As expected, the House approved the Bankruptcy Reform legislation and sent it to President Bush, who has stated that he will sign it promptly. The amendments will go into effect in six months.
This previous post sets forth my reservations about this legislation, so they will not be restated here, except to point out that this is special interest-driven legislation that modifies an underappreciated bankruptcy system that contributes much to the strength of the American economic system. The “fresh start” of a bankruptcy discharge encourages entrepreneurs to take risk and create businesses and jobs, and gives individuals hope that they can rebound from a financial disaster to rebuild wealth for their families. Accordingly, making that remedy more expensive and more restrictive to individuals is not a step in the right direction.

The shoe dropped today for a couple of Houston-based businessmen in regard to the criminal investigation into the allegedly corrupt administration of the United Nation’s Oil for Food program.
Following this earlier post from last December, this New York Times article reports that David B. Chalmers, Jr. — a Houston resident who owns Bayoil, Inc., a Bahamian company — was arrested today along with two other oil traders under a Southern District of New York indictment that alleges that they paid millions of dollars in secret kickbacks to Saddam Hussein’s Iraqi regime and, in so doing, cheated the United Nations’ oil-for-food program of humanitarian aid funds. Ludmil Dionissiev, a Bulgarian citizen and permanent U.S. resident, was also arrested today at his Houston home in connection with the indictment, and the U.S. Attorney in New York is seeking the the extradition from England of a third defendant, John Irving.
Under the indictment, the government accused the defendants of paying millions of dollars in kickbacks so that Mr. Chalmers’ oil companies could continue to sell Iraqi oil under the oil-for-food program. The kickbacks between mid-2000 and March 2003 involved over $100 million in funds that allegedly otherwise would have been earmarked for humanitarian relief. Another criminal complaint unsealed on Thursday in New York charged South Korean citizen Tongsun Park with conspiracy to act in the U.S. as an unregistered government agent for the Iraqi government’s effort to create the oil-for-food program.
The U.N. program, which the U.S. originally endorsed, began in 1996 and permitted Iraq to sell oil despite a stiff U.N. economic embargo against Saddam’s regime. Under the program, the proceeds of the oil sales were to be used to buy food and medicine for Iraqi people suffering under the sanctions. The indictment alleges that “the government of Iraq alone had the power to select the companies and individuals who received the rights to purchase Iraqi oil,” and, beginning in 2000, the government demanded that distribution of oil be conditioned upon the recipients’ willingness to pay kickbacks.
The investigation of Mr. Chalmers and others in regard to the Oil for Food scandal has been ongoing for some time, and the connections between the individuals allegedly involved are certainly intriguing, as this Laurie Mylroie Financial Times article reports.