5 August 2001

Washington, D.C. - 1 September 2001 - Addressing reporters about the need to cover the $51 billion debt accumulated after the distribution of federal income tax rebate checks this summer, President Bush announced today the first piece of a new White House loan program. Noting the "other, unspoken Federal surplus - the valuables held in trust for the American people," Mr. Bush informed the nation that he has sent Vice President Dick Cheney to pawn the Hope Diamond at Kozlowski's Pawn Shop and Jewelry Exchange, located in the Adams Morgan section of Washington, D.C.

The President said that the Hope Diamond pawn agreement would result in a short-term loan to the White House of $500 million, which he dubbed "a good deal, big time" for such a priceless national treasure. The money would be crucial for financing the Federal Government until the tax revenues for the next fiscal year kick-in on 1 October 2001 - and the President expects to cover the remaining $50.5 billion debt gap using similar means. Responding to questions, Mr. Bush reiterated that since "stuff like the Hope Diamond are the possessions of the American people, I think it is only appropriate that they be used to help cover the American people's debts."

Larry Small, Secretary of the Smithsonian Institution, did not appear with Mr. Bush to make the announcement. Reached by phone at his office in the Smithsonian's Castle building on the National Mall, the Secretary conceded that this loan program of precious objects was a bit unusual, but that "it represents accurately the central importance of the Smithsonian as a repository for the nation's treasures," and that as with any treasure one must occasionally "put up or shut up" to prove its value as an investment worth holding. The President, he said, immediately seized upon the creativity and possibility involved in creating such a program.

"The whole thing started when I got a call from Senator Helms two weeks ago," Mr. Small said. "The Senator said that he thought perhaps the Smithsonian could 'earn its keep for a change' by helping out the President. His initial suggestion was that we consider selling Archie Bunker's recliner, an idea he said came to him as he settled into his own La-Z-Boy at the beginning of Congress' August recess. I thought about it briefly, and then realized that there were certainly some more valuable - though not more iconic - pieces of our collection that we could use to cover the debt. Starting with the Hope Diamond was my idea."

Mr. Small refused extensive comment about how this action fits in with the museum operational guidelines established by the Association of American Museums (AAM), noting only that "the word 'pawn' is not mentioned explicitly in any AAM document." He also noted that when famed jeweler Harry Winston donated the diamond to the Smithsonian in 1958, Winston also did not explicitly prohibit the Institution from pawning the stone if circumstances required, though an outright sale of the gem is not a possibility.

White House spokesman Ari Fleischer provided additional information about the terms of the pawn, which he dubbed a "short-term loan." In exchange for the loan of $500 million dollars, the White House had agreed to an interest rate of 30% for a thirty-day period. The total repayment, of $650 million, is due on 1 October in order to reclaim the Hope Diamond and return it to its place of honor at the Smithsonian. Fleischer stated flatly that the President has "no intention of defaulting on this loan, or on any of his other obligations or commitments made in good faith to the American people."

Senator Helms confirmed Mr. Small's account, and seemed unconcerned about looting the nation's treasure chest to cover the newly-created debt. Helms added that our "special relationship with South Africa could surely help us cover the loss of the Hope Diamond in the event that the President defaulted on the loan." Senate Minority Leader Trent Lott concurred in offering his support for President Bush's new loan program. "It's worth it to make sure that every American can still cash his check for $300, $500, or $600 dollars," Lott said, though he said he considered the 30% interest rate "a bit usurious."

Abe Foxman, director of the Anti-Defamation League, responded to Senator Lott's comments saying "I'm sure that the Senator did not mean any insult to Mr. Kozlowski in referring to the agreed-upon interest rate as 'usurious,' though he is surely aware of the long-standing, historical implications of using such a word in reference to a Jewish merchant and Holocaust survivor."

In contrast to comments by members of the G.O.P., Charles Rangel, a Representative from New York and the ranking Democrat on the House Ways and Means Committee, said: "The whole Republican rationale for passing such a big tax cut is that we needed to send the surpluses back to the people. How ironic is it that we are now borrowing from the people in order to pay them their checks?"[*]

For his part, Ryszard Kozlowski said that he was "thrilled, just thrilled" to be able to help the President in any way that might benefit the United States. Kozlowski, a survivor of the Nazi death camp at Auschwitz, came to the United States in 1946, and opened his first pawn shop in the Anacostia neighborhood of Washington in 1950. Several years later, he relocated it to its current location in Adams Morgan, where the store has remained ever since. He said that this "direct-collateral loan" as he called it, is certainly the largest he has ever handled - indeed, he needed to arrange additional financing with Riggs Bank, famous banker to the Federal government in its purchase of Alaska, and he said that their assistance was appropriate, given the circumstances.

Looking at Mrs. Kozlowski, who has helped her husband run the store since he opened it, he winked and said "I can see it on her, this nice blue stone, around her lovely neck," in the event that things didn't work out for the White House.