U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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69–011 2008

110th Congress, 2d Session – – – – – – – – – – – – – House Document 110–88 

88—VETO MESSAGE ON H.R. 1585 

MESSAGE 

FROM

THE PRESIDENT OF THE UNITED STATES 

TRANSMITTING

NOTIFICATION OF THE VETO OF H.R. 1585, THE ‘‘NATIONAL 

DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2008’’ 

JANUARY 16, 2008.—Message and accompanying papers referred to the 

Committee on Armed Services and ordered to be printed 


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MEMORANDUM OF DISAPPROVAL

I am withholding my approval of H.R. 1585, the ‘‘National Defense Authorization Act for Fiscal Year 2008,’’ because it would imperil billions of dollars of Iraqi assets at a crucial juncture in that 

nation’s reconstruction efforts and because it would undermine the 

foreign policy and commercial interests of the United States. 

The economic security and successful reconstruction of Iraq have 

been top priorities of the United States. Section 1083 of H.R. 1585 

threatens those key objectives. Immediately upon enactment, section 1083 would risk the freezing of substantial Iraqi assets in the 

United States—including those of the Development Fund for Iraq 

(DFI), the Central Bank of Iraq (CBI), and commercial entities in 

the United States in which Iraq has an interest. Section 1083 also 

would expose Iraq to new liability of at least several billion dollars 

by undoing judgments favorable to Iraq, by foreclosing available defenses on which Iraq is relying in pending litigation, and by creating a new Federal cause of action backed by the prospect of punitive damages to support claims that may previously have been foreclosed. This new liability, in turn, will only increase the potential 

for immediate entanglement of Iraqi assets in the United States. 

The aggregate financial impact of these provisions on Iraq would 

be devastating. 

While my Administration objected to an earlier version of this 

provision in previous communications about the bill, its full impact 

on Iraq and on our relationship with Iraq has become apparent 

only in recent days. Members of my Administration are working 

with Members of Congress to fix this flawed provision as soon as 

possible after the Congress returns. 

Section 1083 would establish unprecedented legal burdens on the 

allocation of Iraq’s funds to where they are most needed. Since the 

fall of Saddam Hussein, I have issued Executive Orders to shield 

from entanglement in lawsuits the assets of the DFI and the CBI. 

I have taken these steps both to uphold international legal obligations of the United States and to remove obstacles to the orderly 

reconstruction of Iraq. Section 1083 potentially would place these 

crucial protections of Iraq’s core assets in immediate peril, by including a provision that might be misconstrued to supersede the 

protections I have put in place and to permit the judicial attachment of these funds. Iraq must not have its crucial reconstruction 

funds on judicial hold while lawyers argue and courts decide such 

legal assertions. 

Moreover, section 1083 would permit plaintiffs to obtain liens on 

certain Iraqi property simply by filing a notice of pending action. 

Liens under section 1083 would be automatic upon filing a notice 

of a pending claim in a judicial district where Iraq’s property is located, and they would reach property up to the amount of the judgment plaintiffs choose to demand in their complaints. Such preVerDate Aug 31 2005 04:18 Jan 18, 2008 Jkt 069011 PO 00000 Frm 00003 Fmt 6633 Sfmt 6633 E:\HR\OC\HD088.XXX HD088

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judgment liens, entered before claims are tested and cases are 

heard, are extraordinary and have never previously been available 

in suits in U.S. courts against foreign sovereigns. If permitted to 

become law, even for a short time, section 1083’s attachment and 

lien provisions would impose grave—indeed, intolerable—consequences on Iraq. 

Section 1083 also includes provisions that would expose Iraq to 

increased liability in lawsuits. Contrary to international legal 

norms and for the first time in U.S. history, a foreign sovereign 

would be liable for punitive damages under section 1083. Section 

1083 removes defenses common for defendants in the United 

States—including res judicata, collateral estoppel, and statutes of 

limitation—upon which the Iraqi government has relied. And sec- tion 1083 would attempt to revive a $959 million judgment against 

the new democratic Government of Iraq based on the misdeeds of 

the Saddam Hussein regime. 

Exposing Iraq to such significant financial burdens would weaken the close partnership between the United States and Iraq during this critical period in Iraq’s history. If Iraq’s assets are frozen, 

even temporarily, that could reduce confidence in the Iraqi dinar 

and undermine the success of Iraq’s monetary policy. By potentially 

forcing a close U.S. ally to withdraw significant funds from the U.S. 

financial system, section 1083 would cast doubt on whether the 

United States remains a safe place to invest and to hold financial 

assets. Iraqi entities would be deterred from engaging in commercial partnerships with U.S. businesses for fear of entangling assets 

in lawsuits. Section 1083 would be viewed with alarm by the international community and would invite reciprocal action against 

United States assets abroad. 

The adjournment of the Congress has prevented my return of 

H.R. 1585 within the meaning of Article I, section 7, clause 2 of the 

Constitution. Accordingly, my withholding of approval from the bill 

precludes its becoming law. The Pocket Veto Case, 279 U.S. 655 

(1929). In addition to withholding my signature and thereby invoking my constitutional power to ‘‘pocket veto’’ bills during an adjournment of the Congress, I am also sending H.R. 1585 to the 

Clerk of the House of Representatives, along with this memorandum setting forth my objections, to avoid unnecessary litigation 

about the non-enactment of the bill that results from my withholding approval and to leave no doubt that the bill is being vetoed. 


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This legislation contains important authorities for the Department of Defense, including authority to provide certain additional 

pay and bonuses to servicemembers. Although I continue to have 

serious objections to other provisions of this bill, including section 

1079 relating to intelligence matters, I urge the Congress to address the flaw in section 1083 as quickly as possible so I may sign 

into law the National Defense Authorization Act for Fiscal Year 

2008, as modified. I also urge the Congress to ensure that any provisions affecting servicemember pay and bonuses, as well as provisions extending expiring authorities, are retroactive to January 1, 

2008. 

GEORGE W. BUSH. 

THE WHITE HOUSE, December 28, 2007. 

Æ 


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