[Congressional Record Volume 144, Number 46 (Thursday, April 23, 1998)]
[Senate]
[Pages S3542-S3543]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CAMPBELL (for himself and Mr. Faircloth):
  S. 1979. A bill to ensure the transparency of International Monetary 
Fund operations; to the Committee on Foreign Relations.


            THE IMF TRANSPARENCY AND EFFICIENCY ACT OF 1998

  Mr. CAMPBELL. Mr. President, today I introduce the ``International 
Monetary Fund Transparency and Efficiency Act of 1998.'' When bailing 
out failing economies, the International Monetary Fund often requires 
countries to make their markets more transparent, efficient and 
accountable. In the wake of the Asian economic crisis, it has become 
clear that the IMF itself also sorely needs the very same increased 
transparency, efficiency, and accountability that the IMF demands of 
others.
  I am pleased to be joined today by my colleagues from North Carolina 
and Alabama, Senators Faircloth and Shelby, who are original cosponsors 
of this legislation.
  On March 17, 1998, the Senate Appropriations Committee approved S. 
1769, which would provide Supplemental Appropriations for the IMF for 
Fiscal Year 1998. Although I voted against the amendment which would 
provide $18 billion to bail out the IMF, the Senate ultimately adopted 
this amendment. While S. 1769 contains a few provisions calling for IMF 
reforms, like increased transparency and calling on countries receiving 
IMF loans to end market distorting government subsidies, S. 1769 
contains much weaker enforcement mechanisms than those contained in the 
bill I am introducing today. Also, S. 1769 does not curtail the IMF's 
subsidized interest rates, something this bill will do.
  Just last week, the IMF itself freely admitted the need for increased 
openness and accountability. On April 14, 1998, on the eve of the IMF's 
annual spring meeting, Managing Director, Michel Camdessus, promised 
more openness and accountability at the IMF. Furthermore, during a 
National Journal interview earlier this month, Deputy Treasury 
Secretary Lawrence Summers was quoted as saying, ``Equally, we cannot 
be satisfied with the IMF that we now have. And that is why it is 
important to build consensus as rapidly as possible on efforts to make 
the IMF a more transparent institution.'' I believe the American 
taxpayers deserve no less.
  We in Congress must act to ensure that just such IMF reforms become 
reality. By sending the IMF's established hierarchy a clear and 
immediate reason to implement these reforms we will ensure that these 
long overdue reforms will actually take place.
  This legislation is also timely. When the IMF bails out failing 
economies, it regularly calls for increased transparency and 
governmental efficiency as a precondition for receiving financial aid. 
The IMF is right on target in this respect. Increased transparency and 
accountability are crucial to give the American taxpayers reasonable 
assurances that the problems that cause these economic breakdowns are 
being directly addressed. Obviously, if these troubled economies had 
been transparent, efficient and open to American exports from the 
start, Congress would not be debating about making another $18 billion 
available to the IMF. Clearly, the IMF itself should live up to the 
standards it sets for others.
  This legislation would withhold U.S. federal funding from the IMF 
until the Treasury Secretary certifies that the IMF has met four 
specific reform requirements, and then Congress enacts a joint 
resolution approving this certification.
  First, the IMF would be required to make the minutes of its board of 
Governors or Executive Board available for public inspection within 
three months of the meeting. Second, the IMF would release copies of 
loan and program documents, written reviews, and other pertinent 
documents related to proposed and ongoing programs within three months. 
Third, the IMF would establish an independent board to review the IMF's 
operations, research and loan activities and then issue annual reports 
for public inspection. Finally, when granting financial assistance, the 
IMF would charge interest rates that are comparable to market interest 
rates rather than the subsidized interest rates it currently charges. 
Naturally, this bill includes special exemptions to protect classified 
U.S. information, information which would disrupt markets, and 
proprietary information.
  The administration and IMF have requested that the American taxpayers 
make an additional $18 billion of their hard-earned dollars available 
to the IMF to replenish its fund that has been depleted by the Asian 
financial crisis. My bill will bring accountability to an institution, 
funded in large part by the American people that has--for the last 50 
years--eluded true accountability. Increased transparency and 
efficiency will finally enable the American taxpayers to clearly see 
how their tax dollars are being used by the IMF.
  For the reasons stated above and more, I introduce this bill as the 
Senate companion to H.R. 3331, recently introduced by our colleagues in 
the House, Congressman Saxton of New Jersey, the Chairman of the Joint 
Economic Committee, Congressman Tom Campbell from California, and House 
Majority Leader Dick Armey. The Heritage Foundation has described this 
legislation as a compromise with a lot of merit. It is time for 
increased transparency and efficiency at the IMF, and I urge my 
colleagues to support passage of this legislation. I ask unanimous 
consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1979

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``IMF Transparency and 
     Efficiency Act of 1998''.

     SEC. 2. DENIAL OF FEDERAL FUNDS TO THE INTERNATIONAL MONETARY 
                   FUND IF ITS OPERATIONS ARE NOT MADE MORE 
                   TRANSPARENT.

       Title XV of the International Financial Institutions Act 
     (22 U.S.C. 262o-262o-1) is amended by adding at the end the 
     following:

     ``SEC. 1503. DENIAL OF FEDERAL FUNDS TO THE INTERNATIONAL 
                   MONETARY FUND IF ITS OPERATIONS ARE NOT MADE 
                   MORE TRANSPARENT.

       ``(a) In General.--An officer, employee, or agent of the 
     United States may not, directly or indirectly, provide 
     Federal funds to, or for the benefit of the International 
     Monetary Fund unless--
       ``(1) there is in effect a written certification, made by 
     the Secretary of the Treasury to the Committee on Banking and 
     Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate, that the International Monetary Fund has met the 
     requirements of subsection (b); and
       ``(2) the Congress has enacted a joint resolution approving 
     the certification.
       ``(b) Requirements.--The requirements of this subsection 
     are the following:
       ``(1) Within 3 months after any meeting of the Board of 
     Governors or the Executive Board of the International 
     Monetary Fund, an edited copy of the minutes of the meeting 
     shall be made available for public inspection, with the 
     following information redacted:
       ``(A) Information which, if released, would adversely 
     affect the national security of a country, and which is of 
     the type that would be classified by the United States 
     Government.
       ``(B) Information which, if released, would disrupt 
     markets.
       ``(C) Proprietary information.
       ``(2) Within 3 months after the staff of the International 
     Monetary Fund makes a loan document, written review, program 
     document, or assessment of any proposed or ongoing loan 
     program of the International

[[Page S3543]]

     Monetary Fund, a copy of the review, document, or assessment, 
     and all related and supporting materials, shall be made 
     available for public inspection, with the following 
     information redacted:
       ``(A) Information which, if released, would adversely 
     affect the national security of a country, and which is of 
     the type that would be classified by the United States 
     Government.
       ``(B) Information which, if released, would disrupt 
     markets.
       ``(C) Proprietary information.
       ``(3) Not later than 18 months after the date of enactment 
     of this section:
       ``(A) The International Monetary Fund shall establish an 
     independent advisory board to review the research, 
     operations, and loan programs of the International Monetary 
     Fund.
       ``(B) The legislature of each country which is represented 
     on the Executive Board of the International Monetary Fund 
     shall each appoint to the advisory board 1 individual with 
     expertise in private sector finance gained in the private 
     sector or in academia.
       ``(C) The advisory board shall issue annual reports 
     summarizing its activities, which shall be available 
     immediately for public inspection.
       ``(4) The annual rate at which the International Monetary 
     Fund charges interest on loans made after the date of 
     enactment of this section shall be comparable to the average 
     annual rate of interest in financial markets for loans of 
     comparable maturity, adjusted for risk.
       ``(c) Effective Period of Certification.--
       ``(1) In general.--Except as provided in paragraph (2), 
     certification made under this section shall cease to be in 
     effect 1 year after the date the certification is made.
       ``(2) Revocation.--
       ``(A) In general.--A certification made under this section 
     shall cease to be in effect if the Secretary of the Treasury 
     revokes the certification.
       ``(B) Cause for revocation.--The Secretary of the Treasury 
     shall revoke a certification made under this section if the 
     Secretary of the Treasury is made aware that the 
     International Monetary Fund has ceased to meet a requirement 
     of subsection (b).''.

     SEC. 3. EFFECTIVE DATE.

       This Act shall take effect 6 months after the date of 
     enactment of this Act.
                                 ______