[Congressional Record Volume 146, Number 98 (Tuesday, July 25, 2000)]
[House]
[Pages H6950-H6953]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTERNATIONAL ANTI-CORRUPTION AND GOOD GOVERNANCE ACT OF 2000
Mr. GALLEGLY. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4697) to amend the Foreign Assistance Act of 1961 to ensure
that United States assistance programs promote good governance by
assisting other countries to combat corruption throughout society and
to promote transparency and increased accountability for all levels of
government and throughout the private sector, as amended.
The Clerk read as follows:
H.R. 4697
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 ``International Anti-
Corruption and Good Governance Act of 2000''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds the following:
(1) Widespread corruption endangers the stability and
security of societies, undermines democracy, and jeopardizes
the social, political, and economic development of a society.
(2) Corruption facilitates criminal activities, such as
money laundering, hinders economic development, inflates the
costs of doing business, and undermines the legitimacy of the
government and public trust.
(3) In January 1997 the United Nations General Assembly
adopted a resolution urging member states to carefully
consider the problems posed by the international aspects of
corrupt practices and to study appropriate legislative and
regulatory measures to ensure the transparency and integrity
of financial systems.
(4) The United States was the first country to criminalize
international bribery through the enactment of the Foreign
Corrupt Practices Act of 1977 and United States leadership
was instrumental in the passage of the Organization for
Economic Cooperation and Development (OECD) Convention on
Combatting Bribery of Foreign Public Officials in
International Business Transactions.
(5) The Vice President, at the Global Forum on Fighting
Corruption in 1999, declared corruption to be a direct threat
to the rule of law and the Secretary of State declared
corruption to be a matter of profound political and social
consequence for our efforts to strengthen democratic
governments.
(6) The Secretary of State, at the Inter-American
Development Bank's annual meeting in March 2000, declared
that despite certain economic achievements, democracy is
being threatened as citizens grow weary of the corruption and
favoritism of their official institutions and that efforts
must be made to improve governance if respect for democratic
institutions is to be regained.
(7) In May 1996 the Organization of American States (OAS)
adopted the Inter-American Convention Against Corruption
requiring countries to provide various forms of international
cooperation and assistance to facilitate the prevention,
investigation, and prosecution of acts of corruption.
(8) Independent media, committed to fighting corruption and
trained in investigative journalism techniques, can both
educate the public on the costs of corruption and act as a
deterrent against corrupt officials.
(9) Competent and independent judiciary, founded on a
merit-based selection process and trained to enforce
contracts and protect property rights, is critical for
creating a predictable and consistent environment for
transparency in legal procedures.
(10) Independent and accountable legislatures, responsive
political parties, and transparent electoral processes, in
conjunction with professional, accountable, and transparent
financial management and procurement policies and procedures,
are essential to the promotion of good governance and to the
combat of corruption.
(11) Transparent business frameworks, including modern
commercial codes and intellectual property rights, are vital
to enhancing economic growth and decreasing corruption at all
levels of society.
(12) The United States should attempt to improve
accountability in foreign countries, including by--
(A) promoting transparency and accountability through
support for independent media, promoting financial disclosure
by public officials, political parties, and candidates for
public office, open budgeting processes, adequate and
effective internal control systems, suitable financial
management systems, and financial and compliance reporting;
(B) supporting the establishment of audit offices,
inspectors general offices, and anti-corruption agencies;
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(C) promoting responsive, transparent, and accountable
legislatures that ensure legislative oversight and whistle-
blower protection;
(D) promoting judicial reforms that criminalize corruption
and promoting law enforcement that prosecutes corruption;
(E) fostering business practices that promote transparent,
ethical, and competitive behavior in the private sector
through the development of an effective legal framework for
commerce, including anti-bribery laws, commercial codes that
incorporate international standards for business practices,
and protection of intellectual property rights; and
(F) promoting free and fair national, state, and local
elections.
(b) Purpose.--The purpose of this Act is to ensure that
United States assistance programs promote good governance by
assisting other countries to combat corruption throughout
society and to improve transparency and accountability at all
levels of government and throughout the private sector.
SEC. 3. DEVELOPMENT ASSISTANCE POLICIES.
(a) General Policy.--Section 101(a) of the Foreign
Assistance Act of 1961 (22 U.S.C. 2151(a)) is amended in the
fifth sentence--
(1) by striking ``four'' and inserting ``five'';
(2) in paragraph (3), by striking ``and'' at the end;
(3) in paragraph (4), by striking the period at the end and
inserting ``; and''; and
(4) by adding at the end the following:
``(5) the promotion of good governance through combating
corruption and improving transparency and accountability.'' .
(b) Development Assistance Policy.--Paragraph (4) of the
third sentence of section 102(b) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2151-1(b)) is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(G) progress in combating corruption and improving
transparency and accountability in the public and private
sector.''.
SEC. 4. DEPARTMENT OF THE TREASURY TECHNICAL ASSISTANCE
PROGRAM FOR DEVELOPING COUNTRIES.
Section 129(b) of the Foreign Assistance Act of 1961 (22
U.S.C. 2151aa(b)) is amended by adding at the end the
following:
``(3) Emphasis on anti-corruption.--Such technical
assistance shall include elements designed to combat anti-
competitive, unethical and corrupt activities, including
protection against actions that may distort or inhibit
transparency in market mechanisms and, to the extent
applicable, privatization procedures.''.
SEC. 5. AUTHORIZATION OF GOOD GOVERNANCE PROGRAMS.
(a) In General.--Chapter 1 of part I of the Foreign
Assistance Act of 1961 (22 U.S.C. 2151 et seq.) is amended by
adding at the end the following:
``SEC. 131. PROGRAMS TO ENCOURAGE GOOD GOVERNANCE.
``(a) Establishment of Programs.--
``(1) In general.--The President is authorized to establish
programs that combat corruption, improve transparency and
accountability, and promote other forms of good governance in
countries described in paragraph (2).
``(2) Countries described.--A country described in this
paragraph is a country that is eligible to receive assistance
under this part (including chapter 4 of part II of this Act)
or the Support for East European Democracy (SEED) Act of
1989.
``(3) Priority.--In carrying out paragraph (1), the
President shall give priority to establishing programs in
countries that received a significant amount of United States
foreign assistance for the prior fiscal year, or in which the
United States has a significant economic interest, and that
continue to have the most persistent problems with public and
private corruption. In determining which countries have the
most persistent problems with public and private corruption
under the preceding sentence, the President shall take into
account criteria such as the Transparency International
Annual Corruption Perceptions Index, standards and codes set
forth by the International Bank for Reconstruction and
Development and the International Monetary Fund, and other
relevant criteria.
``(4) Requirement.--Assistance provided for countries under
programs established pursuant to paragraph (1) may be made
available notwithstanding any other provision of law that
restricts assistance to foreign countries.
``(b) Specific Projects and Activities.--The programs
established pursuant to subsection (a) shall include, to the
extent appropriate, projects and activities that--
``(1) support responsible independent media to promote
oversight of public and private institutions;
``(2) implement financial disclosure among public
officials, political parties, and candidates for public
office, open budgeting processes, and transparent financial
management systems;
``(3) establish audit offices, inspectors general, and
anti-corruption agencies;
``(4) promote responsive, transparent, and accountable
legislatures that ensure legislative oversight and whistle-
blower protection;
``(5) promote legal and judicial reforms that criminalize
corruption and law enforcement reforms and development that
encourage prosecutions of criminal corruption;
``(6) assist in the development of a legal framework for
commercial transactions that fosters business practices that
promote transparent, ethical, and competitive behavior in the
economic sector, such as commercial codes that incorporate
international standards and protection of intellectual
property rights;
``(7) promote free and fair national, state, and local
elections;
``(8) foster public participation in the legislative
process and public access to government information; and
``(9) engage civil society in the fight against corruption.
``(c) Conduct of Projects and Activities.--Projects and
activities under the programs established pursuant to
subsection (a) may include, among other things, training and
technical assistance (including drafting of anti-corruption,
privatization, and competitive statutory and administrative
codes), drafting of anti-corruption, privatization, and
competitive statutory and administrative codes, support for
independent media and publications, financing of the program
and operating costs of nongovernmental organizations that
carry out such projects or activities, and assistance for
travel of individuals to the United States and other
countries for such projects and activities.
``(d) Annual Report.--
``(1) In general.--The President shall prepare and transmit
to the Committee on International Relations of the House of
Representatives and the Committee on Foreign Relations of the
Senate an annual report on--
``(A) projects and activities carried out under programs
established under subsection (a) for the prior year in
priority countries identified pursuant to subsection (a)(3);
and
``(B) projects and activities carried out under programs to
combat corruption, improve transparency and accountability,
and promote other forms of good governance established under
other provisions of law for the prior year in such countries.
``(2) Required contents.--The report required by paragraph
(1) shall contain the following information with respect to
each country described in paragraph (1):
``(A) A description of all United States Government-funded
programs and initiatives to combat corruption and improve
transparency and accountability in the country.
``(B) A description of United States diplomatic efforts to
combat corruption and improve transparency and accountability
in the country.
``(C) An analysis of major actions taken by the government
of the country to combat corruption and improve transparency
and accountability in the country.
``(e) Funding.--Amounts made available to carry out the
other provisions of this part (including chapter 4 of part II
of this Act) and the Support for East European Democracy
(SEED) Act of 1989 shall be made available to carry out this
section.''.
(b) Deadline for Initial Report.--The initial annual report
required by section 131(d)(1) of the Foreign Assistance Act
of 1961, as added by subsection (a), shall be transmitted not
later than 180 days after the date of the enactment of this
Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
California (Mr. Gallegly) and the gentleman from Connecticut (Mr.
Gejdenson) each will control 20 minutes.
The Chair recognizes the gentleman from California (Mr. Gallegly).
General Leave
Mr. GALLEGLY. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on H.R. 4697, as amended.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection.
Mr. GALLEGLY. Mr. Speaker, I yield myself such time as may consume.
Mr. Speaker, I rise in support of H.R. 4697, a bill introduced by the
gentleman from Connecticut (Mr. Gejdenson), the ranking member of the
Committee on International Relations.
This bill amends the Foreign Assistance Act of 1961, to authorize the
President to establish programs that combat corruption in developing
countries by promoting principles of good governance designed to
enhance oversight of private and public programs.
Mr. Speaker, this bill will strengthen our foreign assistance program
and represent a sound investment for the future of good governance of
developing societies.
I urge my colleagues to vote for its adoption.
Mr. Speaker, I reserve the balance of my time.
Mr. GEJDENSON. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I thank the gentleman from California (Mr. Gallegly) for
his kind words and just join him first in
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thanking him for his efforts and others on the committee. I would also
like to thank particularly on my staff, Nisha Desai, that has done so
much work in this area, obviously the gentleman from Arizona (Mr.
Kolbe), the gentlewoman from Florida (Ms. Ros-Lehtinen) and the
gentleman from New York (Chairman Gilman).
When we look at this issue, and it is a critical issue in a number of
areas, and I want to just go through them quickly. One, the estimates
are we have lost $26 billion to bribery with contracts where American
companies were in competition. Unethical business practices jeopardize
fledgling democracies. It destroys the people's support and trust in
their government. It aids criminal transactions.
Vice-President Gore convened a global conference on fighting
corruption. We are now seeing progress. Some of our allies in the G-7
that at one point a number of them provided that one could deduct
bribes given to other government officials are finally moving to end
this practice.
For our part, AID and the administration and Congress have tried to
root out corruption and bribery. It makes a big difference especially
in the poorest countries as they try to establish good governance and
governments that provide the services that their constituents dearly
need.
American leadership has led to a beginning to end these corrupt
practices. This legislation will help focus our foreign assistance and
other government activities to try to work with governments to develop
a procedure to root out corruption and bribery.
I urge support of the bill.
Over the past five years, U.S. firms overseas lost nearly $26 billion
in business opportunities to foreign competitors offering bribes.
Unethical business practices continue to jeopardize our ability to
compete effectively in the international market.
Bribery and other forms of corruption impede governments in their
efforts to deliver basic services to their citizens; they undermine the
confidence of people in democracy; and they are all too often linked
with transborder criminal activity, including drug trafficking,
organized crime, and money laundering.
In 1999, the Vice President convened a Global Conference on Fighting
Corruption where he declared corruption to be a direct threat to the
rule of law and a matter of profound political and social consequence
for our efforts to strengthen democratic governments. It is inarguably
in the U.S. national interest to fight corruption and promote
transparency and good governance. My bill will make anti-corruption
measures a key principle of our Foreign AID program.
By helping these countries root out corruption, bribery and unethical
business practices, we can also help create a level playing field for
U.S. companies doing business abroad.
Then Congress passed the Foreign Corrupt Practices Act in 1977, the
United States became the first industrialized country to criminalize
corruption. It took us nearly two decades to get all the other
industrialized nations to do the same. But American leadership and
perseverance succeeded in getting countries which once offered tax
write-offs for bribes to pass laws that criminalized bribery.
This bill extends our leadership in fighting corruption to the
developing countries. The International Good Governance and Anti-
Corruption Act of 2000 requires that foreign assistance be used to
fight corruption at all levels of government and in the private sector
in countries that have persistent problems with corruption,
particularly where the United States has a significant economic
interest. The bill would also require an annual report on U.S. efforts
in fighting corruption in those countries which have the most
persistent problems. My intent in requiring this report is to get from
the Administration a comprehensive look at all U.S. efforts--diplomatic
as well as through our foreign aid program--in those 15-20 countries
where we have a significant economic interest or a substantial foreign
aid program AND where there is a persistent problem with corruption.
This bill makes an important contribution to pro-actively preventing
crises that would result from stifled economic growth, lack of foreign
investment, and erosion of the public's trust in government. I urge my
colleagues to support H.R. 4697.
Mr. Speaker, I reserve the balance of my time.
Mr. GALLEGLY. Mr. Speaker, I yield 3 minutes to the gentleman from
Arizona (Mr. Kolbe).
Mr. KOLBE. Mr. Speaker, I thank the gentleman from California for
yielding me this time. I again want to thank him for his leadership on
this and certainly the gentleman from Connecticut (Mr. Gejdenson) for
introducing this very important legislation, which I think is really
very much underestimated in terms of its importance.
For decades, the United States has carried the standard in promoting
democracy, market liberalization, economic development abroad.
{time} 2310
To further those goals, we have spent literally billions of dollars
in developing countries in our aid programs. And those aid programs
have made substantial progress. Underdeveloped nations have seen their
economies bloom over the last few decades. We have seen democracy take
root in some of the rockiest soil on this 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 billions of dollars for people who desperately need the
economic benefits those lost dollars might bring to them. But the
corrosive effects of corruption and cronyism are worse. They are often
hidden and ignored.
Government corruption undermines the rule of law, and that is the
very cornerstone of democracy. It undermines economic development,
squandering billions of dollars of investment capital on enrichment of
the few rather than the benefit of the many. Not only that, it
undermines the ability of U.S. business to compete freely and fairly
for foreign government contracts, and that costs U.S. corporations
millions of dollars in lost sales.
This legislation which we are considering here tonight makes anti-
corruption procedures a key principle of our development assistance.
The legislation requires that the Treasury Department incorporate anti-
corruption measures when providing international technical assistance.
The bill also requires the Agency for International Development to
establish programs to battle corruption overseas and includes a
provision of a bill that I have introduced on third-party monitoring to
make sure that contracts are given by development banks and U.S.
government agencies are fully monitored.
This legislation will help to ensure that U.S. funds are going for
the purpose for which they are intended. It will also help to build a
more open and transparent government procurement system in developing
countries and help to eliminate corruption around the world.
It is, simply speaking, a much-needed common sense approach to a very
serious problem. I urge support for this bill and congratulate the
authors of it for bringing it to this body.
Mr. GEJDENSON. Mr. Speaker, I yield myself such time as I may consume
to thank the gentleman from Arizona (Mr. Kolbe) for his efforts here.
Really, his language has strengthened the whole process. It is an
important step forward. It provides for an annual report so we can
focus on those countries that have the greatest problems, and I really
publicly want to thank the gentleman for his work on this bill, as well
as the chairman and other members of the committee.
Mr. Speaker, I have no further requests for time, and I yield back
the balance of my time.
Mr. GALLEGLY. Mr. Speaker, I yield myself such time as I may consume
to again acknowledge the leadership of the gentleman from Arizona (Mr.
Kolbe), and particularly thank the gentleman from Connecticut (Mr.
Gejdenson) on his leadership on this important legislation.
Mr. Speaker, I have no further requests for time, and I yield back
the balance of my time.
The SPEAKER pro tempore (Mr. Tancredo). The question is on the motion
offered by the gentleman from California (Mr. Gallegly) that the House
suspend the rules and pass the bill, H.R. 4697, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
[[Page H6953]]
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