[Congressional Record Volume 144, Number 106 (Friday, July 31, 1998)]
[Senate]
[Pages S9668-S9669]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           EXECUTIVE SESSION

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    CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN 
                  INTERNATIONAL BUSINESS TRANSACTIONS

  Mr. GORTON. I ask unanimous consent that the Senate proceed to 
executive session to consider the following treaty on today's Executive 
Calendar, No. 21.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GORTON. I further ask unanimous consent that the treaty be 
considered as having passed through its various parliamentary stages, 
up to and including the presentation of the resolution of ratification; 
that all committee provisos, reservations, understandings, declarations 
be considered agreed to; that any statements be inserted in the 
Congressional Record as if read; I further ask consent when the 
resolution of ratification is voted upon, the motion to reconsider be 
laid upon the table; the President be notified of the Senate's action, 
and following the disposition of the treaty, the Senate return to 
legislative session.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GORTON. I ask for a division vote on the resolution of 
ratification.
  The PRESIDING OFFICER. A division vote is requested. Senators in 
favor of the resolution of ratification please stand and be counted.
  All those opposed, please stand and be counted.
  On a division, two-thirds of the Senators present having voted in the 
affirmative, the resolution of ratification is agreed to.
  The resolution of ratification is as follows:

       Resolved (two-thirds of the Senators present concurring 
     therein), That the Senate advise and consent to the 
     ratification of the Convention on Combating Bribery of 
     Foreign Public Officials in International Business 
     Transactions, adopted at Paris on November 21, 1997, by a 
     conference held under the auspices of the Organization for 
     Economic Cooperation and Development (OECD), signed in Paris 
     on December 17, 1997, by the United States and 32 other 
     nations (Treaty Doc. 105-43), subject to the understanding of 
     subsection (a), the declaration of subsection (b), and the 
     provisos of subsection (c).
       (a) Understanding.--The advice and consent of the Senate is 
     subject to the following understanding, which shall be 
     included in the instrument of ratification and shall be 
     binding on the President:
       Extradition.--The United States shall not consider this 
     Convention as the legal basis for extradition to any country 
     with which the United States has no bilateral extradition 
     treaty in force. In such cases where the United States does 
     have a bilateral extradition treaty in force, that treaty 
     shall serve as the legal basis for extradition for offenses 
     covered under this Convention.
       (b) Declaration.--The advice and consent of the Senate is 
     subject to the following declaration:
       Treaty interpretation.--The Senate affirms the 
     applicability to all treaties of the constitutionally based 
     principles of treaty interpretation set forth in Condition 
     (1) of the resolution of ratification of the INF Treaty, 
     approved by the Senate on May 27, 1988, and Condition (8) of 
     the resolution of ratification of the Document Agreed Among 
     the State Parties to the Treaty on Conventional Armed Forces 
     in Europe, approved by the Senate on May 14, 1997.
       (c) Provisos.--The advice and consent of the Senate is 
     subject to the following provisos:
       (1) Enforcement and monitoring.--On July 1, 1999, and 
     annually thereafter for five years, unless extended by an Act 
     of Congress, the President shall submit to the Committee on 
     Foreign Relations of the Senate, and the Speaker of the House 
     of Representatives, a report that sets out:
       (A) Ratification.--A list of the countries that have 
     ratified the Convention, the dates of ratification and entry 
     into force for each country, and a detailed account of U.S. 
     efforts to encourage other nations that are signatories to 
     the Convention to ratify and implement it.
       (B) Domestic legislation implementing the convention.--A 
     description of the domestic laws enacted by each Party to the 
     Convention that implement commitments under the Convention, 
     and an assessment of the compatibility of the laws of each 
     country with the requirements of the Convention.
       (C) Enforcement.--An assessment of the measures taken by 
     each Party to fulfill its obligations under this Convention, 
     and to advance its object and purpose, during the previous 
     year. This shall include:
       (1) an assessment of the enforcement by each Party of its 
     domestic laws implementing the obligations of the Convention, 
     including its efforts to:
       (i) investigate and prosecute cases of bribery of foreign 
     public officials, including cases involving its own citizens;
       (iii) provide sufficient resources to enforce its 
     obligations under the Convention;
       (iii) share information among the Parties to the Convention 
     relating to natural and legal persons prosecuted or subjected 
     to civil or administrative proceedings pursuant to 
     enforcement of the Convention; and
       (iv) respond to requests for mutual legal assistance or 
     extradition relating to bribery of foreign public officials.
       (2) an assessment of the efforts of each Party to--
       (i) extradite its own nationals for bribery of foreign 
     public officials;
       (ii) make public the names of natural and legal persons 
     that have been found to violate its domestic laws 
     implementing this Convention; and
       (iii) make public pronouncements, particularly to affected 
     businesses, in support of obligations under this Convention.
       (3) an assessment of the effectiveness, transparency, and 
     viability of the OECD monitoring process, including its 
     inclusion of input from the private sector and non-
     governmental organizations.
       (D) Laws prohibiting tax deduction of bribes.--An 
     explanation of the domestic laws enacted by each signatory to 
     the Convention that would prohibit the deduction of bribes in 
     the computation of domestic taxes. This shall include:
       (i) the jurisdictional reach of the country's judicial 
     system;
       (ii) the definition of ``bribery'' in the tax code;
       (iii) the definition of ``foreign public officials'' in the 
     tax code; and
       (iv) the legal standard used to disallow such a deduction.
       (E) Future negotiations.--A description of the future 
     work of the Parties to the Convention to expand the 
     definition of ``foreign public official'' and to assess 
     other areas where the Convention could be amended to 
     decrease bribery and other corrupt activities. This shall 
     include:
       (1) a description of efforts by the United States to amend 
     the Convention to require countries to expand the definition 
     of ``foreign public official,'' so as to make illegal the 
     bribery of:
       (i) foreign political parties or party officials,
       (ii) candidates for foreign political office, and
       (iii) immediate family members of foreign public officials.
       (2) an assessment of the likelihood of successfully 
     negotiating the amendments set out in paragraph (1), 
     including progress made by the Parties during the most recent 
     annual meeting of the OECD Ministers; and
       (3) an assessment of the potential for expanding the 
     Convention in the following areas:
       (i) bribery of foreign public officials as a predicate 
     offense for money laundering legislation;
       (ii) the role of foreign subsidiaries and offshore centers 
     in bribery transactions; and
       (iii) private sector corruption and corruption of officials 
     for purposes other than to obtain or retain business.
       (F) Expanded membership.--a description of U.S. efforts to 
     encourage other non-OECD member to sign, ratify, implement, 
     and enforce the Convention.
       (G) Classified annex.--a classified annex to the report, 
     listing those foreign corporations or entities the President 
     has credible national security information indicating they 
     are engaging in activities prohibited by the Convention.
       (2) Mutual legal assistance.--When the United States 
     receives a request for assistance under Article 9 from a 
     country with which it has in force a bilateral treaty for 
     mutual legal assistance in criminal matters, the bilateral 
     treaty will provide the legal basis for responding to that 
     request. In any case of assistance sought from the United 
     States under Article 9, the United States shall, consistent 
     with U.S. laws, relevant treaties and arrangements, deny 
     assistance where granting the assistance sought would 
     prejudice its essential public policy interest,

[[Page S9669]]

     including cases where the Responsible Authority, after 
     consultation with all appropriate intelligence, anti-
     narcotic, and foreign policy agencies, has specific 
     information that a senior government official who will have 
     access to information to be provided under this Convention is 
     engaged in a felony, including the facilitation of the 
     production or distribution of illegal drugs.
       (3) Supremacy of the constitution.--Nothing in the 
     Convention requires or authorizes legislation or other action 
     by the United States of America that is prohibited by the 
     Constitution of the United States as interpreted by the 
     United States.

  Mr. FEINGOLD. Mr. President, I rise today in strong support of the 
Convention on Combating Bribery of Foreign Public Officials in 
International Business Transactions, and am pleased that the Senate is 
poised to ratify it today.
  This convention seeks to establish worldwide standards for the 
criminalization of the bribery of foreign officials to influence or 
retain business. That this treaty has overwhelming bipartisan support 
is not surprising. But that we have this treaty to consider at all is a 
rather exceptional event.
  For it was just over 20 years ago that the Congress passed the 
Foreign Corrupt Practices Act, or FCPA. This landmark legislation, 
which I am proud to say was sponsored by one of Wisconsin's most 
respected elected officials, Senator William Proxmire, was enacted 
after it was discovered that some American companies were keeping slush 
funds for making questionable and/or illegal payments to foreign 
officials to help land business deals.
  For these 20 years, the FCPA has succeeded at curbing U.S. corporate 
bribery of foreign officials by establishing extensive bookkeeping 
requirements to ensure transparency and by criminalizing the bribery of 
foreign officials.
  These very important principles do not simply reflect an American 
sense of morality and fair play in business. They also strengthen 
America's trade policy, foster faith in American democracy, and protect 
our interests in requiring an open environment for U.S. investment.
  Certainly, these are principles and guidelines in everyone's best 
interest, and as such, well worth promoting worldwide.
  Yet there has been a price for taking the ethical high road. U.S. 
companies that are trying to pursue opportunities in the global 
marketplace are forced to compete with firms from countries whose 
national laws take a more--shall we say--``laissez-faire'' approach to 
this issue, and turn a blind eye to the corruption and graft evident in 
many business transactions. Some countries--Germany is the most-often 
cited example--even allow companies to take a tax deduction for bribes 
paid to foreign officials as a business expense.
  I call such practices corporate welfare of the worst kind!
  These laws and practices by our closest trading partners clearly put 
our businesses at a disadvantage. I have heard from more than one 
Wisconsin company about international contracts lost as a result of 
some non-American company paying a bribe to a foreign official. These 
lost contracts represent lost employment and revenue opportunities for 
my state, and I am sure for many other states. A 1997 report by the 
Trade Promotion Coordinating Committee estimates that in a single year, 
U.S. firms lost at least 50 international commercial contracts--valued 
at more than $15 billion--as a result of bribes by competitors.
  But with the signing of the OECD Convention last December, the rest 
of the industrialized world, along with several key lesser developed 
countries, is finally beginning to follow America's lead. What this 
convention does is initiate several significant steps to raise the 
standards of our major trading partners to the level established by the 
FCPA.
  Specifically, the convention obligates the parties to criminalize 
bribery of foreign public officials in all branches of government. 
Individuals who bribe public officials will be subject to ``effective, 
proportionate and dissuasive criminal penalties,'' and the parties 
agree to cooperate in investigations and proceedings related to such 
crimes.
  I have been keenly interested in anti-corruption efforts for many 
years. In 1994, I authored a provision to close a loophole in defense 
contracting by outlawing kickback payments in the conduct of offsets--
an issue brought to my attention by a major Wisconsin corporation. I 
have raised the potential problem of corruption in taxpayer-supported 
export promotion programs to a Wisconsin State trade promotion 
commission, the Lucey Commission.
  In 1995, I introduced legislation that would have specifically barred 
the extension of U.S. export financing and trade promotion to U.S. 
subsidiaries of foreign corporations which have not adopted and 
enforced a company-wide anti-bribery code. I also introduced a 
resolution expressing the sense of the Senate that bribery is indeed a 
morally reprehensible business practice and has destabilizing 
consequences for the international trade environment. Finally, I 
offered an amendment to the 1996 State Department authorization bill 
requiring an inter-agency study on bribery and corruption and the 
impact it has on American businesses.
  I believe the Administration's actions with respect to negotiation of 
this convention have been consistent with my intent in all of these 
efforts, as well as the intent of the authors of the 1988 amendments to 
the FCPA. I commend all the individuals involved for their efforts.
  In addition, I commend the Chairman of the Senate Committee on 
Foreign Relations for moving the Committee quickly to recommend 
ratification of this convention.
  I will highlight for my colleagues several provisions in the 
resolution of ratification. Section (c)(1) requires the President to 
submit to Congress an annual report that sets out various details 
regarding ratification, relevant domestic legislation of the parties, 
and enforcement. It also requires a description of the future work of 
the parties to expand the definition of ``foreign public official.'' In 
particular, the President will need to report on the steps taken by the 
Parties to specifically make illegal the bribery of foreign political 
parties or party officials and candidates for public office. This 
provision reflects the strong views of the Committee on Foreign 
Relations that the pernicious practice of bribery also pervades the 
political world, and it too must be stopped.
  Finally, Section (c)(1)(F) requires the President to provide a 
description of U.S. efforts to encourage other non-OECD members to 
sign, ratify, implement, and enforce the treaty. This provision, which 
I encouraged the Committee to include, is important because it 
recognizes that while most major international companies are based in 
OECD members states--the major industrialized nations of the world--it 
is vitally important to include less developed countries in an 
undertaking of this nature. As Secretary of State Madeleine Albright 
noted at the December 1997 signing ceremony for the Convention, 
``supplier nations have a special responsibility to stop this 
destructive practice. * * * At the same time, * * * it is vital that 
nations in the developing world meet their responsibility to act.'' As 
noted in the Committee report, we expect the Executive to work through 
bilateral and multilateral fora to encourage other non-OECD members to 
join this effort by ratifying the treaty and implementing its 
provisions.
  I think those of us that are members of the Foreign Relations 
Committee can help in this effort. For example, at the most recent 
hearing of the Subcommittee on Africa to consider ambassadorial 
nominations, I asked a panel of seven nominees to provide their views 
on the effectiveness of the efforts of their respective, prospective 
host countries' governments to combat corruption, and asked them to 
comment on how they might work individually with these governments to 
become more active in dealing with this issue at a multilateral level. 
These nominees provided quite thoughtful responses, and I certainly 
encourage all of our ambassadors to pursue similar goals in their 
respective countries.
  Mr. President, in sum, I believe this is a vitally important treaty, 
and I am thrilled that the Senate has moved so quickly to ratify it. As 
a direct descendent of Senator Proxmire's Foreign Corrupt Practices 
Act, it represents the best of a long Wisconsin tradition of good 
government and ethics, and I am proud to have been a part of the 
Senate's ratification of this effort.




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