[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1129 Reported in Senate (RS)]






                                                       Calendar No. 674
109th CONGRESS
  2d Session
                                S. 1129

  To provide authorizations of appropriations for certain development 
                     banks, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 26, 2005

  Mr. Lugar (for himself, Mr. Hagel, Mr. Martinez, Mrs. Clinton, Mr. 
Stevens, Mr. Alexander, Mr. Cochran, Mr. Coleman, Mr. Obama, Mr. Thune, 
 Mr. Isakson, and Mr. Biden) introduced the following bill; which was 
     read twice and referred to the Committee on Foreign Relations

                            December 8, 2006

                Reported by Mr. Lugar, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL



  To provide authorizations of appropriations for certain development 
                     banks, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Development Bank Reform and 
Authorization Act of 2005''.</DELETED>

<DELETED>SEC. 2. FINDINGS.</DELETED>

<DELETED>    Congress makes the following findings:</DELETED>
        <DELETED>    (1) The United States has strong national security 
        and humanitarian interests in alleviating poverty and promoting 
        development around the world.</DELETED>
        <DELETED>    (2) The World Bank, the African Development Bank, 
        the Asian Development Bank, the European Bank for 
        Reconstruction and Development, and the Inter-American 
        Development Bank leverage the resources that the United States 
        and other donors can devote to such goals.</DELETED>
        <DELETED>    (3) Contributions from the United States and other 
        donors to the multilateral development banks must be well 
        managed so that the mission of such banks is fully realized and 
        not undermined by corruption. Bribes can influence important 
        bank decisions on projects and contractors and misuse of funds 
        can inflate project costs, cause projects to fail, and 
        undermine development effectiveness.</DELETED>
        <DELETED>    (4) Officials of the World Bank have identified 
        corruption as the single greatest obstacle to economic and 
        social development. Corruption undermines development by 
        distorting the rule of law and weakening the institutional 
        foundation on which economic growth depends.</DELETED>
        <DELETED>    (5) Officials of the World Bank have determined 
        that the harmful effects of corruption are especially severe on 
        the poor, who are hardest hit by economic decline, are most 
        reliant on the provision of public services, and are least 
        capable of paying the extra costs associated with bribery, 
        fraud, and the misappropriation of economic 
        privileges.</DELETED>
        <DELETED>    (6) In hearings before the Foreign Relations 
        Committee of the Senate, it was demonstrated that--</DELETED>
                <DELETED>    (A) significant multilateral development 
                bank funding has been lost to corruption and it is 
                difficult to ascertain such amount precisely, in part 
                because the multilateral development banks have not 
                implemented procedures to calculate such amounts, 
                either in the aggregate or on a country 
                basis;</DELETED>
                <DELETED>    (B) the multilateral development banks are 
                taking action to address fraud and corruption but 
                additional measures remain to be carried out;</DELETED>
                <DELETED>    (C) the capability of anti-corruption 
                mechanisms are not consistent among the multilateral 
                development banks and divergences in anti-corruption 
                policies exist that may hinder coordination on fighting 
                corruption;</DELETED>
                <DELETED>    (D) weaknesses in whistleblower policy and 
                practice exist at the multilateral development banks, 
                to varying degree, that impede anti-fraud and anti-
                corruption efforts;</DELETED>
                <DELETED>    (E) greater transparency is necessary to 
                provide effective development aid;</DELETED>
                <DELETED>    (F) the Secretary of the Treasury 
                encourages anti-corruption efforts at the multilateral 
                development banks and reviews loans made by such banks, 
                however, the United States has limited ability to 
                investigate the misuse of funds from such banks; 
                and</DELETED>
                <DELETED>    (G) in some cases, the countries bearing 
                the cost of prosecuting corruption related to the 
                multilateral development banks are the countries that 
                can least afford such costs, for example, the 
                Government of Lesotho incurred considerable expense, 
                despite competing priorities, such as those arising 
                from an HIV/AIDS rate of more than 25 percent in that 
                country, to investigate and prosecute fraud and 
                corruption related to a project that received funding 
                from the World Bank and the World Bank did not 
                contribute money towards the prosecution or 
                investigation.</DELETED>
        <DELETED>    (7) The General Accounting Office issued a report 
        in 2001 that evaluated the external audit reporting of the 
        African Development Bank, the Asian Development Bank, the 
        European Bank for Reconstruction and Development, and the 
        Inter-American Development Bank and a report in 2000 that 
        evaluated the internal controls of the World Bank, and 
        recommended measures to strengthen such audit reporting and 
        controls.</DELETED>
        <DELETED>    (8) The International Financial Institutions 
        Advisory Commission (also known as the ``Meltzer Commission'') 
        concluded in 2000, among other things, that--</DELETED>
                <DELETED>    (A) pressure to lend for lending's sake is 
                built into the structure of the multilateral 
                development banks;</DELETED>
                <DELETED>    (B) although several of the multilateral 
                development banks recognize this problem and have 
                called attention to the need for change, there is, at 
                most, weak counterbalance to the pressure to lend; 
                and</DELETED>
                <DELETED>    (C) the multilateral development banks' 
                systems for project evaluation, performance evaluation, 
                and project selection must be improved, and that such 
                evaluation should be a repetitive process spread over 
                time, including many years after final disbursement of 
                funds.</DELETED>

<DELETED>SEC. 3. DEFINITIONS.</DELETED>

<DELETED>    In this Act:</DELETED>
        <DELETED>    (1) Appropriate congressional committees.--The 
        term ``appropriate congressional committees'' means the 
        Committee on Foreign Relations and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate and the Committee on 
        International Relations and the Committee on Financial Services 
        of the House of Representatives.</DELETED>
        <DELETED>    (2) Group of 7.--The term ``Group of 7'' means 
        Canada, France, Germany, Italy, Japan, the United Kingdom, and 
        the United States.</DELETED>
        <DELETED>    (3) Group of 8.--The term ``Group of 8'' means the 
        Group of 7 and Russia.</DELETED>
        <DELETED>    (4) Multilateral development banks.--The term 
        ``multilateral development banks'' means the African 
        Development Bank, the Asian Development Bank, the European Bank 
        for Reconstruction and Development, the Inter-American 
        Development Bank, the World Bank, and any subsidiary or 
        affiliate of such institutions.</DELETED>
        <DELETED>    (5) Person.--The term ``person'' includes a 
        government, a government-controlled entity, a corporation, a 
        company, an association, a firm, a partnership, a society, and 
        a joint stock company, as well as an individual.</DELETED>
        <DELETED>    (6) Secretary.--Except as otherwise provided, the 
        term ``Secretary'' means the Secretary of the 
        Treasury.</DELETED>
        <DELETED>    (7) World bank.--The term ``World Bank'' means the 
        International Bank for Reconstruction and Development, the 
        International Development Association, the International 
        Finance Corporation, and the Multilateral Investment Guarantee 
        Agency and any subsidiary or affiliate of such 
        institutions.</DELETED>

<DELETED>SEC. 4. REFORMS.</DELETED>

<DELETED>    (a) Authority.--The Secretary is authorized to seek the 
creation of a pilot program that establishes an Anti-Corruption Trust 
at the World Bank, as described in this section.</DELETED>
<DELETED>    (b) Purposes.--The purposes of the Anti-Corruption Trust 
pilot program shall include--</DELETED>
        <DELETED>    (1) to assist poor countries in investigations and 
        prosecutions of fraud and corruption related to a loan, grant, 
        or credit of the World Bank; and</DELETED>
        <DELETED>    (2) to determine whether such a program should be 
        carried out at other multilateral development banks.</DELETED>
<DELETED>    (c) Repayment of Funds.--If a poor country assesses a fine 
or receives any renumeration as part of a prosecution paid for with 
funds from the Anti-Corruption Trust pilot program, such country shall 
repay the amount received from the Trust until the total amount 
received by such country is repaid.</DELETED>
<DELETED>    (d) Monitoring.--The Secretary shall be responsible for 
establishing a system for monitoring the disbursement and use of funds 
from the Anti-Corruption Trust pilot program and promoting access to 
such funds by poor countries that are challenged by the high cost of 
investigating and prosecuting corruption and fraud linked to a loan 
from, or a project funded by, the World Bank.</DELETED>
<DELETED>    (e) Other Donors.--The Secretary shall encourage other 
donors to the multilateral development banks to contribute funds to the 
Anti-Corruption Trust.</DELETED>
<DELETED>    (f) Poor Countries Defined.--In this section, the term 
``poor countries'' means countries eligible to borrow from the 
International Development Association, as such eligibility is 
determined by gross national product per capita, lack of 
creditworthiness to borrow on market terms, and good policy 
performance.</DELETED>
<DELETED>    (g) Reports.--</DELETED>
        <DELETED>    (1) Report on implementation.--Not later than 
        September 1, 2006, the Secretary shall submit to the 
        appropriate congressional committees a report that describes 
        the actions taken to establish the Anti-Corruption Trust as 
        described in this section.</DELETED>
        <DELETED>    (2) Report on evaluation.--Not later than 
        September 1, 2007, the Secretary shall submit to the 
        appropriate congressional committees a report that--</DELETED>
                <DELETED>    (A) evaluates the effectiveness of the 
                Anti-Corruption Trust pilot program; and</DELETED>
                <DELETED>    (B) evaluates the feasibility of 
                establishing similar trusts at other multilateral 
                development banks.</DELETED>
<DELETED>    (h) Authorization of Appropriations.--There is authorized 
to be appropriated to the Secretary such sums as may be necessary for 
contribution on behalf of the United States to an Anti-Corruption Trust 
if a pilot program establishing such a Trust is established as 
described in this section.</DELETED>

<DELETED>SEC. 5. PROMOTION OF POLICY GOALS AT MULTILATERAL DEVELOPMENT 
              BANKS.</DELETED>

<DELETED>    Title XV of the International Financial Institutions Act 
(22 U.S.C. 262o) is amended by adding at the end the 
following:</DELETED>

<DELETED>``SEC. 1505. PROMOTION OF POLICY GOALS.</DELETED>

<DELETED>    ``(a) Definitions.--In this section:</DELETED>
        <DELETED>    ``(1) Appropriate congressional committees.--The 
        term `appropriate congressional committees' means the Committee 
        on Foreign Relations and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate and the Committee on International 
        Relations and the Committee on Financial Services of the House 
        of Representatives.</DELETED>
        <DELETED>    ``(2) Multilateral development banks.--The term 
        `multilateral development banks' means the African Development 
        Bank, the Asian Development Bank, the European Bank for 
        Reconstruction and Development, the Inter-American Development 
        Bank, the World Bank, and any subsidiary or affiliate of such 
        institutions.</DELETED>
        <DELETED>    ``(3) Person.--The term `person' includes a 
        government, a government-controlled entity, a corporation, a 
        company, an association, a firm, a partnership, a society, and 
        a joint stock company, as well as an individual.</DELETED>
        <DELETED>    ``(4) Secretary.--Except as otherwise provided, 
        the term `Secretary' means the Secretary of the 
        Treasury.</DELETED>
        <DELETED>    ``(5) World bank.--The term `World Bank' means the 
        International Bank for Reconstruction and Development, the 
        International Development Association, the International 
        Finance Corporation, and the Multilateral Investment Guarantee 
        Agency, and any subsidiary or affiliate of such 
        institutions.</DELETED>
<DELETED>    ``(b) Transparency.--</DELETED>
        <DELETED>    ``(1) Publication of statements.--</DELETED>
                <DELETED>    ``(A) In general.--Not later than 60 
                calendar days after a meeting of the board of directors 
                of a multilateral development bank, the Secretary shall 
                provide for publication on the Internet Web site of the 
                Department of the Treasury of--</DELETED>
                        <DELETED>    ``(i) the justification for each 
                        vote by the United States Executive Director at 
                        the multilateral development bank on any matter 
                        before the board of directors of the bank; 
                        and</DELETED>
                        <DELETED>    ``(ii) any written statement 
                        presented at the meeting by such United States 
                        Executive Director at the bank concerning--
                        </DELETED>
                                <DELETED>    ``(I) a lending, grant, or 
                                guarantee operation which would result 
                                or be likely to result in significant 
                                social or environmental 
                                effects;</DELETED>
                                <DELETED>    ``(II) an institutional 
                                policy or strategy of the bank that 
                                generates significant public interest, 
                                including operational policies and 
                                sector or thematic 
                                strategies;</DELETED>
                                <DELETED>    ``(III) a project on which 
                                a claim has been made to the inspection 
                                mechanism of the bank; or</DELETED>
                                <DELETED>    ``(IV) a case pending 
                                before the inspection mechanism of the 
                                bank.</DELETED>
                <DELETED>    ``(B) Redacted material.--The Secretary 
                may redact material from the material to be made 
                available under subparagraph (A) if the Secretary 
                determines such material is too sensitive for public 
                distribution.</DELETED>
        <DELETED>    ``(2) Voice and vote.--The Secretary shall 
        instruct the United States Executive Director at each 
        multilateral development bank to inform the bank of the 
        publication policy described in paragraph (3), and use the 
        voice and vote of the United States to implement such 
        policy.</DELETED>
        <DELETED>    ``(3) Publication policy.--</DELETED>
                <DELETED>    ``(A) In general.--The publication policy 
                referred to in paragraph (2) is a policy that each 
                multilateral development bank shall--</DELETED>
                        <DELETED>    ``(i) make available to the 
                        public, including on the Internet Web site of 
                        such bank, the loan, credit, and grant 
                        documents, country assistance strategies, 
                        sector strategies, and sector policies prepared 
                        by the bank that are to be presented for 
                        endorsement or approval by the board of 
                        directors of the bank, 15 calendar days prior 
                        to the date that such document, strategy, or 
                        policy will be considered by the board or, if 
                        not available at that time, at the time the 
                        documents are distributed to the 
                        board;</DELETED>
                        <DELETED>    ``(ii) make available to the 
                        public all draft country strategies 120 
                        calendar days prior to consideration of such 
                        strategies by the board of directors of the 
                        bank;</DELETED>
                        <DELETED>    ``(iii) make a concerted effort to 
                        distribute paper copies of the material 
                        referred to in clauses (i) and (ii) to 
                        communities affected by the documents referred 
                        to in such clauses;</DELETED>
                        <DELETED>    ``(iv) make available to the 
                        public, including on the Internet Web site of 
                        such bank, the minutes of a meeting of the 
                        board of directors of the bank, not later than 
                        60 calendar days after the date that the bank 
                        approves the minutes of the board 
                        meeting;</DELETED>
                        <DELETED>    ``(v) make available to the 
                        public, including on the Internet Web site of 
                        such bank, a summary of discussion of the 
                        meeting of the board of directors of the bank, 
                        not later than 90 calendar days after the date 
                        of the meeting;</DELETED>
                        <DELETED>    ``(vi) keep a written transcript 
                        or electronic recording of each meeting of its 
                        board of directors and preserve the transcript 
                        or recording for not less than 10 years after 
                        the date of such meeting; and</DELETED>
                        <DELETED>    ``(vii) make available to the 
                        public a written transcript or an electronic 
                        recording of a meeting of the board of 
                        directors of the bank during the 5-year period 
                        beginning on the date that is 5 years after the 
                        date of the meeting.</DELETED>
                <DELETED>    ``(B) Redacted material.--The president of 
                a multilateral development bank may redact material 
                from the material to be made available under 
                subparagraph (A) if the president of a multilateral 
                development bank determines such material is too 
                sensitive for public distribution.</DELETED>
<DELETED>    ``(c) Strengthening Development Bank Administration.--The 
Secretary shall instruct the United States Executive Director at each 
multilateral development bank to inform the bank of, and use the voice 
and vote of the United States to achieve at the bank, the following 
United States policy goals:</DELETED>
        <DELETED>    ``(1) Each multilateral development bank shall 
        require mandatory financial disclosure of any possible or 
        apparent conflict of interest by each employee of the bank, 
        consultant to the bank, or independent expert to the bank whose 
        duties and responsibilities include, through decision or the 
        exercise of judgment, the taking of any action regarding--
        </DELETED>
                <DELETED>    ``(A) contracting or 
                procurement;</DELETED>
                <DELETED>    ``(B) developing, administering, managing, 
                or monitoring loans, grants, programs, projects, 
                subsidies, or other conferred financial or operational 
                benefits provided by the bank; or</DELETED>
                <DELETED>    ``(C) evaluating or auditing any project, 
                program or entity.</DELETED>
        <DELETED>    ``(2) Each multilateral development bank shall 
        reform the `pressure to lend' incentive structure at such bank 
        by linking project design and implementation to staff 
        performance appraisals and shall require that staff increase 
        its focus on monitoring existing loans.</DELETED>
        <DELETED>    ``(3) Each multilateral development bank shall 
        continue strengthening whistleblower policies at the bank to 
        the level of emerging standards for national and international 
        law in the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), 
        the Inspector General Act of 1978 (5 U.S.C. App.), and the 
        model approved for member nations by the Organization of 
        American States to implement the Inter-American Convention 
        Against Corruption, done at Caracas on March 29, 
        1996.</DELETED>
        <DELETED>    ``(4) All loan, credit, guarantee, and grant 
        documents and other agreements with borrowers shall include 
        provisions for the financial resources and conditionality 
        necessary to ensure that a person who obtains financial support 
        from a multilateral development bank complies with applicable 
        bank policies and national and international laws in carrying 
        out the terms and conditions of such documents and agreements, 
        including bank policies and national and international laws 
        pertaining to the comprehensive assessment and transparency of 
        the activities supported, such as those concerning public 
        consultation, access to information, public health, safety, and 
        environmental protection.</DELETED>
        <DELETED>    ``(5) Each multilateral development bank shall 
        develop clear procedures setting forth the circumstances under 
        which a person will be barred from receiving a loan, contract, 
        grant, or credit from such bank, shall make such procedures 
        available to the public, and shall make the identities of such 
        person available to the public.</DELETED>
        <DELETED>    ``(6) Each multilateral development bank shall 
        coordinate policies across international institutions on issues 
        including debarment, cross-debarment, procurement and 
        consultant guidelines, and fiduciary standards so that a person 
        that is debarred by one multilateral development bank is 
        automatically declared ineligible to conduct business with the 
        other multilateral development banks during the specified 
        ineligibility period.</DELETED>
<DELETED>    ``(d) Anti-Corruption Practices.--</DELETED>
        <DELETED>    ``(1) Voice and vote.--The Secretary shall 
        instruct the United States Executive Director at each 
        multilateral development bank to inform the bank of the United 
        States anti-corruption policy described in paragraph (2), and 
        use the voice and vote of the United States to implement such 
        policy at the bank.</DELETED>
        <DELETED>    ``(2) Anti-corruption policy.--The anti-corruption 
        policy referred to in paragraph (1) is the United States policy 
        that a person that receives money from a multilateral 
        development bank shall sign a code of conduct that embodies the 
        standards set out in section 104 of the Foreign Corrupt 
        Practices Act of 1977 (15 U.S.C. 78dd-2), and that prohibits 
        such person from corruptly in furtherance of an offer, payment, 
        promise to pay, or authorization of the payment of any money, 
        or offer, gift, promise to give, or authorization of the giving 
        of anything of value to any official for purposes, directly or 
        indirectly--</DELETED>
                <DELETED>    ``(A)(i) influencing any act or decision 
                of such official in his or her official 
                capacity;</DELETED>
                <DELETED>    ``(ii) supporting any political party, 
                political entity, any official of a political party, or 
                any candidate for political office;</DELETED>
                <DELETED>    ``(iii) inducing such official to do or 
                omit to do any act in violation of the lawful duty of 
                such official; or</DELETED>
                <DELETED>    ``(iv) securing any improper advantage; 
                or</DELETED>
                <DELETED>    ``(B) inducing such official to use the 
                official's influence with a government or 
                instrumentality thereof, to affect or influence any act 
                or decision of such government or 
                instrumentality,</DELETED>
        <DELETED>in order to assist such person in obtaining or 
        retaining business for or with, or directing business to, any 
        other person.</DELETED>
<DELETED>    ``(e) Strengthening Development Bank Auditing.--</DELETED>
        <DELETED>    ``(1) Voice and vote.--The Secretary shall 
        instruct the United States Executive Director at each 
        multilateral development bank to inform the bank of, and use 
        the voice and vote of the United States to achieve at the bank, 
        the following United States policy goals:</DELETED>
                <DELETED>    ``(A) Each multilateral development bank 
                shall--</DELETED>
                        <DELETED>    ``(i) establish an independent 
                        Office of an Inspector General, establish or 
                        strengthen an independent auditing function at 
                        the bank, and require that the Inspector 
                        General and the auditing function report 
                        directly to the board of directors of the bank; 
                        and</DELETED>
                        <DELETED>    ``(ii) adopt and implement an 
                        internationally recognized internal controls 
                        framework, allocate adequate staffing to 
                        auditing and supervision, require external 
                        audits of internal controls, and external and 
                        forensic audits of loans where fraud is 
                        suspected.</DELETED>
                <DELETED>    ``(B) Each multilateral development bank 
                shall establish a plan and schedule for conducting 
                regular, independent audits of internal management 
                controls and procedures for meeting operational 
                objectives, complying with the policies of such bank, 
                and preventing fraud, and making reports describing the 
                scope and findings of such audits available to the 
                public.</DELETED>
                <DELETED>    ``(C) Each multilateral development bank 
                shall establish effective procedures for the receipt, 
                retention, and treatment of--</DELETED>
                        <DELETED>    ``(i) complaints received by the 
                        bank regarding fraud, accounting, 
                        mismanagement, internal accounting controls, or 
                        auditing matters; and</DELETED>
                        <DELETED>    ``(ii) the confidential, anonymous 
                        submission, particularly by employees of the 
                        bank, of concerns regarding fraud, accounting, 
                        mismanagement, internal accounting controls, or 
                        auditing matters.</DELETED>
                <DELETED>    ``(D) Each multilateral development bank 
                shall post on the Internet Web site of such bank an 
                annual report containing statistical summaries and case 
                studies of the fraud and corruption cases pursued by 
                the bank's investigations unit.</DELETED>
<DELETED>    ``(f) Compensation Packages for People Negatively Affected 
by Development Bank Projects.--</DELETED>
        <DELETED>    ``(1) Voice and vote.--The Secretary shall 
        instruct the United States Executive Director at each 
        multilateral development bank to inform the bank of the United 
        States policy goals related to compensation described in 
        paragraph (2), and use the voice and vote of the United States 
        to implement such policy at the bank.</DELETED>
        <DELETED>    ``(2) Compensation policy.--The compensation 
        policy referred to in paragraph (1) is a policy that each 
        multilateral development bank shall, for each project funded by 
        the bank where compensation, including resettlement or 
        rehabilitation assistance, is to be provided to persons 
        adversely impacted by the project, require that an independent 
        mechanism be established for, or included in the design of, the 
        project to receive and adjudicate complaints from a person who 
        is eligible for compensation if such person, not more than 6 
        years after the date of the completion of the project, finds 
        that the compensation is either inadequate or improperly 
        implemented.</DELETED>
<DELETED>    ``(g) Evaluation.--The Secretary shall instruct the United 
States Executive Director at each multilateral development bank to 
inform the bank of, and use the voice and vote of the United States to 
achieve at the bank, the following goals:</DELETED>
        <DELETED>    ``(1) Each multilateral development bank shall 
        make the results of project and non-project operations 
        evaluations available to the public, including through the 
        Internet Web site of the bank and including information on the 
        quantity of projects evaluated per year as a percentage of 
        total projects carried out.</DELETED>
        <DELETED>    ``(2) Each multilateral development bank shall 
        require that all loans, grants, credits, policies, and 
        strategies, including budget support, prepared by the bank 
        include specific outcome and output indicators to measure 
        results, and that the indicators and results be published 
        periodically during the execution and at the completion of the 
        appropriate project or program, and at the number of years 
        after such completion determined to be appropriate for such 
        loan, grant, credit, policy, or strategy.</DELETED>
        <DELETED>    ``(3) Each multilateral development bank shall 
        promote rigorous evaluation of projects and policies to ensure 
        that the intent of such projects and policies is realized. Such 
        a bank shall favor grants and loans to applicants who agree, in 
        consultation with an independent evaluator or evaluators, to 
        design projects to facilitate the evaluation of outcomes. 
        Rigorous evaluations shall measure the impact on those served 
        by a loan, grant, or credit and shall have a carefully 
        constructed comparison group to help measure the impacts of the 
        loan, grant, or credit.</DELETED>
<DELETED>    ``(h) Qualification Policy.--</DELETED>
        <DELETED>    ``(1) Voice and vote.--The Secretary shall 
        instruct the United States Executive Director at each 
        multilateral development bank to encourage the bank to 
        implement the qualification policy for borrowing countries 
        described in paragraph (2), and use the voice and vote of the 
        United States to achieve such policy at each bank.</DELETED>
        <DELETED>    ``(2) Qualification policy for borrowing 
        countries.--The qualification policy for borrowing countries 
        referred to in paragraph (1) is a policy that requires, in 
        addition to the standards in effect on the date of the 
        enactment of the Development Bank Reform and Authorization Act 
        of 2005, each multilateral development bank to qualify a 
        country for budget support, adjustment lending, policy lending 
        for non-project loans, grants, or credits, or other loans 
        directed to the country's budget based on transparency in 
        procurement and fiduciary requirements and requiring the 
        borrowing country to make its budget available to the public 
        before funds are disbursed to that country.</DELETED>
<DELETED>    ``(i) Microfinance and Business Development.--The 
Secretary shall inform the management of each multilateral development 
bank and the public that it is the policy of the United States to 
encourage microfinance services for the poor and very poor (as that 
term is defined in section 259 of the Foreign Assistance Act of 1961 
(22 U.S.C. 2214a)), and micro-, small-, and medium-enterprise 
development programs, particularly in a country where the government of 
such country ranks poorly in the World Bank Institute's governance 
indicators.</DELETED>
<DELETED>    ``(j) Resource Dependent Country Revenue Transparency.--
</DELETED>
        <DELETED>    ``(1) Requirements for resource assistance for a 
        government.--The Secretary shall inform the management of each 
        multilateral development bank and the public that it is the 
        policy of the United States that any assistance provided by a 
        such bank including any investment, loan, credit, grant, or 
        guarantee, to a government of a resource-dependent country or 
        for any project located in a resource-dependent country, other 
        than humanitarian assistance, assistance to address HIV/AIDS, 
        tuberculosis, malaria or food aid, may not be provided unless 
        the government has in place or is taking the necessary steps to 
        establish functioning systems for--</DELETED>
                <DELETED>    ``(A) accurately accounting for all 
                revenues received by a borrowing government from a 
                person and all payments to a government in connection 
                with the extraction or export of natural resources, 
                such as gas, oil, oil shale, tar sands, coal, any 
                metal, mineral, or timber;</DELETED>
                <DELETED>    ``(B) the independent auditing of such 
                payments and such revenues by a credible, independent 
                auditor, applying international auditing standards, and 
                the widespread regular public dissemination of the 
                auditor's findings, including a reconciliation of 
                aggregate payments and revenues;</DELETED>
                <DELETED>    ``(C) verifying such revenues against the 
                records for such payments made by each person, 
                including widespread dissemination of aggregate payment 
                information in a manner that protects proprietary 
                information, that observes the law of the borrowing 
                country, and that the person determines does not cause 
                substantial competitive harm;</DELETED>
                <DELETED>    ``(D) making available to the public all 
                contracts between the government of such country or any 
                person owned or controlled by such government, and any 
                person that is engaged in the extraction or export of 
                natural resources through a project or program 
                supported by a bank, unless the person determines such 
                disclosure would cause substantial competitive 
                harm;</DELETED>
                <DELETED>    ``(E) applying the revenue transparency 
                approach described in this paragraph equally and fully 
                to all extractive industry companies operating in the 
                country, including state-owned entities; and</DELETED>
                <DELETED>    ``(F) establishing a legal framework for 
                disclosure of payments from a person or contracts with 
                a person and outlining the level and extent of 
                disclosure or payment information by companies in the 
                extractive industries.</DELETED>
        <DELETED>    ``(2) Requirements for other natural resource 
        assistance.--The Secretary shall inform the management of each 
        multilateral development bank and the public that it is the 
        policy of the United States that any assistance, including any 
        investment, loan, or guarantee, provided by such a bank to 
        private sector sponsors for the extraction or export of natural 
        resources in a resource-dependent country shall only be 
        provided if the government of the country has in place or is 
        taking necessary steps to establish the functioning systems 
        described in subparagraphs (A) through (F) in paragraph (1) and 
        if the private sector sponsors of such projects publicly 
        disclose revenue payments made to the government of such 
        country, in accordance with the laws of such country regarding 
        the required level and extent of such disclosure.</DELETED>
        <DELETED>    ``(3) Compliance with transparency guidelines 
        prior to approval of assistance.--In furtherance of the policy 
        described in paragraph (1), not later than 2 years after the 
        date of the enactment of the Development Bank Reform and 
        Authorization Act of 2005, the Secretary shall inform the 
        management of each multilateral development bank and the public 
        that it is the policy of the United States that any assistance 
        by such a bank, including any investment, loan, credit, grant, 
        or guarantee, other than humanitarian assistance, assistance to 
        address HIV/AIDS, tuberculosis, or malaria or to provide food, 
        to any government of a resource-dependent country or for any 
        project located in such country, shall not be provided unless 
        the bank, prior to the approval of such assistance, has--
        </DELETED>
                <DELETED>    ``(A) determined that the government has 
                in place the systems described in subparagraphs (A) 
                through (F) of paragraph (1), based on all information 
                that is relevant, applicable and reasonably available 
                to the bank, including, the views of other 
                international financial institutions active in such 
                country and the views of civil society organizations 
                that are active within and outside such 
                country;</DELETED>
                <DELETED>    ``(B) determined that private sector 
                sponsors of projects for the extraction and export of 
                natural resources have agreed to publicly disclose 
                revenue payments to host governments; and</DELETED>
                <DELETED>    ``(C) made available to the public the 
                findings and conclusions identifying the information 
                taken into consideration in making such determinations 
                and the reasons for such determinations.</DELETED>
        <DELETED>    ``(4) Resource-dependent country defined.--In this 
        subsection, the term `resource-dependent country' means a 
        country that has--</DELETED>
                <DELETED>    ``(A) an average share of natural 
                resource-derived fiscal revenues of at least 25 percent 
                of the total fiscal revenues during the preceding 3-
                year period; or</DELETED>
                <DELETED>    ``(B) an average share of natural resource 
                export proceeds of at least 25 percent of the total 
                export proceeds during the preceding 3-year 
                period.''.</DELETED>

<DELETED>SEC. 6. SENSE OF CONGRESS ON THE EXTRACTIVE INDUSTRY 
              TRANSPARENCY INITIATIVE AND G-8 AGREEMENTS.</DELETED>

<DELETED>    It is the sense of Congress that--</DELETED>
        <DELETED>    (1) the President should continue promoting the 
        Extractive Industry Transparency Initiative as one approach to 
        help ensure that the revenues from extractive industries 
        contribute to sustainable development and poverty reduction, as 
        such Initiative is a voluntary initiative intended--</DELETED>
                <DELETED>    (A) to promote greater transparency of 
                developing country government revenues and 
                expenditures, procurement, concession-granting systems; 
                and</DELETED>
                <DELETED>    (B) to work to recover stolen assets and 
                enforce antibribery laws;</DELETED>
        <DELETED>    (2) the United States should encourage the 
        continued work of the G-8 to promote the Extractive Industries 
        Transparency Initiative; and</DELETED>
        <DELETED>    (3) the United States should support and encourage 
        the carrying out of the agreements of the G-8 made at the 2004 
        Summit at Sea Island, Georgia, and at the 2003 Summit at Evian, 
        France, to promote transparency in public budgets, including 
        revenues and expenditures, government procurement, public 
        concessions, the granting of licenses with special emphasis on 
        countries with large extractive industries sectors, including 
        the agreements made at the Summit at Sea Island which 
        specifically--</DELETED>
                <DELETED>    (A) support the efforts of the Public 
                Expenditure and Financial Accountability program at the 
                World Bank to help developing countries achieve 
                accountability in public finance and expenditure and to 
                extend harmonized approaches to the assessment and 
                reform of their public financial, accountability, and 
                procurement systems;</DELETED>
                <DELETED>    (B) invite developing countries to prepare 
                anticorruption action plans to implement the 
                commitments of such countries in regional and 
                international conventions; and</DELETED>
                <DELETED>    (C) achieve agreement on full disclosure 
                of the World Bank International Development 
                Association's Country Policy and Institutional 
                Assessment results, with disclosure to begin with the 
                2005 ratings.</DELETED>

<DELETED>SEC. 7. REPORTS FROM THE GOVERNMENT ACCOUNTABILITY 
              OFFICE.</DELETED>

<DELETED>    (a) Sense of Congress on Access to Information.--It is the 
sense of Congress that--</DELETED>
        <DELETED>    (1) to evaluate the compliance of the multilateral 
        development banks with the policies of the United States 
        described in section 1505 of the International Financial 
        Institutions Act, as added by section 5 of this Act, and to 
        prepare the reports required by this section, the Comptroller 
        General of the United States should have full and complete 
        access to financial information relating to the multilateral 
        development banks, including information related to the 
        performance, accountability, oversight, financial transactions, 
        organization, and activities of the multilateral development 
        banks;</DELETED>
        <DELETED>    (2) the Secretary should seek to conclude 
        memorandums of understanding with the multilateral development 
        banks to ensure that the United States will have access to 
        documents related to information described in paragraph (1); 
        and</DELETED>
        <DELETED>    (3) the Secretary of the Treasury should 
        facilitate access by the Comptroller General of the United 
        States to the financial information described in paragraph 
        (1).</DELETED>
<DELETED>    (b) Report on Effectiveness of Multilateral Development 
Banks.--Not later than 3 years after the date of the enactment of this 
Act, the Comptroller General of the United States shall--</DELETED>
        <DELETED>    (1) conduct a review of the effectiveness of each 
        multilateral development bank in achieving the mission of such 
        bank as set out in the articles of agreement of such bank, 
        specifically poverty reduction and economic development; 
        and</DELETED>
        <DELETED>    (2) submit to the appropriate congressional 
        committees a report on the findings of the review.</DELETED>
<DELETED>    (c) Report on Consistency of Multilateral Development Bank 
Practices With Statutory Policies.--Not later than 3 years after the 
date of the enactment of this Act, the Comptroller General of the 
United States shall prepare and submit to the appropriate congressional 
committees a report on the extent to which the practices of the 
multilateral development banks are consistent with the policies of the 
United States, as expressly contained in Federal law applicable to the 
multilateral development banks.</DELETED>
<DELETED>    (d) Report on Reforms at the Multilateral Development 
Banks.--Not later than 1 year after the date of the enactment of this 
Act, the Comptroller General of the United States shall prepare and 
submit to the appropriate congressional committees a report on the 
extent of the implementation of the reforms called for by the Group of 
8 or by the Group of 7, starting with the 2000 Okinawa Summit, as 
delineated in communiques, chairman's statements, and other official 
communication through the summit or finance ministerial processes of 
the Group of 8 or the Group of 7.</DELETED>

<DELETED>SEC. 8. CONTRIBUTIONS TO MULTILATERAL DEVELOPMENT 
              BANKS.</DELETED>

<DELETED>    (a) World Bank.--The International Development Association 
Act (22 U.S.C. 284 et seq.) is amended by adding at the end the 
following new section:</DELETED>

<DELETED>``SEC. 23. FOURTEENTH REPLENISHMENT.</DELETED>

<DELETED>    ``(a) Contribution Authority.--</DELETED>
        <DELETED>    ``(1) In general.--The United States Governor of 
        the Association is authorized to contribute on behalf of the 
        United States $2,850,000,000 to the fourteenth replenishment of 
        the resources of the Association.</DELETED>
        <DELETED>    ``(2) Subject to appropriations.--Any commitment 
        to make the contribution authorized by paragraph (1) shall be 
        effective only to such extent or in such amounts as are 
        provided in advance in appropriations Acts.</DELETED>
<DELETED>    ``(b) Authorization of Appropriations.--For the 
contribution authorized by subsection (a), there are authorized to be 
appropriated, without fiscal year limitation, $2,850,000,000 for 
payment by the Secretary of the Treasury.''.</DELETED>
<DELETED>    (b) African Development Bank Fund.--The African 
Development Fund Act (22 U.S.C. 290g et seq.) is amended by adding at 
the end the following new section:</DELETED>

<DELETED>``SEC. 218. TENTH REPLENISHMENT.</DELETED>

<DELETED>    ``(a) Contribution Authority.--</DELETED>
        <DELETED>    ``(1) In general.--The United States Governor of 
        the Fund is authorized to contribute on behalf of the United 
        States $407,000,000 to the tenth replenishment of the resources 
        of the Fund.</DELETED>
        <DELETED>    ``(2) Subject to appropriations.--Any commitment 
        to make the contribution authorized by paragraph (1) shall be 
        effective only to such extent or in such amounts as are 
        provided in advance in appropriations Acts.</DELETED>
<DELETED>    ``(b) Authorization of Appropriations.--For the 
contribution authorized by subsection (a), there are authorized to be 
appropriated, without fiscal year limitation, $407,000,000 for payment 
by the Secretary of the Treasury.''.</DELETED>
<DELETED>    (c) Asian Development Fund of the Asian Development 
Bank.--The Asian Development Bank Act (22 U.S.C. 285 et seq.) is 
amended by adding at the end the following new section:</DELETED>

<DELETED>``SEC. 32. EIGHTH REPLENISHMENT.</DELETED>

<DELETED>    ``(a) Contribution Authority.--</DELETED>
        <DELETED>    ``(1) In general.--The United States Governor of 
        the Bank is authorized to contribute on behalf of the United 
        States $461,000,000 to the eighth replenishment of the 
        resources of the Fund.</DELETED>
        <DELETED>    ``(2) Subject to appropriations.--Any commitment 
        to make the contribution authorized by paragraph (1) shall be 
        effective only to such extent or in such amounts as are 
        provided in advance in appropriations Acts.</DELETED>
<DELETED>    ``(b) Authorization of Appropriations.--For the 
contribution authorized by subsection (a), there are authorized to be 
appropriated, without fiscal year limitation, $461,000,000 for payment 
by the Secretary of the Treasury.''.</DELETED>

<DELETED>SEC. 9. ANNUAL REPORTS.</DELETED>

<DELETED>    (a) Initial Report.--Not later than September 1, 2006, the 
Secretary shall submit a report to the appropriate congressional 
committees the describes the actions taken by the United States 
Executive Director at each multilateral development bank to implement 
the policy goals described in this Act and the amendments made by this 
Act and any other actions that should be taken to implement such 
goals.</DELETED>
<DELETED>    (b) Updates.--The Secretary shall submit to the 
appropriate congressional committees an annual update of the report 
required by subsection (a) for each of the fiscal years 2007, 2008, and 
2009.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Development Bank Reform and 
Authorization Act of 2005''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The United States has strong national security and 
        humanitarian interests in alleviating poverty and promoting 
        development around the world.
            (2) The World Bank, the African Development Bank, the Asian 
        Development Bank, the European Bank for Reconstruction and 
        Development, and the Inter-American Development Bank leverage 
        the resources that the United States and other donors can 
        devote to such goals.
            (3) Contributions from the United States and other donors 
        to the multilateral development banks must be well managed so 
        that the mission of such banks is fully realized and not 
        undermined by corruption. Corruption can influence important 
        bank decisions on projects and contractors and misuse of funds 
        can inflate project costs, cause projects to fail, undermine 
        development effectiveness, and erode public confidence in 
        institutions.
            (4) Officials of the World Bank have identified corruption 
        as the single greatest obstacle to economic and social 
        development. Corruption undermines development by distorting 
        the rule of law and weakening the institutional foundation on 
        which economic growth depends.
            (5) Officials of the World Bank have determined that the 
        harmful effects of corruption are especially severe on the 
        poor, who are hardest hit by economic decline, are most reliant 
        on the provision of public services, and are least capable of 
        paying the extra costs associated with corruption, bribery, 
        fraud, and the misappropriation of economic privileges.
            (6) In hearings before the Foreign Relations Committee of 
        the Senate, it was demonstrated that--
                    (A) significant multilateral development bank 
                funding has been lost to corruption and it is difficult 
                to ascertain such amount precisely, in part because the 
                multilateral development banks have not implemented 
                procedures to calculate such amounts, either in the 
                aggregate or on a country basis;
                    (B) the multilateral development banks are taking 
                action to address fraud and corruption but additional 
                measures remain to be carried out;
                    (C) the capability of anticorruption mechanisms, 
                including investigations, reporting, and disposition, 
                are not consistent among the multilateral development 
                banks and divergences in anticorruption policies exist 
                that may hinder coordination on fighting corruption;
                    (D) weaknesses in whistleblower and reporting 
                policy and practice exist at the multilateral 
                development banks, to varying degree, that impede 
                antifraud and anticorruption efforts;
                    (E) greater transparency and investigative 
                independence is necessary to provide effective 
                development aid;
                    (F) the Secretary of the Treasury encourages 
                anticorruption efforts at the multilateral development 
                banks and reviews loans made by such banks, however, 
                the United States has limited ability to investigate 
                the misuse of funds from such banks; and
                    (G) in some cases, the countries bearing the cost 
                of prosecuting corruption related to the multilateral 
                development banks are the countries that can least 
                afford such costs, for example, the Government of 
                Lesotho incurred considerable expense, despite 
                competing priorities, such as those arising from an 
                HIV/AIDS rate of more than 25 percent in that country, 
                to investigate and prosecute fraud and corruption 
                related to a project that received funding from the 
                World Bank and the World Bank did not contribute money 
                towards the prosecution or investigation.
            (7) The Government Accountability Office issued a report in 
        2001 that evaluated the external audit reporting of the African 
        Development Bank, the Asian Development Bank, the European Bank 
        for Reconstruction and Development, and the Inter-American 
        Development Bank and a report in 2000 that evaluated the 
        internal controls of the World Bank, and recommended measures 
        to strengthen such audit reporting and controls.
            (8) The International Financial Institutions Advisory 
        Commission (also known as the ``Meltzer Commission'') concluded 
        in 2000, among other things, that--
                    (A) pressure to lend for lending's sake is built 
                into the structure of the multilateral development 
                banks;
                    (B) although several of the multilateral 
                development banks recognize this problem and have 
                called attention to the need for change, there is, at 
                most, weak counterbalance to the pressure to lend; and
                    (C) the multilateral development banks' systems for 
                project evaluation, performance evaluation, and project 
                selection must be improved, and that such evaluation 
                should be a repetitive process spread over time, 
                including many years after final disbursement of funds.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means the Committee on 
        Foreign Relations of the Senate and the Committee on Financial 
        Services of the House of Representatives.
            (2) Group of 7.--The term ``Group of 7'' means Canada, 
        France, Germany, Italy, Japan, the United Kingdom, and the 
        United States.
            (3) Group of 8.--The term ``Group of 8'' means the Group of 
        7 and Russia.
            (4) Multilateral development banks.--The term 
        ``multilateral development banks'' means the African 
        Development Bank, the Asian Development Bank, the European Bank 
        for Reconstruction and Development, the Inter-American 
        Development Bank, the World Bank, and any subsidiary or 
        affiliate of such institutions.
            (5) Person.--The term ``person'' includes a government, a 
        government-controlled entity, a corporation, a company, an 
        association, a firm, a partnership, a society, and a joint 
        stock company, as well as an individual.
            (6) Secretary.--Except as otherwise provided, the term 
        ``Secretary'' means the Secretary of the Treasury.
            (7) World bank.--The term ``World Bank'' means the 
        International Bank for Reconstruction and Development, the 
        International Development Association, the International 
        Finance Corporation, and the Multilateral Investment Guarantee 
        Agency and any subsidiary or affiliate of such institutions.

SEC. 4. ANTICORRUPTION PROPOSAL AND REPORT.

    (a) Proposal.--The Secretary shall develop a proposal for a 
mechanism or program, that includes consideration of an anticorruption 
trust and of a set aside of loans or grants, that could be established 
at the multilateral development banks--
            (1) to assist poor countries in investigations and 
        prosecutions of fraud and corruption related to a loan, grant, 
        or credit of the multilateral development banks;
            (2) to provide the means for hands-on prosecutorial 
        training and education in order to better equip recipient 
        countries to fight fraud and corruption; and
            (3) to build the capacity of agencies in recipient 
        countries to prevent fraud and corruption.
    (b) Report.--Not later than September 1, 2006, the Secretary shall 
submit to the appropriate congressional committees a report on the 
proposal required by subsection (a).

SEC. 5. PROMOTION OF POLICY GOALS AT MULTILATERAL DEVELOPMENT BANKS.

    Title XV of the International Financial Institutions Act (22 U.S.C. 
262o et seq.) is amended by adding at the end the following:

``SEC. 1505. PROMOTION OF POLICY GOALS.

    ``(a) Definitions.--In this section:
            ``(1) Appropriate congressional committees.--The term 
        `appropriate congressional committees' means the Committee on 
        Foreign Relations of the Senate and the Committee on Financial 
        Services of the House of Representatives.
            ``(2) Multilateral development banks.--The term 
        `multilateral development banks' means the African Development 
        Bank, the Asian Development Bank, the European Bank for 
        Reconstruction and Development, the Inter-American Development 
        Bank, the World Bank, and any subsidiary or affiliate of such 
        institutions.
            ``(3) Person.--The term `person' includes a government, a 
        government-controlled entity, a corporation, a company, an 
        association, a firm, a partnership, a society, and a joint 
        stock company, as well as an individual.
            ``(4) Secretary.--Except as otherwise provided, the term 
        `Secretary' means the Secretary of the Treasury.
            ``(5) World bank.--The term `World Bank' means the 
        International Bank for Reconstruction and Development, the 
        International Development Association, the International 
        Finance Corporation, and the Multilateral Investment Guarantee 
        Agency, and any subsidiary or affiliate of such institutions.
    ``(b) Transparency.--
            ``(1) Publication of statements.--
                    ``(A) In general.--Not later than 60 calendar days 
                after a meeting of the board of directors of a 
                multilateral development bank, the Secretary--
                            ``(i) shall provide for publication on the 
                        Web site of the Department of the Treasury of--
                                    ``(I) the justification for each 
                                vote by the United States Executive 
                                Director at the multilateral 
                                development bank on any policy, loan, 
                                grant, or credit before the board of 
                                directors of the bank; and
                                    ``(II) any official position 
                                statement issued at the meeting by such 
                                United States Executive Director at the 
                                bank concerning an institutional policy 
                                or strategy of the bank, including 
                                operational policies, anticorruption 
                                policies, and sector or thematic 
                                strategies that were subject to public 
                                consultation or public comment period; 
                                and
                            ``(ii) should provide for publication on 
                        the Web site of the Department of the Treasury 
                        of any official position statement issued at 
                        the meeting by such United States Executive 
                        Director at the bank concerning a lending, 
                        grant, or guarantee operation which would 
                        result or be likely to result in significant 
                        social or environmental effects.
                    ``(B) Redacted material.--The Secretary may redact 
                material from the material to be made available under 
                subparagraph (A) if the Secretary determines such 
                material is too sensitive for public distribution.
            ``(2) Information disclosure.--The Secretary shall instruct 
        the United States Executive Director at each multilateral 
        development bank to use the voice and vote of the United States 
        to make available to the public all draft country strategies 
        not less than 120 calendar days prior to consideration of such 
        strategies by the board of directors of the bank.
    ``(c) Strengthening Development Bank Administration.--The Secretary 
shall instruct the United States Executive Director at each 
multilateral development bank to inform the bank of, and use the voice 
and vote of the United States to achieve at the bank, the following 
United States policy goals:
            ``(1) Each multilateral development bank should require 
        annual mandatory financial disclosure of any possible or 
        apparent conflict of interest by each employee of the bank, 
        consultant to the bank, or independent expert to the bank whose 
        duties and responsibilities include, through decision or the 
        exercise of judgment, the taking of any action regarding--
                    ``(A) contracting or procurement;
                    ``(B) developing, administering, managing, or 
                monitoring loans, grants, programs, projects, 
                subsidies, or other conferred financial or operational 
                benefits provided by the bank; or
                    ``(C) evaluating or auditing any project, program 
                or entity.
            ``(2) Each multilateral development bank should reform the 
        `pressure to lend' incentive structure at such bank by--
                    ``(A) holding management accountable for program 
                and project effectiveness;
                    ``(B) linking project design and implementation and 
                results to staff performance appraisals; and
                    ``(C) requiring that staff increase its focus on 
                monitoring existing loans.
            ``(3) Each multilateral development bank should continue 
        strengthening whistleblower policies at the bank to the level 
        of emerging standards reflected in national and international 
        law in the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), 
        and the Inspector General Act of 1978 (5 U.S.C. App.).
            ``(4) Each multilateral development bank should continue 
        strengthening voluntary disclosure programs for firms and 
        individuals participating in projects financed by such banks, 
        to the level of emerging best-practices as expressed in the 
        Department of Defense Guidelines for Voluntary Disclosure and 
        the audit policy of the Environmental Protection Agency.
            ``(5) All loan, credit, guarantee, and grant documents and 
        other agreements with borrowers should include provisions for 
        the financial resources and conditionality necessary to ensure 
        that a person who obtains financial support from a multilateral 
        development bank complies with applicable bank policies and 
        national and international laws in carrying out the terms and 
        conditions of such documents and agreements, including bank 
        policies and national and international laws pertaining to the 
        comprehensive assessment and transparency of the activities 
        supported, such as those concerning public consultation, access 
        to information, public health, safety, and environmental 
        protection.
            ``(6) Each multilateral development bank should develop, if 
        it has not already done so, clear procedures setting forth a 
        clear and uniform definition of sanctionable misconduct and the 
        circumstances under which a person will be barred from 
        receiving a loan, contract, grant, or credit from such bank, 
        should make such procedures available to the public, and should 
        make the identities of such person available to the public.
            ``(7) Each multilateral development bank should coordinate 
        policies consistent with best practices across international 
        institutions on issues including common definitions of fraud 
        and corruption, debarment procedures, procurement and 
        consultant guidelines, and fiduciary standards so that a person 
        that is debarred by one multilateral development bank is 
        ineligible to conduct business with the other multilateral 
        development banks during the specified ineligibility period.
    ``(d) Anticorruption Practices.--
            ``(1) Voice and vote.--The Secretary shall instruct the 
        United States Executive Director at each multilateral 
        development bank to inform the bank of the United States 
        anticorruption policy described in paragraph (2)(A), and to use 
        the voice and vote of the United States to achieve such policy 
        at the bank.
            ``(2) Anticorruption policy.--
                    ``(A) In general.--The anticorruption policy 
                referred to in paragraph (1) is a policy that requires 
                a person (including beneficiaries of investment loans 
                and grants made by a multilateral development bank), as 
                well as a bidder, supplier, or contractor under a 
                contract financed by a multilateral development bank to 
                observe the highest standard of ethics during the 
                procurement and exception of such a contract. Such a 
                standard of ethics should be consistent with those in 
                the Foreign Corrupt Practices Act of 1977 (Public Law 
                95-213; 91 Stat. 1496) and in section 27 of the Office 
                of Federal Procurement Policy Act (41 U.S.C. 423) and 
                prohibit coercive practices, collusive practices, 
                corrupt practices, and fraudulent practices.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Coercive practice.--The term 
                        `coercive practices' means harming or 
                        threatening to harm, directly or indirectly, 
                        persons, or their property, to influence the 
                        issuance, receipt, execution, or performance of 
                        any contract, loan, credit, grant, or other 
                        conferred financial or operational benefit 
                        provided by each multilateral development bank.
                            ``(ii) Collusive practice.--The term 
                        `collusive practices' means a scheme or 
                        arrangement between 2 or more bidders, with or 
                        without the knowledge of the Borrower, designed 
                        to establish bid prices at artificial, 
                        noncompetitive levels.
                            ``(iii) Corrupt practice.--The term 
                        `corrupt practice' means the offering, giving, 
                        receiving, or soliciting, directly or 
                        indirectly, of anything of value to influence 
                        the action of a public official (including 
                        staff of a multilateral development bank) in 
                        the issuance, receipt, execution, or 
                        performance of any contract, loan, credit, 
                        grant, or other conferred financial or 
                        operational benefit by each multilateral 
                        development bank.
                            ``(iv) Fraudulent practice.--The term 
                        `fraudulent practice' means a misrepresentation 
                        or omission of facts in order to influence the 
                        issuance, receipt, execution, or performance of 
                        any contract, loan, credit, grant, or other 
                        conferred financial or operational benefit by 
                        each multilateral development bank.
    ``(e) Strengthening Development Bank Auditing and Procurement.--
            ``(1) In general.--The Secretary shall instruct the United 
        States Executive Director at each multilateral development bank 
        to inform the bank of, and use the voice and vote of the United 
        States to achieve at the bank, the United States policy goal 
        that each multilateral development bank, that has not already 
        done so, should--
                    ``(A) establish an independent investigation office 
                and an internal auditing function that is free from 
                interference in determining the scope of investigations 
                and internal auditing, performing work, and 
                communicating results, and that regularly report to the 
                board of directors of the bank;
                    ``(B) adopt and implement an internationally 
                recognized internal controls framework, allocate 
                adequate staffing and budget to auditing, require 
                external auditor attestations of internal controls and 
                of external financial reporting, and conduct forensic 
                audits of loans where fraud is suspected;
                    ``(C) develop and formally adopt a procedure for 
                the confidential voluntary reporting of misconduct by 
                individuals and firms participating in bank-financed 
                projects; and
                    ``(D) adopt, implement, and apply consistently 
                internationally accepted procurement practices.
            ``(2) Corruption investigation information center.--The 
        Secretary shall instruct the United States Executive Director 
        at each multilateral development bank to inform the bank of, 
        and use the voice and vote of the United States to achieve at 
        the bank, the United States policy goal that the banks should 
        create a Corruption Investigation Information Center to be 
        staffed by the banks and charged with maintaining a relational 
        investigative database for use by investigators from all the 
        banks. Such database should contain forensic, financial, and 
        transnational information pertaining to projects finance by a 
        bank that is developed as a result of investigations within a 
        bank, for use by all banks as a means to taking collective 
        enforcement action against entities, individuals, and officials 
        engaged in corruption in connection with a project financed by 
        a bank.
            ``(3) Independent investigative function.--
                    ``(A) In general.--The Secretary shall instruct the 
                United States Executive Director at each multilateral 
                development bank to inform the bank of, and use the 
                voice and vote of the United States to achieve at the 
                bank, the establishment of an independent investigative 
                function to investigate corruption in their operational 
                activities.
                    ``(B) Report.--Each year, the United States 
                Executive Director of each multilateral development 
                should submit to the Secretary a report on--
                            ``(i) the status of the investigative 
                        function at the Director's bank;
                            ``(ii) the Director's views as to whether 
                        the investigative function remains 
                        operationally independent and capable of 
                        carrying out its mission; and
                            ``(iii) what policies, practices, or 
                        procedures are needed to strengthen the 
                        investigative function at each bank.
    ``(f) Compensation for People Negatively Affected by Development 
Bank Projects.--
            ``(1) Voice and vote.--The Secretary shall instruct the 
        United States Executive Director at each multilateral 
        development bank to use the voice and vote of the United States 
        to achieve the policy described in paragraphs (2) and (3) at 
        the bank.
            ``(2) Compensation policy.--In consultation with various 
        stakeholders including affected communities, each multilateral 
        development bank should develop a compensation policy which 
        would apply to each project where compensation, including 
        resettlement or rehabilitation assistance, is to be provided to 
        persons adversely impacted by the project. The policy should 
        require the establishment and financing of an independent and 
        transparent mechanism that is responsive to affected 
        communities which will receive and resolve complaints from a 
        person who is eligible for compensation if such person finds 
        that the compensation is either inadequate or improperly 
        implemented.
            ``(3) Report on resettlement.--Each multilateral 
        development bank should publish in its annual report the number 
        of people that have been resettled by projects funded by such 
        bank during the previous fiscal year and report on the 
        rehabilitation status of resettled people in relevant project 
        documents.
    ``(g) Evaluation.--The Secretary shall instruct the United States 
Executive Director at each multilateral development bank to inform the 
bank of, and use the voice and vote of the United States to achieve at 
the bank, the following goals:
            ``(1) Each multilateral development bank should make the 
        results of project and nonproject operations evaluations 
        available to the public, including through the Internet Web 
        site of the bank. Such information should include data on the 
        number of projects evaluated per year as a percentage of total 
        projects carried out.
            ``(2) Each multilateral development bank should require 
        that all loans, grants, credits, guarantees, policies, and 
        strategies, including budget support, prepared by the bank 
        include specific outcome and output indicators to measure 
        results, and that the indicators and results be published 
        periodically during the execution and at the completion of the 
        appropriate project or program, and at the number of years 
        after such completion determined to be appropriate for such 
        loan, grant, credit, policy, or strategy.
            ``(3) Each multilateral development bank should promote 
        rigorous independent evaluation of projects and policies to 
        ensure that the intent of such projects and policies is 
        realized. Each bank should encourage applicants and borrowers 
        to agree, in consultation with an independent evaluator or 
        evaluators, to design projects to facilitate the evaluation of 
        outcomes. Rigorous independent evaluations should measure the 
        impact on those served by a loan, grant, or credit and should 
        have a carefully constructed comparison group to help measure 
        the impacts of the loan, grant, or credit.
    ``(h) Qualification Policy.--
            ``(1) Voice and vote.--The Secretary shall instruct the 
        United States Executive Director at each multilateral 
        development bank to encourage the bank to implement the 
        qualification policy for borrowing countries described in 
        paragraph (2), and use the voice and vote of the United States 
        to achieve such policy at each bank.
            ``(2) Qualification policy for borrowing countries.--The 
        qualification policy for borrowing countries referred to in 
        paragraph (1) is a policy that requires, in addition to the 
        standards in effect on the date of the enactment of the 
        Development Bank Reform and Authorization Act of 2005, each 
        multilateral development bank to qualify a country for budget 
        support, adjustment lending, policy lending for nonproject 
        loans, grants, or credits, or other loans directed to the 
        country's budget based on transparency in procurement and 
        fiduciary requirements and requiring the borrowing country to 
        make its budget available to the public before funds are 
        disbursed to that country.
    ``(i) Microfinance and Business Development.--The Secretary shall 
inform the management of each multilateral development bank and the 
public that it is the policy of the United States to encourage 
microfinance services for the poor and very poor (as that term is 
defined in section 259 of the Foreign Assistance Act of 1961 (22 U.S.C. 
2214a)), and micro-, small-, and medium-enterprise development 
programs, because of the merit of these programs in addressing poverty 
and economic growth, particularly in a country where the government of 
such country ranks poorly in the World Bank Institute's governance 
indicators.
    ``(j) Extractive Industry Transparency.--
            ``(1) Requirements for resource assistance.--The Secretary 
        shall instruct the United States Executive Director at each 
        multilateral development bank to inform the bank and the public 
        and use their voice and vote of the United States so that any 
        investment, loan, credit, grant, or guarantee made by a 
        multilateral development bank for extraction or export of gas, 
        oil, minerals, timber, or other natural resources should not be 
        provided unless the recipient government has in place, or is 
        taking the necessary steps to establish prior to June 2008, 
        functioning systems for--
                    ``(A) accurately accounting for all revenues 
                received by a borrowing government from a person and 
                all payments to a government in connection with the 
                extraction or export of natural resources, such as gas, 
                oil, oil shale, tar sands, coal, any metal, mineral, or 
                timber;
                    ``(B) the independent auditing of such payments and 
                such revenues by a credible, functionally independent 
                auditor applying international auditing standards, and 
                making publicly available the auditor's findings and 
                recommendations;
                    ``(C) verifying government receipts against company 
                payments made by each person, including widespread 
                dissemination of annual payment information in a manner 
                that does not create competitive disadvantage or 
                disclose proprietary information;
                    ``(D) establishing a legal framework for disclosure 
                of payments from a person or contracts with a person 
                and outlining the level and extent of disclosure or 
                payment information by persons in the extractive 
                industries;
                    ``(E) making available to the public all contracts 
                between the government of such country or any person 
                owned or controlled by such government, and any person 
                that is engaged in the extraction or export of natural 
                resources through a project or program supported by a 
                bank, unless such disclosure would cause substantial 
                competitive harm;
                    ``(F) adopting internal control and audit 
                procedures for handling resource revenue receipts 
                through internal government accounts or special fund 
                arrangements and clearly describing and disclosing to 
                the public the spending of such receipts from such 
                accounts or funds;
                    ``(G) establishing a national audit body or 
                equivalent organization which is independent of the 
                executive, that would provide timely reports for the 
                legislative, and public on the financial integrity of 
                government accounts; and
                    ``(H) applying the revenue transparency approach 
                described in this paragraph equally and fully to all 
                extractive companies operating in the country, 
                including State-owned entities.
            ``(2) Requirements for sponsors of resource projects.--The 
        Secretary shall inform the management of each multilateral 
        development bank and the public that it is the policy of the 
        United States that any multilateral development bank 
        assistance, including any investment, loan, or guarantee, 
        provided to public or private sector sponsors for the 
        extraction or export of natural resources should be provided 
        only if--
                    ``(A) the government of the country has in place or 
                is taking necessary steps to establish the functioning 
                systems described in subparagraphs (A) through (H) of 
                paragraph (1);
                    ``(B) the sponsors of such projects publicly 
                disclose payments made to the government of such 
                country in accordance with the legal framework 
                described in subparagraph (D) of paragraph (1); and
                    ``(C) agree to contract disclosure as described in 
                subparagraphs (D) and (E) of paragraph (1).
            ``(3) Compliance with transparency guidelines prior to 
        approval of assistance.--In furtherance of the policy described 
        in paragraphs (1) and (2), not later than 3 years after the 
        date of the enactment of the Development Bank Reform and 
        Authorization Act of 2005, the Secretary shall inform the 
        management of each multilateral development bank and the public 
        that it is the policy of the United States to oppose any 
        secondary or follow-up investment, loan, credit, grant, or 
        guarantee if the recipient government does not have in place 
        the systems described in subparagraphs (A) through (H) of 
        paragraph (1).
            ``(4) Report to congress.--Not later than June 1, 2006, and 
        annually thereafter, the Secretary of the Treasury shall submit 
        to Congress and make available on the Web site of the 
        Department of the Treasury, a report that includes, for each 
        multilateral development bank, the following:
                    ``(A) A description of the assistance approved 
                during the previous fiscal year for a project or 
                program as set out in paragraph (1) or (2).
                    ``(B) An assessment of the extent to which each 
                country receiving such assistance is implementing a 
                program that complies with the policy set out in 
                paragraph (1), based on all relevant information 
                including the views of the international institutions 
                and of civil society organizations.
                    ``(C) An assessment of the extent to which a person 
                that received such assistance has disclosed payments to 
                governments and agreed to contract disclosure, as 
                described in subparagraphs (D) and (E) of paragraph 
                (1).''.

SEC. 6. SENSE OF CONGRESS ON THE EXTRACTIVE INDUSTRY TRANSPARENCY 
              INITIATIVE AND G-8 AGREEMENTS.

    It is the sense of Congress that--
            (1) the President should continue promoting the 
        Transparency Initiative of the Group of 8 and the Extractive 
        Industry Transparency Initiative as approaches to help ensure 
        that the revenues from extractive industries contribute to 
        sustainable development and poverty reduction, as such 
        initiatives are voluntary initiatives intended--
                    (A) to promote greater transparency of developing 
                country government revenues and expenditures, 
                procurement, concession-granting systems; and
                    (B) to work to recover stolen assets and enforce 
                antibribery and anticorruption laws; and
            (2) the United States should strongly support and encourage 
        the carrying out of the agreements of the Group of 8 made at 
        the 2005 Summit at Gleneagles, Scotland, at the 2004 Summit at 
        Sea Island, Georgia, and at the 2003 Summit at Evian, France, 
        to promote transparency in public budgets, including revenues 
        and expenditures, government procurement, public concessions, 
        the granting of licenses with special emphasis on countries 
        with large extractive industries sectors, including the 
        agreements made at the Summit at Gleneagles which called on the 
        World Bank and other multilateral development banks to 
        implement the Extractive Industries Transparency Initiative, 
        and at the Summit at Sea Island which specifically--
                    (A) support the efforts of the Public Expenditure 
                and Financial Accountability program at the World Bank 
                to help developing countries achieve accountability in 
                public finance and expenditure and to extend harmonized 
                approaches to the assessment and reform of their public 
                financial, accountability, and procurement systems;
                    (B) invite developing countries to prepare 
                anticorruption action plans to implement the 
                commitments of such countries in regional and 
                international conventions; and
                    (C) achieve agreement on full disclosure of the 
                World Bank International Development Association's 
                Country Policy and Institutional Assessment results, 
                with disclosure to begin with the 2005 ratings.

SEC. 7. CONTRIBUTIONS TO MULTILATERAL DEVELOPMENT BANKS.

    (a) World Bank.--The International Development Association Act (22 
U.S.C. 284 et seq.) is amended by adding at the end the following new 
section:

``SEC. 23. FOURTEENTH REPLENISHMENT.

    ``(a) Contribution Authority.--
            ``(1) In general.--The United States Governor of the 
        Association is authorized to contribute on behalf of the United 
        States $2,850,000,000 to the fourteenth replenishment of the 
        resources of the Association.
            ``(2) Subject to appropriations.--Any commitment to make 
        the contribution authorized by paragraph (1) shall be effective 
        only to such extent or in such amounts as are provided in 
        advance in appropriations Acts.
    ``(b) Authorization of Appropriations.--For the contribution 
authorized by subsection (a), there are authorized to be appropriated, 
without fiscal year limitation, $2,850,000,000 for payment by the 
Secretary of the Treasury.''.
    (b) African Development Bank Fund.--The African Development Fund 
Act (22 U.S.C. 290g et seq.) is amended by adding at the end the 
following new section:

``SEC. 218. TENTH REPLENISHMENT.

    ``(a) Contribution Authority.--
            ``(1) In general.--The United States Governor of the Fund 
        is authorized to contribute on behalf of the United States 
        $407,000,000 to the tenth replenishment of the resources of the 
        Fund.
            ``(2) Subject to appropriations.--Any commitment to make 
        the contribution authorized by paragraph (1) shall be effective 
        only to such extent or in such amounts as are provided in 
        advance in appropriations Acts.
    ``(b) Authorization of Appropriations.--For the contribution 
authorized by subsection (a), there are authorized to be appropriated, 
without fiscal year limitation, $407,000,000 for payment by the 
Secretary of the Treasury.''.
    (c) Asian Development Fund of the Asian Development Bank.--The 
Asian Development Bank Act (22 U.S.C. 285 et seq.) is amended by adding 
at the end the following new section:

``SEC. 32. EIGHTH REPLENISHMENT.

    ``(a) Contribution Authority.--
            ``(1) In general.--The United States Governor of the Bank 
        is authorized to contribute on behalf of the United States 
        $461,000,000 to the eighth replenishment of the resources of 
        the Fund.
            ``(2) Subject to appropriations.--Any commitment to make 
        the contribution authorized by paragraph (1) shall be effective 
        only to such extent or in such amounts as are provided in 
        advance in appropriations Acts.
    ``(b) Authorization of Appropriations.--For the contribution 
authorized by subsection (a), there are authorized to be appropriated, 
without fiscal year limitation, $461,000,000 for payment by the 
Secretary of the Treasury.''.

SEC. 8. REPORTS TO CONGRESS.

    (a) Reports From the Government Accountability Office.--
            (1) Sense of congress on access to information.--It is the 
        sense of Congress that--
                    (A) to evaluate the compliance of the multilateral 
                development banks with the policies of the United 
                States described in section 1505 of the International 
                Financial Institutions Act, as added by section 5 of 
                this Act, and to prepare the reports required by this 
                section, the Comptroller General of the United States 
                should have full and complete access to financial 
                information relating to the multilateral development 
                banks, including information related to the 
                performance, accountability, oversight, financial 
                transactions, organization, and activities of the 
                multilateral development banks;
                    (B) the Secretary should seek to conclude 
                memorandums of understanding with the multilateral 
                development banks to ensure that the United States will 
                have access to documents related to information 
                described in subparagraph (A); and
                    (C) the Secretary of the Treasury should facilitate 
                access by the Comptroller General of the United States 
                to the financial information described in subparagraph 
                (A).
            (2) Report on reforms at the multilateral development 
        banks.--Not later than 1 year after the date of the enactment 
        of this Act, the Comptroller General of the United States shall 
        prepare and submit to the appropriate congressional committees 
        a report on the extent of the implementation of the reforms 
        called for by the Group of 8 or by the Group of 7, starting 
        with the 2000 Okinawa Summit, as delineated in communiques, 
        chairman's statements, and other official communication through 
        the summit or finance ministerial processes of the Group of 8 
        or the Group of 7.
            (3) Report on financial structure of the world bank.--Not 
        later than 2 years after the date of enactment of this Act, the 
        Comptroller General of the United States shall prepare and 
        submit to the appropriate congressional committees a report on 
        the appropriateness of the World Bank's equity-loan ratio to 
        best address financial risks and development goals.
            (4) Report on effectiveness of multilateral development 
        banks.--Not later than 3 years after the date of the enactment 
        of this Act, the Comptroller General of the United States 
        shall--
                    (A) conduct a review of the effectiveness of each 
                multilateral development bank in achieving the mission 
                of such bank as set out in the articles of agreement of 
                such bank, specifically poverty reduction and economic 
                development; and
                    (B) submit to the appropriate congressional 
                committees a report on the findings of the review.
            (5) Report on consistency of multilateral development bank 
        practices with statutory policies.--Not later than 3 years 
        after the date of the enactment of this Act, the Comptroller 
        General of the United States shall prepare and submit to the 
        appropriate congressional committees a report on the extent to 
        which the practices of the multilateral development banks are 
        consistent with the policies of the United States, as expressly 
        contained in Federal law applicable to the multilateral 
        development banks.
    (b) Reports on Implementation of Policy Goals.--
            (1) Initial report.--Not later than September 1, 2006, the 
        Secretary shall submit a report to the appropriate 
        congressional committees that describes the actions taken by 
        the United States Executive Director at each multilateral 
        development bank to implement the policy goals described in 
        this Act and the amendments made by this Act and any other 
        actions that should be taken to implement such goals.
            (2) Updates.--The Secretary shall submit to the appropriate 
        congressional committees an annual update of the report 
        required by paragraph (1) for each of the fiscal years 2007 and 
        2008.
                                                       Calendar No. 674

109th CONGRESS

  2d Session

                                S. 1129

_______________________________________________________________________

                                 A BILL

  To provide authorizations of appropriations for certain development 
                     banks, and for other purposes.

_______________________________________________________________________

                            December 8, 2006

                       Reported with an amendment