Date: 1981-05-06
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. the time has come to call a halt to the vendetta against the National Consumer Cooperative Bank and its officers. Since early February there has been a behindthescenes effort to harass. hinder. and destroy the bank with or without congressional sanction. The center of the activity has been the Office of Management and Budget. So loose has the talk become that yesterday an official of 0MB accused the president of the bank of a -heist." according to a New York Times newsstory. A heist Is defined as armed robbery carrying with It the suggestion of violence. The official at 0MB uttered this charge knowing It was false and that Its utterance was calculated to defame the president of the bank and to damage the reputation of the corporation. Perhaps such loose talk could be ignored If It were not for the fact that 0MB. operating outside Its legal authority. has attempted to dictate the operations of the bank and has done everything possible to withhold funds lawfully appropriated to the bank and which lawfully belong to the institution. Unfortunately. much of the pressnot allhas Ignored the Consumer Cooperative Bank and took an Interest and provided news space only after the administration decided to hold a briefing and press conference to give Its version of the handling of the fundIng. Little has been printed about earlier developments despite a steady stream of information coming forth from congressional sources. including hearings with administration witnesses. the General Accounting Office. the Consumer Cooperative Bank and the private shareholders. .Suddenly the bank became a reality when the administration decided to hold a briefing. Thus. the first news many had about the bank was when 0MB referred to It being engaged in a heist. While I will not use such extreme language. I do question and have questioned the legal authority used by OMB In Its actions regarding the Consumer Cooperative Bank. The Comptroller General also questions the legal authority. Private attorneys. likewise. have raised the most serious questions about the manner in which 0MB has proceeded. The Banking. Finance and Urban Affairs Committee has tried through many channels since early February to learn the legal authority for what now can only be described as a singleminded vendetta. To this date. we do not have a definitive answer from the administration. On February 13. shortly after David Stockman was given the keys to his office. officials of the National Consuimer Cooperative Bank were summoned to the Executive Office Buildig and Instructed to use the funds of the bank "solely for the purpose of winding dawn the affairs of the corporation." What authority does 0MB and Its staff have to operate the National Consumer Cooperative Bank and to Issue instructions to the officers and board of this mixed ownership corporation? The Congress had not authorized any change in the act extablishing the powers of the bank nor had the administration sent any request to Capitol Hill asking for modification of the charter. Yet 0MB on Its own seized the authority to supersede Public Law 95351 and to become president. board. and staff for the bank on February 13. As we were to learn weeks later. 0MB followed these operating instructions with an order to impound the funds of the bank. Documents were signed on February 19 and 25 by 0MB officials stopping some $90 million that the Congress has previously appropriated for the bank. No rescission message. no notice to the Congress. no notice to the press. A secretly signed document impounding funds. To this date we know not the legal authority for OMBs actions. On March 5 we finally succeeded in having David Stockmqn appear before the committee to talk about impoundments and budget cuts. At that time he was shown the two documents freezing or impounding the funds. He Indicated he did not have knowledge of what had happened but promised to get back to the committee with the details about the status of the funds. To this date. we have not received a reply to those specific questions raised In the hearing. Mr. Stockman. however. after being shown the Impoundment documents did state to a member of the committee. Mr. BARNEY FRANx. that he would check out the facts and then added: And let me indicate to you that If you are correct in your description of this case (the impoundment of the funds on February 19 and 25) It will never happen again. because I Intend to use rescission and deferral in the way Indicated In the Budget Act and only that *.0 Mr. Speaker. we have copies ofl those February impoundment documents in the files of the committee and there Is no question that the Impoundments were made on those datesweeks before the required rescission messages were sent to Congress. On February 23 some 26 members of the committee wrote the President urging that the bank not be terminated. and raising a series of questions about the withholding of funds and specifically the legal authority for such actions. We did receive in time a polite reply restating the administrations opposition to the bank but providing few answers concerning legal authority for the actions of 0MB. On March 6following Mr. Stockmans appearance before the committeeI wrote him again trying to establish a rational approach to the OMBs tangled approaches to the Bank. Mr. Speaker. I place in the RECORD copies of this correspondence: