AMBASSADOR TAYLOR: Ladies and gentlemen, let me first of all thank you very much for coming out here this afternoon. This is a big event for several people, who will have an opportunity to address you here this afternoon. The Polish American Enterprise Fund and Freedom Foundation, we are here to commemorate and to congratulate.

Before I introduce our main speaker, who of course needs no introduction, let me just mention the people who are here with us today. Ambassador Kozminski is the President of the Foundation, which you will hear more about. John Birkelund is the Chairman of the Board of the Polish American Enterprise Fund, and you will hear from John in a moment. Andrew Natsios, you all know, is the Administrator of USAID. Assistant Secretary Beth Jones is the Head of the European writ broadly, part of the State Department. And Ambassador Grudzinski is the Ambassador here from Warsaw, from Poland.

So it is very easy for -- and there are three other people who will be introduced in a moment. Not to worry. (Laughter.)

Let me also acknowledge Mrs. Lane Kirkland, who is here with us today, and we are very pleased to have her here with us. Thank you, Mrs. Kirkland, for being here. And let me do the easiest job of all, is introduce to you the person probably as well known as anyone around the world, Secretary of State Colin Powell.  (Applause.)

SECRETARY POWELL: Thank you, and good afternoon, ladies and gentlemen. It is a great pleasure to have you here in the Treaty Room of the State Department on this beautiful afternoon for this very, very significant and important occasion. Mrs. Kirkland, it is a great pleasure to have you here to join us for this occasion. And so many other guests, that I dare not start to introduce individual members. But as a former National Security Advisor, it would be most inappropriate of me not to acknowledge the presence of Dr. Zbigniew Brzezinski, another National Security Advisor colleague of mine. It is a great pleasure to have you here, and welcome.

And I thank you, Bill, for your very brief introduction. You could have said a few other things. I may not be that well known to everybody. (Laughter.) But I do thank you for the leadership and I thank you for the work that you have put into this project as well. And Ambassador Grudzinski and Ambassador Kozminski, and distinguished guests, welcome, one and all.

It is a pleasure to be here today to celebrate success, the accomplishments of the Polish American Enterprise Fund, the establishment of the Polish American Freedom Foundation and, above all, the repayment of $120 million of the original grant money that made the fund's work possible. When Congress passed the 1989 Support for East European Democracy Act, known as the SEED Act, it didn't just settle for the same old approach to assistance, "we'll just put it on out." To the Congress' credit at that time, to the administration's credit at that time, they agreed to try something new, an innovative approach based on the creation of enterprise funds with authorization for them to act like venture capital companies. It was an attempt to use the market and the way we know how markets can work to build market economies. It was a bold stroke and today we see the payoff.

In Poland, the fund supported the development of small and medium businesses during Poland's transition to a market economy. And examples of the fund's activities include support for the Enterprise Credit Corporation and the first Polish American Bank, which together lent to more than 7,000 businesses and created over 30,000 jobs. Capital for Fundusz Mikro, a micro-finance institution which has lent to more than 22,000 Polish entrepreneurs. And then, finally, funding for the establishment of the Enterprise Educational Foundation, which supports the development of business education in Poland and has awarded more than 17,000 grants to the best Polish business students.

I could go on at some length with other examples of what this program has done but the message is very, very clear. The Polish American Enterprise Fund worked. Even remarkable to me as an old government employee is that when the fund accomplished its mission, it wound up its operations, got out of the way, sunset itself and -- shock upon shock -- returned the investment in spades.

Not stopping there, the fund went further. It also earmarked part of its earnings to create an enduring legacy, something that would continue beyond the life of the fund: The Polish American Freedom Foundation. The foundation's eventual endowment could reach $180 million.

The Polish fund was the most successful of the 10 European and Eurasian funds established under the SEED Act. That success is a tribute to the great entrepreneurial potential of the Polish people, a potential which was unleashed with the fall of the Iron Curtain.

It is also a tribute to the skill and persistence of the fund's management team and Chairman John Birkelund here with us today and also the many, many talented business people and venture capitalists who contribute to the fund's work.

The measure, of course, of any assistance program is the impact it has on people. In the case of Poland and PAEF, the return on investment was huge for the people of Poland. Not only have we helped the Polish people create a vibrant entrepreneurial class, we have also left behind the foundation to continue the work of the fund in Poland and in its neighbors.

The Polish American Enterprise Fund is a shining example of the creative use of American and recipient country talents to make a difference. We should all here today be very, very proud of what has been accomplished by Americans and Poles working together to take advantage of the power of the free economic system that we all believe in so strongly now, to take advantage of what happens when you release the talents of individual men and women to pursue their destiny as God has given them that right to pursue that destiny, and when you help them. When you help them with financial support, with encouragement, and by getting them to believe in themselves. The fund did all that, and my congratulations to all who were involved in the work of the fund. Thank you so very much. (Applause.)

AMBASSADOR TAYLOR: Thank you, Mr. Secretary. The people assembled in this room also had a big part in doing this and putting this thing together.

I see Ambassador Jim Holmes, together with Dr. Brzezinski, Dan Fried, also an ambassador in Poland. Others -- I am not going to make the same mistake that you avoided, Mr. Secretary, of trying to identify all the people.

But this was a team effort. It was a great team effort. A key part of that was USAID and Andrew Natsios has a couple of remarks.

DIRECTOR NATSIOS: Thank you, Bill.

Secretary Powell, Ambassador John Birkelund, friends of Poland and the Polish American Enterprise Fund, the friendship of the Polish and the American people go back to the war for independence and has been renewed every generation since. It is a friendship born of family ties and a common love of freedom.

Freedom is under attack again today as it has been many times before. We will have to pursue our current crisis to its end. I believe we will be victorious. Our people and our institutions, though, are strong and our friendships with freedom-loving nations like Poland are secure.

We are here today to celebrate a signal achievement of the Polish people, the graduation of the Polish American Enterprise Fund and the payment to the United States of $120 million. In 10 years, the Polish fund went from conception to the completion of its mission. We at USAID point with some pride to the initial grants that got the Polish fund started during the first Bush administration eight-and-a-half years ago. There were some who challenged the wisdom of this move, who questioned whether the Polish Government, the Polish system because of the years of Soviet domination, would know how to take care of this capitalist enterprise that had been set up. No one asks that question now.

The Polish fund was extraordinarily fortunate to have John Birkelund and Bob Faris running it and Lane Kirkland, Dr. Brzezinski, John Smith of General Motors, and Ambassador Nicholas Rey on the board. Their willingness to serve and teach, their ability to learn, to adapt as their counterparts were adapting was a testament to these men and women who began by leading this important effort. It meant that many careful hours of serious reflection, reading, meeting and talking with people.

But if they worked hard, the Polish people and the new Polish system worked even harder, throwing off 42 years of Soviet practice and theory. They went to work, built their businesses, hired their staff and paid their bills. The Polish fund lent wisely, establishing Eastern Europe's first small loan program, Poland's first mortgage bank, and a micro lending fund which has some 41,000 loans. So wisely, in fact, that its example has sparked interest in other countries.

Within a few years, the various companies and businesses the fund helped finance had attracted $450 million from the United States and other foreign investors. The Polish fund became fully self-supporting in less than a decade and the directors started paying the American people back. On September 27th, the last tranche was sent to the US Treasury, $120 million was returned to the American taxpayer.

The money the fund generated by selling its investments was also enough to endow a new organization last year, the Polish American Freedom Foundation, which the Secretary just mentioned. Its purpose is to carry on the work of the fund building on what Poland now knows about business and free markets. But we are getting much more than that, all of us.

The investment we made in the Polish American Enterprise Fund was not about money but about helping the Polish people rediscover the business acumen that they had lived with many years before the Soviet takeover. The energy and know-how that they acquired as they worked through the many difficult years of transition to a market economy now animates the Polish American Freedom Foundation. The lessons they learned, they are now teaching.

That is good news to the United States, to everyone who appreciates how free markets and democratic institutions have helped Poles run their own economy. I know that John Birkelund and Bob Faris remember the late Lane Kirkland as most of you do, too. He was far more than just the head of the country's largest and most influential labor union. His empathy for Poland and his vision of what it could become brought the AFL/CIO into unprecedented contact with the Polish working people. But he, too, knew that to refashion the Polish economy would depend on the business sector. And I would like to acknowledge Mrs. Kirkland's presence with us honoring us in this ceremony today.

Out of recognition for his efforts, his vision and commitment, the Polish Freedom Foundation chose to call its fellowship program the Lane Kirkland fellowships. We have two of these fellowship winners with us today, Wlodzimierz Skleniarz and Dmytro Koval.

Wlodzimierz is a printer from Krakow and an excellent example of the people who made the transformation from state to private ownership. In 1992, he got an early loan from the small business fund that PAEF had started and capitalized. Two years later, he took back another and much larger loan. Today, his print shop has annual sales of nearly $2 million and 10 employees.

Dmytro is from Donetsk in Ukraine, where he is the director of the project management department of the regional development agency in the Donbas region. He is currently studying Poland's economic and social policies as it prepares for entry into the European Union.

I would also like to recognize the president and CEO of the Mikro Fund, Witold Szwajkowski. The Mikro Fund has made loans to over 25,000 people. The value of the loans is listed at $83 million. But its true value lies in homes and businesses and the people they have helped.

Thank you for having me speak today and thank you for the great success of this fund. Thank you very much. (Applause.)

AMBASSADOR TAYLOR: Before I ask John Birkelund to make a couple remarks, let me just acknowledge both Jim Holmes' leadership in this as my predecessor's predecessor and Larry Napper, Ambassador Larry Napper's leadership in this as my predecessor in this job. And with that, John.

MR. BIRKELUND: Mr. Secretary, on behalf of Bob Faris, who could not be with us today, our board and former directors, our friends in the United States and our friends in Poland, we thank you for this recognition and this celebration. It is very gratifying to everybody who has been involved in this engagement.

Our friends from abroad, from Poland and Ukraine, have been recognized, so I won't introduce them again. But I would like to say one particular thing about our president of the Micro Fund. The Micro Fund is a unique instrument. We borrowed it from Bangladesh and Bolivia. These loans start at $700 and go up to $2,000 or thereabouts. And as you have heard, there are something like 83,000 -- 25,000, something like that.

The management of this is incredible. It spreads responsibility all over Poland. How many offices do we have? Spread throughout Poland, giving sustenance to small entrepreneurs who have no other access to capital. And this succeeds on our earlier program of the enterprise loan program, which was larger, which is reflected by our gentleman who did the printing, has the printing company.

These are programs that reflect the first meeting that I had with Wilesa. That was in 1990 up in Gdansk, and we were surrounded by press and any number of his colleagues and it was very early in the stage of transition. And he said, "What I need, I need banks." And then after that, I went to see then Finance Minister Balcerowicz and he said, "What we need is we need loans."

And we struggled, but we got there. And I am grateful for the people who got us there, those loans and those small loans have been very important in our progress.

We have had a remarkable board. One of the most remarkable members was Lane Kirkland. He stands in our memory sharply as a man of great generosity but realism. And I can't tell you how much he helped us in our progress.

I am also very grateful to Bob Faris who isn't with us today, who has managed this as chief executive. I found him at a venture capital firm and translated him into a Polish venture capitalist. And he has done a remarkable job.

I clearly recall that rainy day in March 1990 when our board first met here in Washington. And with the guidance of President Bush and Deputy Secretary Eagleburger, we defined our four-fold mission to encourage and stimulate the Polish private sector with private loans, investments and technical assistance, which I think is terribly important. Secondly, we were to accomplish this without loss. And I remember John Whitehead and I, who were standing at the same podium at the time -- he had Hungary -- we both said, how are we ever going to do that? We were to leave behind an organization seeded with private capital to carry forward or investment programs. And, fourth, and very important, by virtue of our example, to establish a precedent for other similar government funded privately managed undertakings.

With our investment team in Warsaw now managing $450 million in privately raised capital, and our foundation being capitalized at 180 million under the strong leadership of our good friend, Ambassador Kozminski, we have I believe fulfilled the first three of these goals.

With respect to the last, I am hopeful that our experience will indeed induce our government to mobilize the vast reservoir of qualified prospective American volunteers to implement the foreign aid programs directed to the private sector. This form of grassroots entrepreneurial encouragement brings with it immense economic, social and political leverage. A dynamic, emerging, stakeholding middle class is the essential cornerstone of a civil society and a democracy. And it is the United States that is uniquely qualified to provide it.

Thank you very much. (Applause.)

AMBASSADOR TAYLOR: This concludes the formal part of our ceremony. Those of you who can stick around and talk with each other and talk with us, I invite you to do that. I think we have a glass or two of champagne if you would like to join with us, and let me thank again all of the people here who have been able to contribute to this ceremony. Thank you all very much. (Applause.)

END 4:40 P.M. EST