution 229
Page 4 of 14
statute of limitations and other procedural matters surrounding possible civil claims related to
Madison.
The September 1993 Discussions.
On September 27, 1993, RTC Senior Vice President
William Roelle called to tell me that nine criminal referrals related to Madison were on their
way from the RTC in Kansas City to Washington, after which they would be forwarded to the
Justice Department; I clearly understood from Mr. Roelle that the referrals, and the infonnation
about them that Mr. Roelle imparted to me, would be leaked to the press when they arrived in
Washington - which in fact did occur very close in time to Mr. Roelle's call to me. Mr.
Roelle summarized the referrals, and said the President and Mrs. Clinton were mentioned as
possible witnesses.
I reported this conversation to Mr. Altman, who tasked me to advise
Bernard Nussbaum, then Counsel to the President, of the imminent press leaks. On September
29, I did so, after a meeting that both Mr. Nussbaum and I had attended to discuss the
Treasury's report on the handling of the Waco situation.
A few observations are in order. First, before Mr. Roelle's unsolicited call, I had no
prior knowledge of Madison, other than a news story that had appeared during the campaign.
Second, my task - to alert White House Counsel Nussbaum to imminent press leaks so he could
deal with them intelligently -
was entirely appropriate and necessary; the existence and
substance of the criminal referrals was leaked, and the Administration did have to deal with the
ensuing inquiries. Third, no preferential treatment or benefit was intended for anyone and, as
far as I know, no one received preferential treatment. The President and First Lady were not
the subject of any proposed governmental action; they were merely possible witnesses.
Statement of Jean Hanson
Re: Senate Resolution 229
Page 5 of 14
It has been reported that Mr. Altman does not recall tasking me to advise Mr. Nussbaum
of what the RTC professional staff believed would be imminent press leaks. In my view, the
difference between Mr. Altman's and my recollections on this point is not significant. If I had
thought it was inappropriate to brief Mr. Nussbaum, I would not have done it.
I take full
responsibility for the decision to do so. What I think is significant is that Mr. Altman and I
agree that it was entirely appropriate to brief Mr. Nussbaum about the expected leaks.
When the search was done to locate documents responsive to the Independent Counsel's
subpoena, a September 30, 1993 memorandum I prepared was found in my secretary's chron
files, as well as my own RTC files. That memorandum, addressed to Mr. Altman, had attached
to it a document confmning that the referrals had been leaked to the press and reported that I
had spoken to Mr. Nussbaum and Mr. Sloan, had briefed Secretary Bentsen, and inquired of
Mr. Altman whether there was anything else he thought we should be doing regarding these
press leaks. I do not have an independent recollection of writing this memorandum, but, I am
confident I prepared it - it bears my initials and is the kind of memorandum I write to report
back on matters I have been asked to handle. Although I have no recollection of having briefed
Secretary Bentsen as the memorandum states, I am sure my memorandum accurately reflects
that I did. The memorandum does not specify the subject of the briefing; I may have told
Secretary Bentsen of the meeting or, as is more likely, I may have alerted him to the fact that
there would be press leaks relating to the Madison criminal referrals, and the nature of the
anticipated leaks.
StatemenJ of Jean Hanson
Re: SeTUlle Resolution 229
Page 6 of 14
The October 1993 Discussions. On October 14, I attended a meeting at the White House,
arranged either by Mr. DeVore or Mr. Steiner, two senior Treasury officials, to discuss the
handling of press inquiries Mr. DeVore, then Treasury's Assistant Secretary for Public Affairs,
had received with regard to the Madison criminal referrals. The issue I recall Mr. DeVore
saying the press had raised then was whether the referrals were being held up at the RTC and
not being forwarded to the Justice Department. Implicit in the question was a suggestion of
misconduct by Treasury or White House officials.
I have no doubt that the meeting was appropriate. First, the press inquiries Treasury had
received confirmed that information about the criminal referrals had been leaked now to at least
two reporters, a significant breach of goverrunent regulations that gave Administration officials
no choice but to be prepared to respond. Indeed, I was struck, when the articles in question
appeared at the end of October and the beginning of November, by how much more the
reporters knew about these referrals than I ever did. Second, the inquiry was based on false
information that cast the Administration in an inaccurate and decidedly prejudicial light, which
the goverrunent had an obligation to correct. Again, there was no intent, and certainly I know
of no effort, to interfere in any way with the referrals which, I believe I subsequently learned,
had already been forwarded by the RTC to the Department of Justice.
The February 1994 Discussions. By mid-January, Congressional attention became focused
on upcoming deadlines under the statute of limitations for the filing of any civil claims the RTC
might bring in the Madison matter. At the time, civil claims involving Madison had to be filed
on or before February 28, 1994, unless the RTC either decided not to pursue any civil claims,
Statement of Jean Hanson
Re: Senate Resolution 229
Page 7 of 14
or obtained tolling agreements from the parties who might be the subject of a civil suit. Various
members of Congress were pressing the RTC to obtain tolling agreements if the RTC could not
complete its Madison investigation by February 28. In the face of the fast-approaching deadline,
Mr. Altman considered whether he would recuse himself from substantive decisionmaking
regarding Madison-related civil claims.
On February 1, Mr. Altman and I briefed Secretary Bentsen on the operation of the
statute of limitations in the Madison matter. In that meeting, Mr. Altman stated that he had
decided to recuse himself from any substantive decisionmaking regarding Madison civil claims,
a course I had recommended to Mr. Altman, and one in which Secretary Bentsen concurred
during our meeting. Mr. Altman stated that he wanted to meet with appropriate White House
officials to apprise them of his decision to recuse himself. I said that I would attend the meeting
with him.
To assist Mr. Altman, I prepared talking points to guide him through both the statute of
limitations and recusal issues.
Prior to leaving Treasury for the White House, out of an
abundance of caution, I also consulted with my Deputy General Counsel, who is also Treasury's
Designated Agency Ethics Officer, to see whether he had any pragmatic or other concerns
regarding the topics Mr. Altman proposed to discuss. He had none.
The meeting took place in Mr. McLarty's office, although Mr. McLarty left before the
meeting began.
In addition to Mr. Altman and me, the meeting was attended by Messrs.
Nussbaum, Ickes and Eggleston, and Ms. Williams.
including the last point -
Mr. Altman read the talking points,
that he had decided to recuse himself from any substantive
Statement of Jean Hanson
Re: Senate Resolution 229
Page 8 of 14
decisionmaking in the Madison civil matter. There was no discussion regarding the substance
of the RTC's investigation of the civil claims, and I was not capable of such a discussion, since
I had no knowledge of the substance of the RTC's investigation.
After Mr. Altman's statement on recusal, a discussion ensued. Mr. Nussbaum asked if
the matter would be decided by Ellen Kulka, the RTC General Counsel, and Jack Ryan, the
Interim Deputy CEO of the RTC, to whom Mr. Altman had referred in his discussion. Mr.
Altman responded, "Yes." Mr. Nussbaum also asked why Mr. Altman was recusing himself,
since no one appeared to believe that there was any legal or ethical requirement that he do so.
Mr. Altman indicated that I had recommended that he recuse himself. I added that Secretary
Bentsen had concurred in that judgment.
Mr. Nussbaum said that he knew Ellen Kulka, or knew of her from her prior tenure at
OTS. Mr. Nussbaum said that he was not saying that Ms. Kulka was not a good lawyer, but
that she was tough.
Mr. Altman responded by saying he had enonnous confidence in Ms.
Kulka, and that he would follow any recommendation he received from her anyway, so his
involvement was irrelevant.
Mr. Nussbaum expressed the view that even if Mr. Altman
intended to follow his staffs recommendation, Mr. Altman's presence as RTC CEO would
ensure that the RTC staff pursued any claims with thoroughness and professionalism.
Mr. Ickes expressed the view that, if Mr. Altman were going to disqualify himself, it
would be better if he did that sooner, rather than later. Ms. Williams asked whether, if the
investigation could not be completed by the end of February. that would mean that tolling
agreements would have to be signed. Mr. Altman indicated that he thought so. She also asked
Statement of Jean Hanson
Re: Senate Resolution 229
Page 9 of 14
if counsel for the private parties would be briefed; Mr. Altman indicated that he thought so, but
was not sure. The meeting ended with Mr. Altman stating that he would think about the recusal
issue overnight, and Mr. Nussbaum told him that was all they could ask.
The following
morning, Mr. Altman told me that he had decided not to recuse himself for the time being.
The White House meeting on February 2 was proper. First, the briefmg on the operation
of the statute of limitations did not impart any nonpublic information; it merely apprised the
White House of how the law operated, a briefing also given to Congressional personnel.
Second, the briefing served a legitimate governmental purpose.
By the February 2
meeting, Senator D' Amato and others were counting down the days, wondering whether the
RTC would make a decision in connection with possible Madison civil claims before the statute
of limitations expired, and what that decision would be. Mr. Altman was aware of the recusal
issue, and acted appropriately in considering whether to exercise his discretion to recuse himself
- a decision that ethics officers advised was entirely up to him and was "not mandated by ethics
statutes or regulations." When he reached a conclusion, it was entirely appropriate for him to
tell Mr. Nussbaum and other White House officials.
Third, no discussion took place regarding the substance of any civil claims. I was not
in a position to have such a discussion.
Fourth, and most importantly, Mr. Altman viewed the issue of recusal as one of process,
not substance, because, as he repeatedly said to me, to Ellen Kulka, and to others, Mr. Altman
intended to follow whatever recommendation he might receive from Ms. Kulka. I believed him
then, and I believe him now.
Statement of Jean Hanson
Re: Senate Resolution 229
Page 10 of 14
In recounting the events of February 1-2, I am aware that others' recollections differ
from my own. I do not question the good faith of anyone who has a differing recollection.
Most importantly, I think these differences in recollection are irrelevant. What matters is that
each of the events in which I was a participant pursued legitimate objectives and was
appropriate. Despite differences in recollections, no one to my knowledge intended to do, or
did, anything wrong or unethical.
The Oversight Hearings.
On February 24 of this year, this Committee held RTC
Oversight Hearings. It was the fIrst time, in about a year, that those hearings had been held,
so the scope of the topics to be covered was enormous. For over a week, often working around
the clock, a team of RTC, Oversight Board and Treasury offIcials prepared testimony, questions
and answers, and otherwise researched issues that were thought likely to arise at the hearings.
Ultimately, a substantial briefmg book was put together for Secretary Bentsen and Mr. Altman.
When the day of the hearings came, Secretary Bentsen and Mr. Altman testifIed on a panel of
witnesses, and I was seated in the row behind them, along with other Treasury and RTC
officials. The hearings went on for four-and-one-half hours, without a break.
During the hearings, I was aware of a number of responses that Mr. Altman gave that
I believed would require further elaboration. I expected and understood that, in the ordinary
course, the record would be supplemented and, if necessary, corrected, and that we would have
the opportunity to do so in a careful, professional and thoughtful way, following a review of the
transcript. But the events of the next week overtook us. A March 3 WASHINGTON POST article
discussed the September and October White House meetings I have described for you this
Statement of Jean Hanson
Re: Senate Resolution 229
Page 11 of 14
afternoon. Rather than awaiting a complete review of the transcript, piecemeal corrective efforts
began.
The next day, March 4, grand jury subpoenas were issued by Independent Counsel
Fiske. This effectively ended the normal processes that would have occurred to review and
supplement testimony.
Two questions that Mr. Altman was asked during his testimony have been the focus of
some attention. I have been asked why I did not speak up at the hearings, or have Mr. Altman
supplement his February 24 testimony. I want to address those issues directly.
At page 69 of the printed record of the Committee's hearings, the following question was
asked and answered:
"SENATOR BOND.
How was the White House notified of the
referral?
"MR. ALTMAN.
They were not notified by the RTC, to the
best of my knowledge."
When this question was posed, I realized that there had been no consideration of this
question in preparing Mr. Altman's briefmg materials and that I had not thought about the fall
events relating to the criminal referrals in many months. Although I remembered that I had
spoken with Mr. Nussbaum about the referrals, I did not have a clear recollection of the
meeting, or the events surrounding it. Listening to the question in the context of the questions
that came before and after, it appeared that it related to RTC contacts with the White House
about the criminal referrals. Moreover, Mr. Altman was asked, and answered, about the extent
of his own knowledge.
I did not know, sitting there, what he knew or recalled knowing.
SCalement of Jean Hanson
Re: Senale Resolution 229
Page 12 of 14
Without discussing the matter with Mr. Altman and others at Treasury, I did not believe that I
could suggest to Mr. Altman on the spot that he change his response.
At page 55 of the printed record of the Committee's hearings, the following question was
asked by Senator Gramm:
"Have you or any member of your staff had any communication
with the President, the First Lady, or any of their representatives,
including their legal counsel, or any member of their White House
staff, concerning Whitewater or the Madison Savings & Loan?"
Although Mr. Altman responded afflrmatively to this question, and described his discussion at
the February 2nd White House meeting about the statute of limitations, his answer did not
include a description of the recusal discussion. I believed it was appropriate to wait until we
could discuss his answer and the reasons that he had not mentioned the subject of recusal, to
decide how best to supplement the record. As I have indicated, that opportunity never arrived.
As I left the hearing on February 24, I spoke with Steven Harris, the Committee's Staff
Director and Chief Counsel. Mr. Harris told me that there were going to be follow-up questions
for Mr. Altman from the Committee. The next day, Mr. Harris emphasized that we should
expect many follow-up questions. On the following Tuesday, I was given a copy of a Reuter's
transcription of a colloquy between Senators Riegle and D' Amato, in which Senator D' Amato
set forth over a dozen questions that he wanted answered about the White House meetings
described in Mr. Altman's testimony. Senator Riegle responded to Senator D' Amato that "the
Committee record is still open," and that Senator D' Amato's questions should be submitted to
Mr. Altman so that they could be answered and included in the record.
Page 13 of 14
Statement of Jean Hanson
Re: Senate Resolution 229
Based on this and on what Mr. Harris told me the previous week, I fully expected that
we would receive written follow-up questions, which would be answered in conjunction with a
thorough review of the transcript of the testimony. There was no doubt in my mind that all of
these conversations and meetings would be disclosed and described fully to the Committee, and
every question would be answered.
However, as I stated, with the service of grand jury
subpoenas by the Independent Counsel, the normal process of reviewing and, if necessary,
correcting the record was overtaken by the many investigations that ensued.
Conclusion
As my description of the events of last fall and this past winter makes clear, each of the
conversations between White House and Treasury officials at which I was present served a
legitimate governmental purpose, and was not intended to, and in fact did not, further any
private interests or bestow any benefit on any individual. The same cannot be said for the RTC
employee, or employees, who leaked information about the criminal referrals to news reporters,
breaching the OGE's Ethical Standards and RTC regulations. No action was ever taken against
them.
I think it is important for all of us to maintain our focus. Much has been made in the
press about purported inconsistencies between some of my recollections and those of Secretary
Bentsen and Deputy Secretary Altman. I have the highest respect for both Secretary Bentsen
and Deputy Secretary Altman, and it is my honor and privilege to serve with them, and report
to them.
The fact that we have differences in recollection should come as no surprise.
Witnesses to events often have differing recollections. And, frankly, the differences here are
Statement of Jean Hanson
Re: SenaJe Resolution 229
Page 14 of 14
not important - they are not important because no one, not me, not anyone at Treasury, and
no one at the White House, attempted to interfere in the substance or processes of any criminal
referrals, or the substance or processes of any potential civil claims involving Madison. The
criminal referrals were made; the civil claims continue to be explored; and Mr. Altman recused
himself from any involvement in the Madison matter almost a half year ago, never having made,
or having been asked to make, a substantive decision.
At the outset, I indicated that I only know one way to do things - with honesty, and
consistent with legal and ethical requirements. I testified extensively before the Staff of this
Committee, and this is the seventh day I have given sworn testimony before a governmental
investigative body. I have tried to give this Committee - albeit in abbreviated form today my best recollection of what occurred, and why. I am satisfied that I have given you my best
recollection, as I have done on each prior occasion that I have testified, and the numerous
additional times I have been interviewed. I have no doubt about the propriety of my actions.
I have no reason to doubt the propriety of anyone else's actions.
I thank the Committee for the opportunity to make this Statement.
questions the Committee may have.
I welcome any
@FedFRASER