[Congressional Record Volume 143, Number 154 (Thursday, November 6, 1997)]
[Senate]
[Page S11890]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       DEFENSE INDUSTRY INITIATIVE ON BUSINESS ETHICS AND CONDUCT

 Mr. SANTORUM. I rise today to congratulate the Defense 
Industry Initiative on Business Ethics and Conduct for its 11 years of 
active effort in creating high standards of business ethics, business 
conduct, and compliance in the defense industry. I know that many of my 
colleagues in the Senate are not familiar with the unique DII effort.
  In 1986, the DII was created as an outgrowth of the work of the 
President's Blue Ribbon Commission on Defense Management, known as the 
Packard Commission. At that time, a number of leading defense 
contractors drafted a set of DII Principles. These Principles obligated 
signatory companies to have written codes of conduct, to distribute the 
codes to all of their employees, to have ethics training programs which 
made certain that employees understood the codes, to have a hotline or 
ombudsman system, to have systems to make voluntary disclosures of 
violations of law or regulation to the Government, to attend annual 
best practices forums, and to participate in a public accountability 
process.
  The group of DII signatory companies has grown over these 11 years to 
48 companies, including virtually all of the largest defense 
contractors. To be frank, I would think that at least all of our 
hundred largest defense contractors should be willing to sign up 
publicly to the Defense Industry Initiative Principles. Therefore, I 
call upon those companies that are among this group which, for whatever 
reason, are not presently signatories to sign this statement in order 
to pledge themselves to the Defense Department and to the public as 
being committed to these ideals.
  On June 5 and 6, 1997, in Washington, DC, the DII conducted its 12th 
Best Practices Forum. This session included some 160 representatives of 
the signatory companies and 40 senior Government officials. The program 
was a state-of-the-art exploration of best practices in corporate 
ethics and compliance programs.
  I understand that the Defense Industry Initiative is the only 
industry ethics initiative of its type. There are any number of other 
industries which have had sufficient ethical problems and should 
consider something equivalent.
  I will conclude by saying that all the evidence available to me 
suggests that the participation of these 47 companies has had a very 
positive impact on their levels of compliance, as well as in the tone 
of the relationship with the Government. I am certain that we all 
recall the events that gave rise to the creation of the Packard 
Commission--things such as high price spare parts or improper labor 
charging. It is my understanding that the Government audits show that 
the level of such problems has dropped dramatically among these DII 
signatory companies. Furthermore, I believe that the DII effort has 
forged a true partnership in the best sense of the word between 
Government officials responsible for procurement and those in industry 
who design, develop, and manufacture the items necessary for our 
national defense.
  So that the contribution that has been made and the excellent work 
that has been done can be fully recognized, I would like to place into 
the Congressional Record a list of those companies which are 
signatories to the DII. All of these defense contractors are to be 
congratulated for the leadership they have shown and their 
accomplishments to date. I am sure that we can count on them to 
continue this exemplary work in the future. And I hope other defense 
contractors can be counted on to join this important effort.

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