[Congressional Record Volume 142, Number 34 (Wednesday, March 13, 1996)]
[Senate]
[Page S1992]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         ADMINISTRATION EFFORTS TO COMBAT INTERNATIONAL BRIBERY

 Mr. FEINGOLD. Mr. President, most of us believe that a key 
factor in America's economic growth will be an increase of U.S. exports 
overseas, and accordingly, we have concentrated our efforts on 
overcoming obstacles which U.S. businesses face overseas. One of the 
real problems which has not received enough attention, though, is 
bribery and corruption.
  Bribery as a way of doing business is widespread. But it is 
inefficient: it skews international markets, it discriminates against 
the honest, and it taints the overall image of a company. No one 
benefits in the long-term from contracts based on bribery.
  U.S. business is prohibited from engaging in bribery under the 
Foreign Corrupt Practices Act [FCPA]. I am proud of this law, and 
believe that it promotes good business. But, in a perverse irony, our 
businesses are disadvantaged in the international marketplace because 
they can't pay bribes. Some have suggested repealing the FCPA, which is 
very short-sighted. Rather, a more constructive alternative is to work 
for international acceptance of the principles of the FCPA. In light of 
the corruption scandals that have rocked Taiwan, France, and NATO, to 
name a few, there are serious moves afoot on the national level as well 
as among the grassroots to do so.
  This is a sensitive topic because it involves moral, financial, and 
intellectual concerns with, in many cases, our friends. But that 
sensitivity cannot deter us from addressing the subject seriously. U.S. 
businesses cannot afford their Government avoiding the issue.
  For these reasons, I am very pleased that the U.S. Trade 
Representative, Mickey Kantor, has made the countering of bribery and 
corruption a high priority in U.S. trade policy. Last week he gave an 
encouraging speech which identified bribery as the triple obstacle that 
it is: a barrier to U.S. exports; a burden to developed countries 
seeking to do business; and an obstacle to the establishment of sound 
governments in developing nations.
  The full remarks of Ambassador Kantor are unfortunately too extensive 
to include in the Record, so alternatively, I ask to have printed in 
the Record an editorial which appeared in Sunday's Washington Post 
applauding Ambassador Kantor's initiative, and encouraging the 
administration to maintain the pressure.
  The editorial follows:

               [From the Washington Post, Mar. 10, 1996]

                           Trading on Bribes

       Ever since 1977, when the United States barred U.S. 
     corporations from paying bribes overseas, U.S. executives 
     have complained that enforced honesty was costing them 
     business. European and Asian competitors were beating them 
     out all over the world--and then going home and deducting the 
     bribes from their taxes.
       How much of this lost business was real, and how much 
     involved sour grapes, has never been clear. Some studies have 
     shown only marginal losses to U.S. business. Some U.S. firms 
     have found ways around the Foreign Corrupt Practices Act, as 
     the 1977 law is called, And many executives agree that the 
     act has also helped them at times, by giving them an excuse 
     not to pay costly bribes that might in any case bring small 
     or no returns.
       Still, no one denies that the act can handicap U.S. firms. 
     And with trade now accounting for 30 percent of our total 
     economy and a sizable number of domestic jobs, any such 
     impediment has to be taken seriously.
       U.S. Trade Representative Mickey Kantor this week 
     identified bribery and corruption in overseas business as 
     significant and unfair barriers to trade. Rather than 
     softening the U.S. law, he said, Washington will now press 
     other nations to deal more honestly.
       Fat chance, you may say. And of course corruption will 
     never be entirely uncoupled from international business, any 
     more than the influence of money can be entirely leached out 
     of politics.
       But in two areas a full-court press would not be entirely 
     quixotic. The first is to press other developed countries to 
     play more by our rules. The Organization of Economic 
     Cooperation and Development, which includes the nations of 
     western Europe, North America and Japan, is moving toward 
     adoption of a policy barring tax-deductibility of overseas 
     bribes. That policy should be encouraged as a bare minimum, 
     with criminalization of bribery to follow.
       The second goal is to persuade developing countries to 
     adopt fair rules for government procurement contracts in 
     telecommunications, energy and other, dollar-rich sectors. 
     The more open such processes are, the less opportunity is 
     provided for bribery.
       Such a campaign would be as much in the interest of the 
     developing countries themselves as it would benefit U.S. 
     firms. Widespread corruption usually enriches a small elite 
     while discouraging foreign investment and impoverishing the 
     economy as a whole. Even many of our competitors would 
     welcome a clearer set of rules, if they knew everyone was 
     playing by the same ones.
       Clinton administration officials have raised these issues 
     before. This time they should maintain the pressure. Pushing 
     for honest trade is not an unfair trade practice.

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