Enterprise fund spending
▸ Enterprise funds. The House report on the bill offered a highly critical assessment of the Hungarian-American Enterprise Fund, one of several such equity and credit funds established to promote business development. The report said that the fund had failed to notify Congress before investing $4 million in a new merchant bank. The bank, called EurAmerica, paid three of its managers annualized salaries of almost $400,000 each.
The report reverberated from Washington to Budapest as the president of the Enterprise Fund, Alexander Tomlinson, resigned and the organization cut the salaries of EurAmerica's officials. AID moved to tighten oversight of the enterprise funds, which had operated with considerable latitude since their creation.
Chairman David R. Obey, D-Wis., of the House Foreign Operations Appropriations Subcommittee also had questioned the legal costs run up by the enterprise funds. Since their creation, several of the funds had been represented by the New York-based law firm Weil, Gotshal and Manges. According to an article in the Legal Times newspaper, the firm had reaped hundreds of thousands of dollars in fees from the arrangement.