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

1.

Short title

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

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. 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. (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 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 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; (D)weaknesses in whistleblower policy and practice exist at the multilateral development banks, to varying degree, that impede anti-fraud and anti-corruption efforts; (E)greater transparency is necessary to provide effective development aid; (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 (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 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. (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.

3.

Definitions

In this Act: (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. (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.

4.

Reforms

(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. (b)

Purposes

The purposes of the Anti-Corruption Trust pilot program shall include— (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 (2)to determine whether such a program should be carried out at other multilateral development banks. (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. (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. (e)

Other Donors

The Secretary shall encourage other donors to the multilateral development banks to contribute funds to the Anti-Corruption Trust. (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. (g)

Reports

(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. (2)

Report on evaluation

Not later than September 1, 2007, the Secretary shall submit to the appropriate congressional committees a report that— (A)evaluates the effectiveness of the Anti-Corruption Trust pilot program; and (B)evaluates the feasibility of establishing similar trusts at other multilateral development banks. (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.

5.

Promotion of policy goals at Multilateral Development Banks

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

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 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. (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 shall provide for publication on the Internet 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 matter before the board of directors of the bank; and (ii)any written statement presented at the meeting by such United States Executive Director at the bank concerning— (I)a lending, grant, or guarantee operation which would result or be likely to result in significant social or environmental effects; (II)an institutional policy or strategy of the bank that generates significant public interest, including operational policies and sector or thematic strategies; (III)a project on which a claim has been made to the inspection mechanism of the bank; or (IV)a case pending before the inspection mechanism of the bank. (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)

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. (3)

Publication policy

(A)

In general

The publication policy referred to in paragraph (2) is a policy that each multilateral development bank shall— (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; (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; (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; (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; (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; (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 (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. (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. (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 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— (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 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. (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. (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. (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. (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. (d)

Anti-Corruption 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 anti-corruption policy described in paragraph (2), and use the voice and vote of the United States to implement such policy at the bank. (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— (A)(i)influencing any act or decision of such official in his or her official capacity; (ii)supporting any political party, political entity, any official of a political party, or any candidate for political office; (iii)inducing such official to do or omit to do any act in violation of the lawful duty of such official; or (iv)securing any improper advantage; or (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, in order to assist such person in obtaining or retaining business for or with, or directing business to, any other person.(e)

Strengthening development bank auditing

(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: (A)Each multilateral development bank shall— (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 (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. (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. (C)Each multilateral development bank shall establish effective procedures for the receipt, retention, and treatment of— (i)complaints received by the bank regarding fraud, accounting, mismanagement, internal accounting controls, or auditing matters; and (ii)the confidential, anonymous submission, particularly by employees of the bank, of concerns regarding fraud, accounting, mismanagement, internal accounting controls, or auditing matters. (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. (f)

Compensation packages 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 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. (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. (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 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. (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. (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. (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 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. (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. (j)

Resource dependent country revenue transparency

(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— (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, 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; (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; (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; (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 (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. (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. (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— (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; (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 (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. (4)

Resource-dependent country defined

In this subsection, the term resource-dependent country means a country that has— (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 (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.

.

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 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— (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 laws; (2)the United States should encourage the continued work of the G–8 to promote the Extractive Industries Transparency Initiative; and (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— (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.

7.

Reports from the Government Accountability Office

(a)

Sense of Congress on access to information

It is the sense of Congress that— (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; (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 (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). (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— (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 (2)submit to the appropriate congressional committees a report on the findings of the review. (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. (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 communiqués, chairman’s statements, and other official communication through the summit or finance ministerial processes of the Group of 8 or the Group of 7.

8.

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:

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:

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:

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.

.

9.

Annual reports

(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. (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.

1.

Short title

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

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.

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.

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).

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:

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).

.

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.

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:

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:

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:

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.

.

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 communiqués, 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.

December 8, 2006 Reported with an amendment