THE BNL AFFAIR: PROGRESS DESPITE OBSTRUCTION
Henry B. Gonzalez, (TX-20)
(House of Representatives - September 09, 1992)


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The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Texas [Mr. Gonzalez] is recognized for 60 minutes.

Mr. GONZALEZ. Mr. Speaker, since I last reported to the House, I am very happy to say that there has been continued and sustained progress in the investigation of how the administration supported Saddam Hussein right up to the time that he and Iraq invaded Kuwait and how Iraq and other countries, incidentally, used the Banca Nazionale del Lavoro and its Atlanta branch or agency known as BNL, and I will refer to it as BNL, to finance Iraq's extensive purchases of military technology and food in this country.

The administration clearly knew that Iraq was operating a clandestine procurement program in this country, and despite that knowledge, allowed Iraq's machinations to go on, because the policy was to entice Saddam Hussein into being a good friend and a solid citizen of the world. Just how misguided their indulgent policy was is made clear now by the many occasions in the past year when the United Nations has had to resort to threats of force to make Saddam Hussein comply with his own agreement to allow inspections and the elimination of his ability to produce weapons of mass destruction.

Mr. Speaker, let me say that we should not single-mindedly dwell on the fact that it was Iraq, because the main thing is our leadership in our country, both on the executive as well as the congressional level, have been like the old Bourbon kings, learn nothing and forget nothing, and so the use that Iraq was able to make of the vulnerability of our regulatory protective structure of our banking and financial system in our country has also enabled other countries and other vast international financial entities to keep on, even as I speak today, taking advantage of this vulnerability to the great peril of the stability and the well-being of our financial institution in the United States, and I think that is a dirty shame.

Since I last reported, the United States again has a new military presence in Iraq patrolling the skies over southern Iraq to protect, they say, the Shiites who live there and have been subject to attacks by the regime of Saddam Hussein.

Let it be remembered that at all other times our forces have been involved in the north protecting the Kurds, erstwhile, from Saddam Hussein; this time, however, there is no U.N. policy to legitimize the patrols.

In short, the stumbling Iraq policy has led us, as I feared it would from its very inception in 1990, in August, not January 1991, entangled in the most ancient of ethnic, religious, social, political quarrels of that whole area, not to mention the political quarrels between Iraq, its neighbors, and the quarrels of those neighbors with each other. But that entanglement is another story.

Today I want to talk about the progress of the committee's investigation into the BNL affair. This is my main and my fundamental purpose, has been, is now, and will continue to be, and that from the standpoint of the Committee on Banking, Finance and Urban Affairs of the House of Representatives.

I will repeat what I said at the very outset today: I am very happy, and I am pleased, with the progress we have made despite the continued interference and harassment from the highest levels of the administration, and regrettably, my friends of the House minority sector and its leadership.

During the August recess, pursuant to a resolution approved by the committee on August 6, I have signed and issued 26 new subpoenas for documents. Several thousand new documents have been collected with many more expected. The committee is organizing and evaluating this mass of new information, as we have had all through the years.

The administration, of course, is slow in producing the information that it has been asked to produce, and is experimenting with ways to avoid compliance with the subpoenas without falling in contempt.

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This is in keeping with their longstanding policy of obstruction and harassment. But let me say to the Attorney General, to the National Security Adviser, and to all the various political operators in the White House and executive agencies, I am not going to be either intimidated or deterred. It will be `damn the torpedoes, full speed ahead.' The committee will develop the evidence, we will learn the facts, and we will report those facts.

The administration has, since spring of this year, found it convenient to claim that I have somehow violated national security.

You know, I have come to the conclusion that nowadays and for some time now the last refuge of a scoundrel or scoundrels is national security.

This enables them to claim that the committee must not be entrusted with classified documents. But this is an old dodge, that started long before the committee had ever reviewed a single classified document. At the very beginning of the committee investigation, over 2 years ago, the then Attorney General, Richard Thornburgh, wrote to claim that the BNL case was, `a sensitive case with national security concerns.' This was September 26, 1990. And he went on to claim after specifically ordering that I not have a hearing on BNL, that the committee's effort to interview witnesses and conduct hearings `significantly diminishes the Department's ability to successfully prosecute this matter.' A few days later the FBI Director chimed in, saying that the committee's efforts would have a `likely negative impact on this (the BNL) investigation.' However, to his credit, Director Sessions did not raise the specter of national security.

The committee considered those objections, and the bipartisan decision was to go ahead with the investigation. Consequently, on October 23, 1990, the committee approved its first BNL subpoenas by a voice vote, with the necessary number of `live' and `present,' under the rules, members of the committee being present.

The point is, however, that the administration started raising the curtain of secrecy and the bugaboo of national security from the first day of the committee's investigation. In the 2 years since, the obstruction has become steadily greater, and the harassment more noisy, with each new step toward a full disclosure of what happened, and why, and with each new step toward the evidence that would force policy changes that would prevent another such abuse of our country's taxpayers and banking resources.

Let me tell you categorically right now these abuses are continuing even now as we are meeting here today, to the tune of nearly a trillion dollars, and most of it involved in such things as the illegal laundering of drug money. How long, my colleagues, how long--political election year or not--are we to wait before we sink our country's financial and banking institutional safety and stability?

Mr. Speaker, in April, a low-level Treasury political appointee was instructed to write a letter complaining that the committee had compromised a secret document--in this case, notes of a National Security Council meeting. Nothing in that document was sensitive, but it was embarrassing stuff to the administration and therefore classified as secret. A month later, the new Attorney General for in the meantime the old one--Thornburgh, had been defeated in a Senate campaign. This new one claimed that the committee could no longer be entrusted to receive classified information. After that, no agency would allow the committee to review or even discuss classified material.

Mr. Speaker, I have a message for the Attorney General: I am determined, as one Member of Congress, to cleanse and purify this grossly corrupted Justice Department in power. In other words, I want to debar the Justice Department. I asked the Attorney General what secrets had been compromised, and got a response from one of his minions, not he but one of his minions, `Oh, the inquiry was beside the point. How dare you ask?' Clearly, no vital secret had, or ever had been, disclosed. In fact, the administration merely wanted to reserve the complete right to decide what might be disclosed and how or when.

What the declassification process, as used by the administration, does is to allow the administration to produce sanitized versions of so-called classified documents on a slow, very slow basis or not at all.

One investigator from another committee who had worked on another aspect of this case noted how hard it had been to get a declassified version of records made available for publication. The process took almost a year, according to him, almost a whole year.

The kind of stalling tactic this investigator encountered is what is called in the trade, a slow roll. That is, you get cooperation, but it is so slow that the facts emerge long after the issue at stake has lost public significance. In another case, involving yet another committee, also working on the Iraq mystery not so mysterious a puzzle, my colleague the Honorable Sam Gejdenson repeatedly has complained that many documents are needlessly classified--in other words, the claim of national security is used to keep embarrassing information from being published. I know that this is true. The iron curtain of secrecy is thrown up in order to create an obstacle course for anyone who wants information that the administration finds inconvenient to release, or embarrassing to discuss.

As a matter of fact, my colleagues, we have reached in America, an America that is supposed to be an open society and an open government, the incredible point where this administration, at the rate of 7,107,017 documents a year are being classified. As a matter of fact, by way of parentheses, the so-called Free Trade Agreement was classified until last night, I believe. Why? What national security is involved there?

Now, add 7,107,017 documents classified each year by this administration, that means they are classifying at a rate of over 19,000 documents a day.

What is the difference between our government now, and incidentally, I am not going to exempt Congress. I do not know when they slipped through some resolution creating this rule where our documents are secret or secure and need release. That is absolutely the most tragic, the most serious abandonment of our Republic's constitutional structure in the history of our Republic since the inception of the Constitution.

How long, my colleagues, do you think yours and our peoples that we are supposed to represent liberties are safe if this continues untrammeled and unrestrained?

Let me tell you, we are doomed. I do not have to be a prophet to know that, and you know it, too, if you give it some careful thought.

The Director of the CIA now claims that I have compromised information classified as top secret.

Now, we invited him, and by golly, for the first time in history, the Director of the CIA comes to the Banking Committee.

He asked that I meet with him before the hearing so we could get the parameters and I did meet with him. We had a very nice session. There was not even an indirect innuendo that I had placed anything in the Record that was contrary to the proper safeguards of national security, even before the committee. It was an historical occasion. It was the only time that a Director had appeared.

Well, let me tell you, the committee has never had its hands, much less I or the staff, on any classified, much less top secret documents. In fact, the committee has never had its hands on any kind of material that is classified secret, much less top secret.

First, we said at the very outset in 1990 when we issued the first subpoenas, we know what we are seeking and we have every right under our constitutional grant of power under rule X and XI of the House rules of investigation for us to proceed on this basis.

We do not have the type of security set up or facility or physical structure needed to handle such material if we were to subpoena it. So we never have.

Furthermore, anyone who even reads top secret material and takes notes must have those notes reviewed before leaving the premises over there. The notes themselves are then classified, and if the notes include anything rated top secret cannot even be taken from the premises in the form of notes.

In short, if a committee investigator saw top secret material and took notes, anything rated top secret in those notes could not be taken from the premises where they are stored, since the committee does not have--I repeat--the necessary facilities for their safekeeping.

If the Director of the CIA or any other agency has a complaint, it is obvious that his own staff failed to properly classify notes, or negligence on his part, but not certainly our staff because we have never had access to that material and we do not need to.

In any event, the tired and limp old club of national security is being waved about as a means to deny the Banking Committee access to information that it needs for this investigation, and here are my leadership and members of the minority introducing a resolution to try to get me on the basis of some possible maybe rule violation, and all I can say to my distinguished colleagues on the minority, come on, beware. That resolution is tainted.

Do you know what happened to two out of the four principal cosponsors of that resolution with the minority leader? They just got whipped in their own Republican primaries. So beware of signing on to these resolutions against me, my boys. I am telling you, they are spooked. Do not fool around with them.

Anyway, the claims started about this offense toward national security before we had any documents of any kind, secret or otherwise, confidential or not, before we had conducted a single hearing, and they continue to this day.

Now, that is over 2 years ago, claims that to investigate at all ruins national security, claims that a hearing has or will ruin some vital project, claims that this or that document cannot be found or must have every word in it censored, or claims that the administration is cooperating, but must keep vital secrets and, of course, the final club is to accuse someone of violating security. That, I repeat, has come to be the last refuge of a scoundrel nowadays.

All these asserted and assorted scare tactics have been employed against me. The administration demands that declassification procedures be respected, but reserve the right to declassify documents slowly or censored them so completely that they are useless, or not to declassify them at all.

Now, if there is anything in which I take great pride, and particularly as chairman of a committee, as I always did as chairman of a subcommittee, is to know the rules, know the extent of the granted powers within our jurisdiction and constitutional grant of authority, know the limitations to a fine point as well as the powers.

I have at no time ever been disrespectful of any of the rules of limitation of our powers. I think that was proved when we had the first ill-fated so-called Assassination Committee, which was a real issue with me at the time.

Now, I will give you an example. On July 30, I asked the CIA Director to declassify two documents. There has been no reply, none whatsoever. How long should it take to declassify a four-page letter or a 1990 study of Iraq's financial debt problem? This kind of delay and nonresponse is simply part of the general pattern of obstruction.

But now the administration has risen to new heights of investiveness. They are not content merely to classify or censor or refuse to act on declassification requests. Now they have tired to deposit subpoenaed documents, not with the Banking Committee, but with the House Select Committee on Intelligence, with the minority leader, with the Speaker of the House, a committee with respect to the select committee that never asked for them, has no interest in them or needs them not. This is an unprecedented effort to evade a congressional subpoena.

To his everlasting credit and competence, I salute Speaker Foley, who rightly and to his credit refused to be drawn into this latest political ploy by the Attorney General and his band of desperadoes.

In a letter to Attorney General Barr, the Speaker noted that the Parliamentarian of the House `knows of no precedent' for Barr's request that he, the Speaker, control access by a committee to its own subpoenaed documents and that he had `no authority to impose the conditions the administration seeks.' The Speaker correctly said:

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It is not appropriate for either the Intelligence Committee or me as Speaker to unilaterally interpose ourselves between the Banking Committee and the Administration with respect to what constitutes effective compliance with the Committee's subpoenas.

In other words, the Attorney General should find someone or something else to use as his latest barricade against the committee's efforts to obtain all the facts. I offer for the Record the correspondence from which I have quoted, and to which the Speaker referred, and I ask that it be printed at the conclusion of these remarks today, plus other correspondence.

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Of course, the Attorney General is not the only one out there erecting a stone wall around the facts. The Federal Reserve made persistent efforts, urged on and advised by the Justice Department, to avoid and evade subpoenas throughout 1990. I am glad to say that all but one Federal Reserve document has finally been received, and that one is a State banking exam on a BNL facility that the State of Illinois sued to protect--our great, sovereign State of Illinois. As my colleagues know, BNL has an agency in Illinois. It has not only Atlanta, but Illinois, and one in California, and it did have one in Florida.

The Treasury Department has delivered many documents, refused to deliver some, censored many, and fought frequently over what should and should not be censored. Numerous meetings, calls and letters were required before the committee was allowed access to a set of notes involving the National Security Council--a Treasury document that the White House claimed belonged to the National Security Council, not the Treasury employee who produced and owned it. Almost a year of effort went into obtaining access to that single document.

The Export Import Bank did not raise a very high stonewall--it only took them 2 months to produce documents the committee requested. By contrast, the State Department has been alternately cooperating and stalling, producing just enough information to be able to claim cooperation, but always holding back as much as possible.

The pattern of obstruction and resistance has stiffened considerably this year. This is an election year. In the past the National Security Council, through the Rostow gang--now to this gang we have the captain general heading this conspiracy. The Attorney General is a captain general now heading the Rostow gang in a complicit, intended, premeditated and coldly calculated effort to thwart the Congress and prevent the Congress from discharging its constitutional obligations, and duties and responsibilities.

Now in the past, as I have said, the National Security Council merely tried to regulate the flow of information to the Congress by creating numerous and even more elaborate barricades. But beginning in May, under the guidance of the Justice Department, every agency that owns or can buy a secret stamp, and, gee, I almost feel sorry for them and feel like ordering some to send them to them and advise that I know what they are going to stamp, and, I guess, before long maybe their office supply list will be stamped secret--and so they have refused to provide any information that they claim is secret.

The White House also likes to have its political appointees claim that documents that are in no way classified or otherwise sensitive must be held back because they involve records of deliberative proceedings, quote unquote, and it brings back that statistic I gave. This same White House is now classifying 7,117,017 documents a year, over 19,000 a day. My colleagues know that has to be the end result of this policy.

What is it? Who is it being kept from? The Russian Communists? Well, that is gone. It is the American people. It always has been. The American people are the last to know what the facts are when the CIA has been in charge of some of these highly, later disclosed and publicized activities. I was reading about them in the French press, the Spanish press of Europe, the German press, the British press and even the Japanese. But all the American people? No.

Oh, incidentally, my colleagues, every single document I put in the Record from February on, which is the date that all of this machination started, every one of them has been public matter somewhere in this world, publicly in newspapers, magazines and other publications. So that ought to give my colleagues an indication of where we have been.

The White House claimed that, if we see notes taken at meetings, executive agencies in the future will not freely debate public policy questions for fear of being embarrassed at some future time. Some of these agencies' staffers, they might be embarrassed if for some reason or another their name gets involved in these discussions.

Now this particular ploy is a variation of that old executive privilege myth, which is a name given by the constitutional expert, Mr. Raoul Berger, in a book entitled: `Executive Privilege, A Constitutional Myth'--making a claim that falls just short of invoking privilege, and finally, after much discussion and agony, agreeing that well, yes, the documents reflecting the minutes of meetings can be seen, but any notes about the documents must delete as many names as possible. What this particular ploy does is tie up investigators in months of wrangling about details, much like diplomats arguing over the shape of the meeting table, and of course there is the pending litigation, quote unquote, game.

Now I set that straight with Attorney General Thornburgh who was interposing that as a reason for demanding not having a hearing on BNL. I say to the gentleman, `Sir, I'm going to refer you to Supreme Court decision after Supreme Court decision in which court after court has said the Congress' right to know is paramount even though there may be simultaneous hearings somewhere else, investigations somewhere else, or even judicial, civil or criminal proceedings somewhere else. I would never embarrass either myself, first of all, or the committee. I know those rules, and I know those decisions, and, as I said earlier, I know full well the extent of the proper constitutional and other rule-granted powers' rules as a committee, as a chairman, and also the limitations, and I will exert the powers to the limit, and I will be respectful of the limitations in every single minute of deliberations.'

So, we go to this executive privilege myth making a claim that falls short of invoking privilege, but finally, after all, saying, `Here it is. You can have it all, but don't mention names,' and of course there is the pending litigation.

From the beginning, I have been told by the Justice Department that investigating the BNL affair would ruin investigative efforts. Yet the Justice Department delayed any BNL indictments until after Iraq invaded Kuwait, over a year, at which time it was politically impossible to delay any longer. No one has ever been able to explain this year-long delay. Moreover, when the committee, after weeks of haggling, gained access to a horde of Customs documents related to this case, investigators found that nobody from Justice had ever reviewed, much less made investigative use of the documents.

That is our Justice Department.

That is why I say, `Mr. Attorney General Barr, we must de-Barr you to cleanse and purify the Justice Department. You have produced your oath of office repeatedly and on a sustained, persistent course of conduct such as to violate the sacred oath you took to uphold the Constitution of the United States.'

That is the only oath we take; Congressman, military officials, Justice Department, Attorney General and the like.

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The Justice Department's claims about the sanctity of its investigations are simply phony. Its investigation has been slow, its lead attorney has gotten worried and interfering calls from the White House, State Department, and dedicated, career law enforcement investigators suspect sabotage from their own Justice Department. They may be right. It is after all one thing to nail a little bank manager down in Atlanta--but it is all too embarrassing for the Justice Department to unravel the clandestine Iraqi procurement network--which after all operated with the knowledge of our Government, as we have discovered from records I have previously discussed here in the House.

In any event, I want to advise my colleagues that the stonemasons down at the Justice Department have been busy erecting new and ever more elaborate walls around the BNL scandal, to keep the evidence from coming out. The Attorney General is protecting something, but it sure isn't national security. He is protecting the administration's political hide.

But despite the obstruction, despite the harassment and despite all else, my committee's investigation is making progress. We have new documents, and we have good sources.

The last time I spoke, right after the CIA Director and then his Acting Director said, `Oh, you have violated this when you made a speech,' then I put in the Record some documents from German intelligence sources. Now, where is the national security involved there?

Of course, the facts will come out, and what they will confirm is this: first, the administration decided to support Saddam Hussein against Iran during their terrible war of attrition;

Second, when the Iran-Iraq War ended, the support went on, even exchange of intelligence, which lasted until the summer of 1990, right on the eve of the invasion of Kuwait.

It is unbelievable. My colleagues, oh, for how long, what will it take?

Third, as I have previously shown and proved beyond the shadow of doubt, the administration decided to tolerate Iraq's secret procurement network, operating here and in other countries. This included deliberately allowing shipments of technology into known Iraqi nuclear weapons development facilities.

Let me tell you where they have compromised the national security, even today. The Iraqis, in fact in a milder form than other countries continue to do, were able to, and I put this one case in the Record, where Iraq invested and had a certain percentage of ownership of an American manufacturing plant that had a contract with the U.S. Army to produce the 155-millimeter casing.

They were able as owners of that to get the blueprint through the diplomatic pouch of Iraq to send it back to Iraq, where they produced the 155-millimeter shell casings, which I am sure a lot of them were shot at our soldiers in the gulf war.

That is still going on. And who knows, only the Lord almighty in heaven, how many other foreign governments through this type of technique are still in there having access to our own technology and manufacturing that our administration claims is highly secure and technologically not exportable.

Fourth, the administration allowed Saddam Hussein to think we would not oppose his aims at a time he was making the most dire kinds of threats against Kuwait.

Let me enlarge on that. We are doing the same thing even now with other countries. For instance, I reported to my colleagues here less than 2 months after the end of the so-called Persian Gulf war that Syria had just obtained 300 newly improved Scud missiles through North Korea. But Assad, the leader of Syria, is a big buddy. Why? Because President Bush met with him in Switzerland in November, because Assad was the only Arab and Syria was the only Arabic nation that sided with Iran, a non-Arabic country, against Iraq.

So here is an enemy of what is going to be our opponent, so we are going to embrace each other, as he did in Switzerland.

Now, the same claim Syria now makes, even though now they put them in effect and they now have that northern tier of Lebanon which Syria has never given up a claim to since the French occupied the darn place,

any more than the Iraqis for 100 years have stopped claiming Kuwait as a proper part of their country or their sovereignty or their entity.

Do you mean our diplomats did not know that Saddam Hussein persisted in putting forth the longstanding claims of the proper area of the Iraqi sovereignty? Well, I do not know. After hearing some of the top liberal guys from the State Department , I will tell you, I think my answer would be yes, they probably did not.

Fifth, when it all blew up and Kuwait was invaded, the administration reversed course, Saddam Hussein henceforth became an enemy against mankind, and we went into a war that was needless because it was preventable. The result is that to this day we are keeping U.S. military personnel on the line, and subject to being drawn into yet another war, and the whole area has degenerated into a much greater destabilized area than ever before our expeditionary force.

There is that possibility, with us patrolling the air in southern Iraq under dubious circumstances and at who knows what potential result.

Finally, when I started unraveling the facts about this flawed policy of unprincipled and undirected, tragic miscalculation and misunderstanding, the administration immediately started its ever bigger and ever more elaborate campaign to stop the truth from coming out. But the truth is not the enemy--the enemy is failure to understand and learn from what happened. The enemy is a policy that leaves us and our financial system open to just the kind of exploitation that Saddam Hussein used, to finance his campaign to build missiles and nuclear and chemical weapons. The financial system remains open and vulnerable, just as our economy has been mismanaged to the point where the dollar daily declines and is on the point of being debauched. I have been speaking on that since 1979 at the Bonn economic summit meeting in May 1979.

All of those on the minority side that claim that oh, I am partisan, it was not a Republican President; it was Mr. Carter.

I reported then, because in their pronunciamento at the end, a very short one, was the acceptance in principle of the EMS, the European Monetary System, and the ECO, the European Currency Unit.

I have been trying to warn about that. In fact, just 2 weeks ago I tried to get a release. I drafted a letter and addressed it to the President in good will saying Mr. President, you have got to exert some leadership, because the dollar, it is obviously already falling, and is getting into a free fall.

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It is replaced, and this has been my livid fear for over 3 years. I have discussed it with the chairman of the Federal Reserve Board, with several of the big international bankers that I happened to be meeting with. They all told me the same thing, and I keep saying and I have been speaking for the record and nobody will pay any attention. In fact, that release and that letter, nobody picked it up or printed it, except one, somebody, I do not know if it was Knight-Ridder or maybe Reuters picked up a little item. And there was a Japanese banker in New York who called and wanted to know if he could get a copy of the speech in which I referred to it.

I said, no, it was not a speech. It was a news release and a letter. So we sent it to him.

My colleagues think they do not know what the score is. Of course. But they are looking out for their national interests. So are the British. So are the French. So are the Germans. And if the Germans can continue to let us be the one to foot the bill for their so-called merger, not so much a reunification, of course, they are. I do not blame them. I blame us, our leadership, our own Congress, our own executive branch for being treated like Uncle Saps, with the consequences that are about to beset us.

God forbid, I pray I am as wrong as I can be, but up to now the developing facts show that is not the case.

The administration does not want the truth to be known about either one of these tragic messes, and it does not have the conviction and the leadership and the responsibility. And I do not know about the challengers either. I am not involved in that process.

But somewhere, my colleagues, the American people have got to get the leadership that our Constitution promises them, to rise to this occasion and despite whatever unfortunate sad news they must give the electorate, force the leadership to defend this Nation at one of its most perilous junctures.

If the truth is known, the administration, or whoever replaces them, will have to take corrective action. And we must pursue sound policies, not bankrupt policies, obviously bankrupt. Years of voodoo economics and years of unprincipled vacillation and fractious and partisan wheeling and dealing have brought us to the point of ruin, my colleagues.

I want to assure the House that as evidence is collated, evaluated and concluded, I will report it to my colleagues, as I pledged to you on this House floor the first day we were in session in this Congress in 1989, when I was elected chairman of the committee.

There will be obstruction, and the desperate little villains of the Justice Department will continue the harassment, but despite all of that, the truth will emerge. Madam Speaker, I include for the Record the following correspondence:

House of Representatives,
Washington, DC, September 2, 1992.

Hon. William P. Barr,
The Attorney General,
Department of Justice,
Washington, DC.

Dear Mr. Attorney General: In an August 28 letter, Mr. Lee Rawls, the Assistant Attorney General for Legislative Affairs, has written to inform me that copies of certain classified documents responsive to subpoenas issued by the Committee on Banking, Finance and Urban Affairs are to be delivered or made available to the Permanent Select Committee on Intelligence. He further indicates that the Administration intends to continue to provide classified documents requested by the Banking Committee to the Intelligence Committee and asks that I, as Speaker, act to control access to such documents subject to security criteria set forth in his letter.

The Parliamentarian informs me that he knows of no precedent for the issuance of such a directive by the Speaker. Neither committee has requested this arrangement, nor was it the subject of any agreement between the Administration and me.

After careful consideration of Mr. Rawl's letter, and further consultation with the Parliamentarian, I have determined that I have no authority to impose the conditions the Administration seeks. I therefore suggest that the Administration discuss with the Banking Committee the manner in which it will comply with these subpoenas. It is my view that it is not appropriate for either the Intelligence Committee or me as Speaker to unilaterally interpose ourselves between the Banking Committee and the Administration with respect to what constitutes effective compliance with that Committee's subpoenas.

With high personal regard, I am,

Sincerely,

Thomas S. Foley,
The Speaker.

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U.S. DEPARTMENT OF JUSTICE,

Office of Legislative Affairs,
Washington, DC, August 28, 1992.

Hon. Henry B. Gonzalez,
Chairman, Committee on Banking, Finance, and Urban Affairs, House of Representatives, Washington, DC.

Dear Mr. Chairman: Transmitted herewith are unclassified documents numbered 0000001-0004143 responsive to the request set forth in the Committee's subpoena dated August 11, 1992, related to the production of documents.

As set forth in the Department's letters to the Committee of August 18, August 26, and August 28, 1992, copies of which are attached, Mr. Dennis Kane and Ms. Debra Carr of the Committee staff, acting on behalf of the Committee, have reached certain agreements with the Department concerning, among other things, the scope of the Department's search and the Department's production of responsive documents. Those agreements are incorporated by reference herein.

Consistent with the Committee's agreement that the Department's search for responsive documents extend only to files that the Department has reason to believe might contain responsive material, searches for responsive material have been conducted by the Department at offices of Maine Justice in Washington, D.C. and the U.S. Attorney's Office in Washington, D.C.; searches for responsive material have also been conducted by the U.S. Attorney's Offices in Miami, Florida; Atlanta, Georgia; Newark, New Jersey; Cleveland, Ohio; Philadelphia, Pennsylvania; Pittsburgh, Pennsylvania; and Dallas, Texas.

A large number of the documents that the Department is transmitting to the Committee relate to companies that the Committee has indicated are associated with Messrs. Gerald Bull and Carlos Cardoen. By submitting documents related to those companies, the Department is not affirming that the associations alleged by the Committee are correct. Furthermore, for your information, certain documents that the Department is providing to the Committee originated with other federal departments or agencies and were obtained by the Department at various dates subsequent to their creation. The transmitted documents numbered
0004137-0004143 contained in box 2 have been designated `Limited Official Use' materials by the Department of State.

The Department is withholding one document obtained from files maintained by the U.S. Attorney's Office for the Northern District of Georgia that may be responsive. The document in question constitutes confidential grand jury information that is protected from disclosure by Rule 6(e) of the Federal Rules of Criminal Procedure. We are unable, therefore, to provide a copy of this document to the Committee.

In accordance with my letter of today's date to you on behalf of the Administration, and consistent with the letter that the Attorney General sent to you on behalf of the Administration on May 15, 1992, the Department is transmitting responsive classified documents to the House Permanent Select Committee on Intelligence.

Subject to the above-referenced agreements between the Department and the Committee on Banking, Finance, and Urban Affairs, submission of this letter with the accompanying documents and the transmittal of responsive classified documents to the House Permanent Select Committee on Intelligence constitute compliance with the request for information set forth in the August 11, 1992 subpoena, through and including August 28, 1992.

If you have any questions, please do not hesitate to contact me at 514-2141 or Faith Burton, Acting Deputy Assistant Attorney General, at 514-1653.

Sincerely,

W. Lee Rawls,
Assistant Attorney General.

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U.S. DEPARTMENT OF JUSTICE,

Office of Legislative Affairs,
Washington, DC, August 28, 1992.

Hon. Dave McCurdy,
Chairman, Permanent Select Committee on Intelligence, House of Representatives, Washington, DC

[Page: H8186]

Dear Mr. Chairman: In accordance with my letter of today's date to you on behalf of the Administration, I am transmitting herewith copies of the classified documents listed in the attached schedule. The documents are in the custody of the Department of Justice, and are responsive to the request set forth in subpoena dated August 11, 1992, as amended, served on the Department by the House Committee on Banking, Finance and Urban Affairs, relating to the production of documents.

We are following this procedure on the understanding that the House Permanent Select Committee will act as the custodian of the enclosed classified documents, and that the Speaker of the House of Representatives will control access to the documents to ensure that they are disclosed only to persons who provide specific assurances that they will accord the documents security protection consistent with that afforded such documents within the executive branch, that is, protection from unauthorized disclosure, with access provided only to persons with appropriate security clearances and a need to know the classified information contained therein.

If you have any questions, please do not hesitate to contact me at 514-2141 or Faith Burton, Acting Deputy Assistant Attorney General, at 514-1653.

Sincerely,

W. Lee Rawls,
Assistant Attorney General.

U.S. DEPARTMENT OF JUSTICE,

Office of Legislative Affairs,
Washington, DC, August 28, 1992.

Hon. Henry B. Gonzalez,
Chairman, Committee on Banking, Finance, and Urban Affairs, House of Representatives, Washington, DC.

Dear Mr. Chairman: This letter concerns the requests for information set forth in the subpoenas that the Committee recently served on a number of departments and agencies. Although we understand that an issue has been raised within the Congress as to whether the subpoenas were issued pursuant to procedures that conformed to the House Rules and that the subpoenas may be of doubtful validity, the Administration nevertheless intends, within the parameters outlined below, to respond to the requests for information set forth in the subpoenas.

To the extent consistent with its constitutional and statutory responsibilities, the Administration will provide you with copies of unclassified, responsive documents including, when practicable in light of applicable personnel and time limitations, documents that the Administration is able to declassify.

Those documents that remain classified are subject to the binding restrictions set forth in the executive order on national security information, which precludes departments and agencies from disseminating classified information `outside the executive branch except under conditions that ensure that the information will be given protection equivalent to that afforded within the executive branch.' E.O. 12356, Section 4.1(c), 47 Fed. Reg. 14874, 14881 (1982).

By letter dated May 15, 1992, the Attorney General informed you on behalf of the Administration that `in light in your recent disclosures [of classified information], the executive branch will not provide any more classified information to you until specific assurances are received from you that classified information provided to you and the Committee will receive the same security protection provided by the executive branch, that is, protection from unauthorized disclosure, with access provided
only to persons with appropriate security clearances.' To date, we have not received such assurances.

Consistent with the Administration's constitutional and statutory responsibilities and the Attorney General's letter dated May 15, 1992 to the Speaker of the House of Representatives, until such time as you provide the executive branch with specific assurances that classified information will remain protected, the Administration intends to respond to subpoenas and other requests for information from you or the Committee that call for the production of classified documents by delivering or, in appropriate circumstances, making such materials available to the House Permanent Select Committee on Intelligence. We are following these procedures on the understanding that the House Permanent Select Committee on Intelligence will act as the custodian of the classified documents in question, and that the speaker will control access to the documents to ensure that they are disclosed only to persons who provide specific assurances that they will accord the documents security protection consistent with that afforded such documents within the executive branch, that is, protection from unauthorized disclosure, with access provided only to persons with appropriate security clearances.

Enclosed are copies of the Attorney General's letter to the Speaker dated May 15, 1992, and my letters of today's date to the Speaker and the Chairman of the House Permanent Select Committee on Intelligence.

Sincerely,

W. Lee Rawls,
Assistant Attorney General.

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U.S. DEPARTMENT OF JUSTICE,

Office of Legislative Affairs,
Washington, DC, August 28, 1992.

Hon. Thomas S. Foley,
Speaker of the House of Representatives, Washington, DC.

Dear Mr. Speaker: Pursuant to the Attorney General's letter to you dated May 15, 1992, I am writing on behalf of the Administration to advise you that the Administration will be delivering or, consistent with established security procedures, making available to the House Permanent Select Committee on Intelligence copies of classified documents that are responsive to the requests for information set forth in the subpoenas that were recently served on a number of departments and agencies by the House Committee on Banking, Finance and Urban Affairs.

As you know, the Administration is compelled to respond in this manner because of Chairman Gonzalez's disclosures of classified information on the floor of the House of Representatives and in the Congressional Record. The executive order on national security information precludes us from disseminating classified information `outside the executive branch except under conditions that ensure that the information will be given protection equivalent to that afforded within the executive branch.' E.O. 12356, Section 4.1(c), 47 Fed. Reg. 14874, 14881 (1982). Because we have not received specific assurances from Chairman Gonzalez that classified information provided to him and the Committee will receive such security protection, the Administration is following the procedure set forth in the Attorney General's letter to you of May 15, 1992.

Consistent with the Administration's constitutional and statutory responsibilities, until such time as Chairman Gonzalez provides the executive branch with specific assurances that classified information will remain protected, the Administration intends to respond to subpoenas and other requests for information from Chairman Gonzalez of the Committee that call for the production of classified documents by delivering or, in appropriate circumstances, making such documents available to the House Permanent Select Committee on Intelligence. We are following this procedure on the understanding that the House Permanent Select Committee on Intelligence will act as the custodian of the classified documents in question, and that you will control access to the documents to ensure that they are disclosed only to persons who provide specific assurances that they will accord the documents security protection consistent with that afforded such documents within the executive branch, that is, protection from unauthorized disclosure, with access provided only to persons with appropriate security clearances and a need to know the classified information contained therein.

Of course, we remain committed to providing the Congress with the information it needs to perform its legislative responsibilities, and we stand ready to work with you and Chairman Gonzalez to resolve this matter in a mutually satisfactory and responsible manner.

Sincerely,

W. Lee Rawls,
Assistant Attorney General.

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U.S. DEPARTMENT OF JUSTICE,

Office of Legislative Affairs,
Washington, DC, August 28, 1992.

Hon. Dave McCurdy,
Chairman, Permanent Select Committee on Intelligence, House of Representatives, Washington, DC.

Dear Mr. Chairman: I am writing on behalf of the Administration to advise you that the Administration will be delivering or, consistent with established security procedures, making available to the House Permanent Select Committee on Intelligence copies of classified documents that are responsive to the requests for information set forth in the subpoenas that were recently served on a number of departments and agencies by the House Committee on Banking, Finance and Urban Affairs.

The Administration is compelled to respond in this manner because of Chairman Gonzalez' disclosures of Representatives and in the Congressional Record. The executive order on national security information precludes us from disseminating classified information `outside the executive branch except under conditions that ensure that the information will be given protection equivalent to that afforded within the executive branch.' E.O. 12356, Section 4.1(c), 47 Fed. Reg. 14874, 14881 (1982). On May 15, 1992, the Attorney General wrote to Chairman Gonzalez to advise him that the Administration would not provide him or the Committee on Banking, Finance and Urban Affairs with any more classified information until specific assurances are received from the Chairman that classified information provided to him and the Committee will receive such security protection. Because we have not received such assurances from Chairman Gonzalez, the Administration is following the procedure set forth in the Attorney General's May 15, 1992 letter to the Speaker of the House of Representatives.

Consistent with the Administration's constitutional and statutory responsibilities, until such time as Chairman Gonzalez provides the executive branch with specific assurances that classified information will remain protected, the Administration intends to respond to subpoenas and other requests for information from Chairman Gonzalez or the Committee that call for the production of classified documents by delivering or, in appropriate circumstances, making such documents available to the House Permanent Select Committee on Intelligence. We are following this procedure on the understanding that the House Permanent Select Committee on Intelligence will act as the custodian of the classified documents in question, and that the Speaker will control access to the documents to ensure that they are disclosed only to persons who provide specific assurances that they will accord the documents security protection consistent with that afforded such documents within the executive branch, that is, protection from unauthorized disclosure, with access provided only to persons with appropriate security clearances and a need to know the classified information contained therein.

Enclosed are copies of the Attorney General's letters of May 15, 1992 and my letters of today's date to Chairman Gonzalez and the Speaker.

Sincerely,

W. Lee Rawls,
Assistant Attorney General.

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Office of the Attorney General,
Washington, DC, May 15, 1992.

Hon. Thomas S. Foley,
Speaker of the House of Representatives, Washington, DC.

[Page: H8187]

Dear Mr. Speaker: As you are aware, the executive branch has been providing significant quantities of classified documents to Chairman Gonzalez. We would like to continue to respond positively to his requests. However, his recent disclosures of classified information on the floor of the House of Representatives and in the Congressional Record have raised serious concerns.

Public disclosure of classified information harms the national security. United States government departments and agencies are precluded by executive order from disseminating classified information `outside the executive branch except under conditions that ensure that the information will be given protection equivalent to that afforded within the executive branch.' (E.O. 12356, Section 4.1(c), 47 Fed. Reg. 14874, 14881 (1982).) Therefore, in light of Chairman Gonzalez's recent disclosures, the executive branch will not provide classified information to him until we receive specific assurances from him that classified information provided to him and the Committee will receive the same security protection provided by the executive branch, that is, protection from unauthorized disclosure, with access provided only to persons with appropriate security clearances and a need to know the classified information.

Nevertheless, we remain committed to providing the Congress the information it needs to perform its legislative responsibilities. Failing specific assurances from Chairman Gonzalez, the Administration is prepared to make available appropriate documents, both those requested by the Committee and others which might be relevant to the subject being reviewed, to you or to members or committees of jurisdiction that you might designate. We view this matter seriously, as we know you do. We take equally seriously our responsibility to work with you to resolve this matter in a mutually satisfactory manner.

Sincerely,

William P. Barr,
Attorney General.

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COMMITTEE ON BANKING, FINANCE,

and Urban Affairs,
Washington, DC, July 30, 1992.

Mr. Robert Gates,
Director, Central Intelligence Agency, Washington, DC.

Dear Mr. Gates: The Committee on Banking, Finance and Urban Affairs has been investigating the Atlanta branch of the Italian government-owned Banca Nazionale del Lavoro (BNL) and its unauthorized loans to the government of Iraq of more than $4 billion. The Committee has in its possession a copy of the following documents:

1. A seven page memorandum entitled `Iraq: No End in Sight to Debt Burden' dated April 12, 1990; and

2. A four page letter from Mr. Stanley M. Moskowitz, Director of Congressional Affairs, to me dated November 12, 1991.

The Committee believes that it is important that the American people be informed of the contents of these documents.

The Committee respectfully requests that the Agency furnish the Committee with declassified copies of these documents.

The Committee appreciates your cooperation in ensuring that the classification review is completed and furnished to the Committee by Thursday, August 6, 1992. If you have any questions, please contact Ms. Debra Carr or Mr. Dennis Kane of the Committee staff at 225-4247.

Sincerely,

Henry B. Gonzalez,
Chairman.

END