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Alabama MIKE HUFFINGTON, California MICHAEL CASTLE. Robert Bostick 44 Moussavi, Kaveh, response to "The Moussavi File" (with attachments) 196 The Economist: "Mexico— Fighting the machine," November 6, 1993 146 "Mexico— Respect Restored," February 13, 1993 147 "The Moussavi File," Report by the Attorney General's Office of Mexico 162 Vizcarra, Alberto, Permanent Forum of Rural Producers of Sonora, written statement 125 White, Christine, written statement, with enclosure re The VALMAREST Association 136 (IID ABUSES WITHIN THE MEXICAN POLITICAL, REGULATORY, AND JUDICIAL SYSTEMS AND IMPLICATIONS FOR THE NORTH AMERICAN FREE TRADE AGREEMENT [NAFTA] MONDAY, NOVEMBER 8, 1993 House of Representatives, Committee on Banking, Finance and Urban Affairs, Washington, DC. Present: Chairman Gonzalez, Representatives Watt, Klink, Leach, Roth, Thomas, and Johnson. It was a little quicker than we had anticipated, but we want to say at the outset that this was the first committee to have any kind of formal hearings on so-called NAFTA, beginning with the first one before there had been any referrals by the executive branch, but after we had received the five volumes, four of them telephone directory size which I brought to the hearing room at the hearing before last. The first hear- ing was held on September 8, and the second was on September 28, and this one is a continuation and also the third hearing on NAFTA.

Vermont (II) CONTENTS Page Hearing held on: November 8, 1993 1 Appendix: November 8, 1993 39 WITNESSES Monday, November 8, 1993 Argueta, Alex, Developer from Tucson, AZ 13 Duncan, Lucia, Coordinator, American Investors in Mexico 15 Moussavi, Kaveh, IBM's former Political Agent in Mexico 7 Vogel, Sarah, Commissioner, Department of Agriculture, State of North Dakota 4 APPENDIX Prepared statements: Gonzalez, Hon. Henry B.: Religious Services — Annex I — Mexico 43 Department of the Treasury, list of names of individuals who participated in the NAFTA meetings 53 U. Department of Justice press release dated August 20, 1993, with information on United States of America v. The Chair wishes to thank the witnesses that accepted our invitation.

One of the great questions is: Is this something that effec- tuates free trade or is it something that is designed to buy votes here in Washington, not to lower trade barriers in Mexico? Block, which stopped unconstitutional farm foreclosures by the Farmers Home Agency in the 1980's, and she has served now, she is in her second term as North Dakota's agriculture commissioner. We deeply appreciate your presence here and your cooperation. IBM Corp., knew perfectly well that I had been approached for a bribe. They knew that — they had identified officers of SENEAM, the relevant organization who had, to say the least, a shady past and experience in this particular matter. Life insurance does not bring back life I have found. The Department has informed us that these individuals were not just consulted, but were allowed to review drafts of the agreement while the negotiations were in progress. Robert Bostick, I am concerned about the possibility that one or more of these individuals and their firms may have sought to profit on the confidential information they received.

It carries some of the costs that the chairman has indicated have to be paid for through taxes. She was lead counsel on the national class action Coleman v. Gonzalez, sir, the particular significance of the IBM experience is that the way in which the Grovemment of Mexico were able to bludgeon a billion company to at the very, very least, based on the documentary evidence, at the very, very least to attempt to be economic with the truth. The letter identifies over 100 private sector firms and their representatives which were consulted on the financial services part of the agreement.

DOOLEY, California RON KLINK, Pennsylvania ERIC FINGERHUT, Ohio JAMES A. In the first place, the highest financial officer in Mexico has indi- cated that if NAFTA is not agreed to that the detrimental impact will be fleeting and certainly not profound or lasting. Let me say on behalf of the committee what I said at the outset, we are very grateful to you. You have been of extreme help to this committee to say the least, and I believe to the interested Congressmen, we will be circulating a draft summary of the net substance of what we have gained in these series of hearings by this committee to the rest of our col- leagues in the House of Representatives.

I can't think of a more sorrier excuse for Congress' consideration of this agreement than that argument. Roth's questions, I do have a position paper that I would like to have introduced into the record. Absolutely, without objection it will be intro- duced in the record at this point or following Mr. I believe he was the one that asked you, so I want to thank you. Moussavi, why, we had a su Dpoena even last week, but I wanted to thank you also, Ms. 38 If you didn't get any immediate questions, there will be some submitted in writing following this hearing, and hopefully you will receive those questions by the time you get a copy of the transcript of today's proceedings for your review and correction and so fortn, but in the meanwhile please know how grateful we are to you.

American investors and businesspersons must be fully aware, then if they wish to either out of greed or heedless disregard, at least this committee is on record as making an honest, forthright attempt to present the facts as they should be.

And so I think it is very important that we realize that today's hearing is to bring out the atmosphere and environ- ment in which all tnese institutions, particularly banking, will be working in the environment of laws and regulations, judicial sys- tems, and the like, so we will examine the nature and the scope of the system which universally is accepted as being corrupt.

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I am here today to talk about what I deem to be a serious abuse of the GSM-102 Export Credit Guarantee Program in Mexico. The GSM-102 Program is one of our major export programs. Please, can you come and nelp us iaentify the crooks who are try- ing to destroy the image of our country and so on? The same two companies who have been the re- peated targets of accusations of incompetence in a system that, if I may just quote the head, the presidents of the Pilots Association of Mexico, Juan Humberto Cruz Albert, who has said the new equipment that the Mexican Government has bought from Thom- son and Alenia is no more compatible than the old system. When representatives from the administration recently testified on NAFTA before the Committee, they would not even acknowledge these dangers or any other risks to American businesses. I am going to summarize my written testimony because it is awfully long, and I wouldn't want to burden the committee with that level of detail, so I will try to hit the high points today. Did you or have you had any other dealings in Mexico? When I say I genuinely mean, when I say I was sitting at home on the afternoon of February 3 thinking that the Mexican Embassy is going to call me and say thank you very much for helping us. American investors and businesspersons must be made fully aware of the pervasive abuses in Mexico's institutions, lest they end up broke or, worse, in jail. STATEMENT OF SARAH VOGEL, COMMISSIONER, DEPARTMENT OF AGRICULTURE, STATE OF NORTH DAKOTA Ms. Thank you very much, Chairman Gonzalez and other members of the committee. Yes, sir, I have had other experiences in Mexico, but the signifi- cant point about this is that I never believed that the government of Carlos Salinas, just when it is negotiating NAFTA, just when it has such a high international profile, just when it is doing its ut- most to sell itself as a reform government, would behave in this way toward the suggestion that there was corruption. This is very relevant and important to the consideration of the agreement. But as more and more opportunity rises to look into this, for instance, at what time has any spokesman from the President on down or any of the other ex-Secretaries of State and the like reported that the article 101 of NAFTA links it irretrievably to the Uruguay GATT round and inclusive thereof of article 24 of the General Agreement on Trade and Tariffs. Wyoming SAM JOHNSON, Texas DEBORAH PRYCE, Ohio JOHN LINDER. (1) In other words, it isn't a question of trying to inform and educate our citizens, and without which understanding those of us sup- posedly representing them would be working against a backdrop of ignorance, and therefore very definite misunderstanding as we go into the future.

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