Full-Year Continuing Appropriations Act, 2011
Floor Speech
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Mr. STEARNS. Thank you, Mr. Chairman, and I yield myself such time as I may consume.
My amendment, my colleagues, is simply to say that the United Nations is a very valuable building and the renovations that are occurring right now are necessary, but--
Now, the renovations that are occurring on the U.N. ultimately are necessary, but the cost that is occurring is not. There's a huge overrun.
I want to be clear that the opposition I have with this amendment is not to obstruct the U.N. from making a safe environment for the workers and the visitors that come there but to encourage reform and use best business practices considering that the taxpayers are funding about a quarter of the amount of money they're spending for renovations.
You know, we had a hearing here in Congress looking at what it would cost to build and renovate the United Nations. And they presented a figure. Well, Donald Trump, who's built a lot of hotels, a lot of apartment houses, came in and he said, ``I could do the same thing for half the money.'' That was half the money back when he offered that. So he said using better business practices, he could do it for a lot less money.
So I believe my colleagues that the U.N. has had a history of wasting money.
Let me give you one example.
In 2003, in the Secretary General's bulletin, he banned all smoking in the U.N. Well, the U.N. spent $130,000 on a ventilation system to accommodate smokers in the cafeteria. Well, I'm not clear why they did that.
The architect was starting to get into so many problems, they terminated him. By so doing, they paid him $44 million after the termination.
So these are the kinds of things that I am worrying about, and I think the
U.N. auditors have expressed the same concern that I have in the whole process of procurement and contract management on the U.N. renovations and building construction programs.
The GAO expressed their concern regarding the U.N.'s weakness in existing internal oversight and procurement.
So all I'm asking simply is in this time of a weak economy, we should hold off continuing to renovate the U.N. until we practice best business practices and we make sure that they're not continuing to have overruns.
I reserve the balance of my time.
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Mr. STEARNS. Let me just mention a little thing more about my amendment.
Basically, as I've told my colleagues, this is a cost overrun on renovations in the U.N., and more importantly, with this huge economic downturn that we've had, I think we need to go back and look at the procurement process at the U.N.
I want to say something that's different from the U.N. amendment. I had an amendment, 429, dealing with Fannie Mae and Freddie Mac. This amendment was ruled out of order, and it was because the amendment basically did not specify the individuals whose defense by the United States taxpayers has been supported, would be stopped payment by my amendment 429.
To put it into perspective, the amendment I had was saying that people like Franklin Raines, who was the CEO of Fannie Mae, and these other executives, while they were hiding huge amounts of debt, were collecting huge bonuses, including the board of directors of Fannie Mae and Freddie Mac; and at the same time, the inspector general found that these people were hiding this debt, and now taxpayers have to pay for their defense and bail them out. But the ironic thing and the tragic thing is that taxpayers have to pay the lawyers to defend all these people that actually were hiding the debt and looting these companies.
So my amendment is basically saying that taxpayers should stop paying the legal fees for these executives that were hiding the debt and acted illegally. But understanding that this is out of order, I'm not going to offer this amendment. I will look for another opportunity to make my case.
Mr. Chairman, I yield back the balance of my time.
My amendment would prohibit funds from the United States from being used for the design, renovation, or construction of any headquarters of the United Nations located in the United States.
The U.N. headquarters will undergo renovations, as planned, with an estimated cost of more than double the original amount expected. The renovations are necessary, but the cost to do so is not. I want to be clear that my opposition is not to obstruct the U.N. from making a safe environment for their workers and visitors, but to encourage reform through better business practices--considering taxpayers are responsible for 22% of the U.N.'s budget.
Time after time, we have asked American families to tighten their belts and exercise fiscal restraint. Why should they do with less and not the U.N.? It is time that this Congress lead by example. Our constituents deserve more than the perceived normal rhetoric of ``Do as we say, not as we do.''
Congress held a full-scale hearing to determine if the U.N. estimates in fact reflected the lowest cost option. According to Donald Trump's testimony at the U.S. Senate hearing, the costs associated with the renovations would be overwhelmingly more than the U.N.'s estimate. Trump who has experience in these matters, testified he could complete the project for $700 million. That's nearly half the amount than the U.N. projected they needed. The U.N. has a proven history of wasting hard-earned taxpayer's dollars and I am certainly not surprised to expect anything less from the U.N. when discussing the expenditures spent for their headquarters. The architect, that was later terminated, was given $44 million. To me, this does not reflect the lowest cost option. Furthermore, the U.N. spent $130,000 on a ventilation system to accommodate smokers in the cafeteria. Why would you spend so much to ventilate smoke in a cafeteria despite a 2003 Secretary General's Bulletin banning smoking in the U.N.? What's even more alarming is that even the U.N.'s own auditors had concerns regarding the possible inaccuracy of the project's estimated calculations and weaknesses in procurement and contract management. Moreover, in 2006 the GAO expressed their concerns regarding the U.N.'s weaknesses in existing internal oversight and procurement. It seems to me that this issue deserves more attention than the hearing conducted 5 years ago.
Without proper planning and oversight, I fear that these funds would just be wasted. More hearings and further investigations need to be conducted before irresponsibly spending funds from this bill. With my amendment, the U.N. will be prohibited from continuing this gross disregard of hard-earned taxpayer dollars. Due to these reasons, I urge my colleagues to support my amendment.
It is my understanding that the Appropriations Committee never intended for any of the funds included in the continuing resolution be used for legal expenses defending Fannie Mae and Freddie Mac's former senior executives. My amendment is a certainty in an uncertain world. An assurance to our constituents that this gross abuse of taxpayer funds ends today.
The amendment I offer would prohibit funds made available by this act to be used for the payment of attorneys' fees or other legal expenses of any former senior executive officer of the Federal National Mortgage Corporation or Federal Home Loan Mortgage Corporation.
In response to the greatest financial crisis since the Great Depression, America hastily engaged, with my strong opposition, in a strategy of multiple bailouts to avoid the complete collapse of our financial system. We now know, as I believed then, that this strategy was no cure to our financial crisis and would leave taxpayers exposed to vast financial risk.
When the Government took over Freddie Mac and Fannie Mae in September 2008, taxpayers unknowingly inherited $160 million in defending the failed firms. Of the $160 million in taxpayer dollars spent, $24.2 million was spent in defense of Fannie Mae's top senior executives. According to an in-depth report from the Office of Federal Housing Enterprise Oversight, these Fannie Mae executives were accused of taking action to manipulate profits, generating $115 million in improper bonuses. Two years before this report was published, Fannie was found to have overstated its preceding six years of past earnings by $6.3 billion.
Currently, employment contracts protect executives when sued and the company pays for legal defense. Some believe there should be no government liability to these legal fees because of the executives' breach of responsibility to the company and its stockholders. I agree responsible Americans should not have to pay for the irresponsibility of others and that is why I offered this amendment.
As you may recall, the 1,900 page legislation placing these GSEs under conservatorship failed to address a resolution to these entities, allowing the Federal Housing and Finance Agency (FHFA) to continue paying the legal fees of their executives. Poor crafted legislation is the reason this injustice has been allowed to carry on. When asked why funding of legal defense has not been cut off, the acting director of the FHFA, said: ``I understand the frustration regarding the advancement of certain legal fees associated with ongoing litigation involving Fannie Mae and certain former employees. It is my responsibility to follow applicable Federal and State law.''
I am outraged that billions of dollars have gone to benefit an indiscriminate number of private financial institutions that utilized reckless investment strategies. American's deserve more than for us to just ``understand'' their frustration; our responsibility to the taxpayers is much more than that. We must be diligent in ensuring the investigation of these issue's are a top priority for the 112th Congress. The time has come to make sure that we are doing everything we can to minimize any further taxpayer exposure to the irresponsible behavior of these companies.
The nationalization of private assets was clearly un-American and, as free-enterprising Americans, we needed to let our markets determine the winners and the losers. Unfortunately, the winners were not the American taxpayers of this country and, after billions spent and much debate, we are left with unanswered questions and unpaid legal fees showing no sign of ending.
This financial crisis affects every hardworking, taxpaying American. We should not be paying for the legal defense of the people whose reckless actions forced this economic crisis on us. I hope that members of this 112th Congress recognize the dire importance of this issue and vote in favor for the American taxpayer.
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