CONSIDERATION OF MISCELLANEOUS BILLS AND RESOLUTIONS H.R. 1587, House Resolution 473, and House Resolution 484 WEDNESDAY, JULY 13, 1988 HOUSE OF REPRESENTATIVES, Washington, DC. The committee met in open markup session, at 2 p.m., in room 2172, Rayburn House Office Building, Hon. Dante B. Fascell (chairman) presiding. Chairman FASCELL. The committee will please come to order. We're expecting a vote momentarily on the plant closing bill, but with our witnesses' consent, understanding and cooperation, we'll attempt to proceed anyway. We are meeting today to consider H. Res. 473, a resolution of inquiry requesting certain documents regarding humanitarian assistance provided under Public Law 100-276, and H.R. 1587, to authorize states to prohibit the export of unprocessed logs harvested from state lands. HOUSE RESOLUTION 473 The first order of business is H. Res. 473 introduced by our distinguished colleague, Representative Panetta, and where we are at this point in time is that the executive branch has responded to this inquiry and has provided the documentation which is set forth in the Resolution and that you are prepared to present a statement to the committee. We're privileged to have you here. You are one of the leaders in this Congress on a variety of matters, not the least of which are issues of grave importance in foreign policy and matters which affect the operation of this committee and the jurisdiction of the Committee. And I want to thank you in advance for what you are going to do, and what you've done in the past with regard to the 150 account in the Budget Resolution, Mr. Panetta. And it has not been an easy task, but we appreciate the difficulty of the job that you had, and the fact that you were fair and strong in your positions with respect to those issues. And on this matter, we are privileged to cooperate with you in getting the Resolution of Inquiry to the Administration. (1) If you have a prepared statement, with or without attachments and you want to put it in the record at this point, without objection, we'll do that. And you may proceed extemporaneously, or however. Mr. PANETTA. Thank you, Mr. Chairman, and I would like the text of my statement to be made part of the record. Chairman FASCELL. Well, at that point, since the bell rang before you got started and why don't we go vote on this resolution. We'll take an informal recess, come back and we'll start with your statement. [Whereupon, a brief recess was taken.] Chairman FASCELL. Somebody help us back there. Shut the doors and let's get started before the bells ring again. Thank you, very much. Mr. Panetta, we're delighted to reconvene now to hear your statement. Mr. PANETTA. Thank you, again, Mr. Chairman and members of the Committee. Thank you for taking the time to have this hearing on House Resolution Chairman FASCELL. Would you hold up just a second and let's get everybody settled down. I was having a hard time hearing you. Okay, will you take seats over there or quit talking or do something else. Mr. Panetta. Mr. PANETTA. Thank you, Mr. Chairman and members of the committee, for having this hearing on House Resolution 473, which is the Resolution of Inquiry that I introduced on June 15, 1988, with 146 of our colleagues, to provide for a full accounting of the $47.9 million in humanitarian aid that is being provided to Central America. I want to take this opportunity first, Mr. Chairman, to thank the staff of the committee itself, and particularly George Ingram, along with the representatives of the various agencies that have a monitoring responsibility, the IG at AID, the Government Accounting Office, Price Waterhouse representatives, as well as the representatives of the Agency for International Development that has a primary administrative power over the program, and the staff of the other committees that are involved here, Intelligence and Appropriations, for all the assistance they've provided in terms of looking at the information and documentation regarding this program. Let me state at the outset, Mr. Chairman, that I'm not here to debate the issue of present or future policy in Central America. My sole purpose is to present to the committee the findings that I have received pursuant to the Resolution of Inquiry. My goal is to insure that regardless of one's position on the aid issue, and I supported the aid package, that funds that were provided were used for the purposes that were specified in the law and that they are accounted for. Let me say and add for the record, at least at this point, that obviously I regret, as I'm sure many of you do, the events in Nica ragua over the last few days. It's certainly not helpful in terms of the effort to find a peaceful resolution of that conflict. But I'm sure that there will be a great deal of opportunity to debate future policy changes in that area. My understanding right now is that a joint resolution is being worked on on a bipartisan basis to condemn what has occurred. I intend to limit my remarks to the Resolution of Inquiry and the findings that I have made pursuant to that resolution. The Resolution of Inquiry is a legitimate tool for a member of Congress to use to obtain information and documentation as to the administration of any Federal program. It really fulfills our responsibility to the taxpayers to insure that the funds are properly spent and spent pursuant to the law. Let me state at the beginning that AID and the other agencies have provided all of the documentation available to them to meet the requests in the Resolution of Inquiry and therefore it will be my recommendation that the committee adversely report the Resolution and move to table it on the floor. Let me, however, summarize my findings for purposes of the Committee. The principal provisions of the program were the following: $17.7 million humanitarian assistance, basically involving food, clothing, shelter, medical supplies and services or the payment for said supplies and services; $1.5 million of that for communications equipment; $2.1 million for assistance to the Indian resistance; $17.7 million in relief for children, the victims of that warfare; $10 million to the verification commission, and $1.5 million to AID for administrative purposes. What has been spent up to this point is the following: $6.8 million of the humanitarian aid has been spent, approximately $385,000 on communications equipment. $1.5 million has been spent with regards to the children's program, and $3.2 million on the verification commission. So that a total of about 22 percent has been spent, $11.9 million of the $47.9 million. Let me discuss each of the areas, if I might. On humanitarian assistance, which is $17.7 million, this involves several areas. The first is DOD supply shipments. These are the shipments provided from the Quartermaster Depot for supplies involving shelter, boots, various clothing supplies, medical supplies. These supplies have been provided in shipments to Honduras. The supplies are counted and randomly verified as nonlethal by AID's inspector general, the GAO and Price Waterhouse as they arrive in Honduras. However, I would like to point out one problem area which is that we have not had these shipments in effect accompanied by bills of lading, so that the audits cannot be matched against any DOD documentation. Price Waterhouse pointed this out on at least two occasions. This has led Price Waterhouse to conclude that there could possibly be discrepancies between the shipments and what actually arrives. As discussed with these agencies, I think this area can be easily corrected if the count is matched against a bill of lading or documentation at the DOD Quartermaster Depot. On communications equipment, again the law provides for the purchase of 1.5 million in communications equipment. To date, about 25 percent of that amount has in fact been spent. All three oversight agencies, GAO, Price Waterhouse, and AID's IG have reviewed documentation confirming these expenditures. The cash for food program. The so-called Cash for Food Program was implemented by AID to provide money for food for the Contras inside Nicaragua. The plan was announced on May 13th, 1988, following consultation with the leadership of the Congress. The plan provides for cordobas to be provided equivalent to approximately one dollar per day per Contra, and they are delivered into Nicara gua. The purpose of this approach was to overcome the obstacles created by the failure of the peace negotiations to resolve how assistance would be provided to those in Nicaragua. While the aid package did not specifically provide for such a cash for food program, it was determined by legal opinions by AID as well as the U.S. Department of Justice, that the phrase in the law, "payment for such items or services," provides for such cash payments. In addition, it was felt that by limiting both the amount of funding provided and the type of currency used, that that would insure that the funds are in fact used for basic sustenance. To date, about $700,000 has been spent on this program. Although the amounts of cash provided to the individuals are small, it should be pointed out that all of the agencies involved admit that it is difficult to in fact verify that this cash is actually being received and spent for food. Price Waterhouse stated this in both an April and May memo to AID, that "Public Law 100-276 does not appear to specifically authorize cash payments to soldiers since the law only authorizes payments for food, clothing, shelter, medical supplies, and payment for such service items or services." And GAO admits that it is difficult to monitor fully the cash for food program, and AID's General Counsel notes a similar problem in terms of the ability to really provide for full accountability with regard to these payments. It is clear that the difficulties here again have arisen not because of AID's procedures or the accounting efforts that have been made, but the breakdown in the negotiations that made accountability for any kind of direct humanitarian aid virtually impossible. While the limited amount of payment and the use of cordobas may provide for some controls on cash payments, there is again no way to verify fully the end use of these funds. And hopefully, AID working in cooperation with the other monitoring agencies can develop better methods to confirm that these funds are being received and spent for the purpose intended. A family assistance program is another area involving cash payments. These family assistance payments are provided monthly to senior Contra military members and specialists living in Costa Rica, Honduras and Miami. The payments range from $25 a month to $2,750 per month. Price Waterhouse again noted that in the use of these payments, the Commander and Chief of the Contra Military, Enrique Bermudez, provides a list of authorized recipients including payment amounts, including his own. There exists no formal set of criteria for designating or removing beneficiaries. |