[Congressional Record Volume 145, Number 163 (Wednesday, November 17, 1999)]
[Extensions of Remarks]
[Pages E2416-E2417]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        H.R. 3116, THE FAIR COMPETITION IN FOREIGN COMMERCE ACT

                                 ______
                                 

                             HON. JIM KOLBE

                               of arizona

                    in the house of representatives

                       Tuesday, November 16, 1999

  Mr. KOLBE. Mr. Speaker, for decades the United States has carried the 
standard in promoting democracy, market liberalization, and economic 
development abroad. To further those goals, we have spent literally 
billions of dollars in developing countries. And we have made progress. 
Nations have made economic progress over the past few decades and 
democracy is taking root in some of the rockiest soil in the globe. 
Thanks to the creation of the World Trade Organization a few years ago, 
the vast majority of international trade is now governed by clear and 
transparent rules.
  But, as the Asian financial crisis and the theft of billions of 
dollars of IMF money in Russia shows, we still have a long way to go. 
Too many places in the world continue to be held in the grip of 
corruption and cronyism. The obvious impact of these two evils are the 
loss of untold millions, even billions, of dollars. But the corrosive 
effects of corruption and cronyism are worse; they are all too often 
hidden and ignored.
  Government corruption undermines the rule of law--the very 
cornerstone of democracy. Government corruption undermines economic 
development, squandering billions of dollars of investment capital on 
enrichment of the few rather than the benefit of many. Government 
corruption undermines the ability of U.S. business to compete freely 
and fairly for foreign government contracts, costing U.S. corporations 
millions of dollars in lost sales. Government corruption undermines the 
integrity of public service and erodes the confidence of the public in 
their own government. Most important, government corruption steals 
hope--the hope for a better future that all citizens of the world have 
a right to expect. If nurturing democracy and expanding economic 
opportunity continue to be a goal of this country, then eliminating 
corruption and cronyism in government procurement must also be a 
priority. That is why I am proud to join with my colleague, Robert 
Matsui in introducing H.R. 3116, the Fair Competition in Foreign 
Commerce Act. This legislation builds upon the excellent work of the 
Organization on Economic Development and Cooperation which set the 
international standard with its Agreement on Bribery and Corruption. 
The agreement makes it a crime to offer, promise or give a bribe to a 
foreign public official in order to obtain or retain international 
business deals. Sadly, there are today only thirty-four signatory 
countries to this agreement.
  H.R. 3116 complements the work of the OECD, particularly that of the 
Development Assistance Committee Recommendation on Anti-Corruption 
Proposals for Aid-Funded Procurement, approaches the problem of 
corruption in international government Procurement through U.S. foreign 
aid and multilateral financial institutions, It is not a club or a 
blunt instrument, but its says in no uncertain terms that the United 
States will not continue to underwrite corrupt practices in other 
countries.
  Our bill requires the Secretary of the Treasury to develop a plan to 
promote international government procurement reforms using U.S. 
participation in international as the tool. It prohibits U.S. non-
humanitarian foreign assistance to nations that have not demonstrated 
significant progress towards institutionalizing open and transparent 
government procurement practices.
  We want to assist the administration's efforts to promote government 
procurement transparency, whether through the World Trade Organization 
or the Free Trade Area of the Americas. But we also want to ensure that 
transparency in government procurement doesn't take a back seat--that 
is why we require the administration and other nations to focus on 
institutionalizing open and transparent international government 
procurement practices.
  The key to the legislation is building institutions in countries 
which promote and protect

[[Page E2417]]

transparency in government procurement activities. We want nations to 
develop the institutional capacity needed to properly monitor 
international government procurement contracts. Where nations lack such 
capacity, we encourage the use of third-party procurement monitoring to 
ensure openness and transparency in the process. Third-party 
procurement monitoring is a process where an uninvolved third-party is 
hired to monitor every stage of the procurement process. The procedure 
has been used successfully in South America and Africa to fight 
corruption in international government procurement. Third-party 
procurement monitors have the expertise needed to ensure that a project 
is competitively bid and effectively executed. In turn, this expertise 
gets passed on to the host governments, which further institutionalizes 
open procurement practices. The goal should be a process free from 
cronyism and corruption. This legislation will help us accomplish that 
goal.

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