[Congressional Record Volume 151, Number 72 (Thursday, May 26, 2005)]
[Senate]
[Pages S6023-S6027]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LUGAR (for himself and Mr. Hagel):
  S. 1129. A bill to provide authorizations of appropriations for 
certain development banks, and for other purposes; to the Committee on 
Foreign Relations.
  Mr. LUGAR. Mr. President, I rise today to introduce legislation 
authorizing replenishment of funds to three of the five multilateral 
development banks, as requested by the U.S. Department of the Treasury. 
In addition, this legislation includes a long list of reform measures, 
intended to bring about transparency and accountability at all of the 
MDBs--the World Bank, the African Development Bank, the Asian Bank, the 
Inter-American Bank and the European Bank for Reconstruction and 
Development.
  The World Bank, was the first MDB to be established in 1944, followed 
by the African Development Bank, 1964 and the Asian Development Bank, 
1966. The shared original purpose of the three banks was to encourage 
economic development and reduce poverty in geographic regions impacted 
by the respective institutions.
  I support the original operating purpose of the banks. However, I am 
deeply concerned that massive amounts of funds are not utilized as 
originally intended, due to diversion of those funds.
  In 2003, I received information from credible sources within the MDBs 
alleging corruption on various fronts. As a result, I instructed staff 
of the Senate Foreign Relations Committee to commence collecting 
information on the anti-corruption strategies, and successes of each 
bank.
  Based on the initial findings, I launched an investigation, reviewing 
corruption at the banks and their efforts to combat it. To date, I have 
chaired four hearings and sent letters of inquiry regarding individual 
projects to the bank presidents. Committee staff have interviewed 
scores of NGO representatives, bank insiders, academics and others, and 
have visited problem projects in six countries. Far too often, projects 
intended to boost economic development are derailed, and the poor 
suffer, unable to realize projected benefits in quality health care, 
clean water and education.
  While the United States is one of dozens of donors, the financial 
contribution of American taxpayers over the years to these three 
institutions alone

[[Page S6024]]

exceeds $30 billion. The Congress has an obligation to our own 
citizens, as well as the intended beneficiaries of MDB projects, to 
press for transparency and accountability in the banks' operations.
  Through adoption of the package of reforms I propose, the United 
States would set an example for other donor countries, encouraging 
their officials to also press for transparency and accountability.
  I am pleased there is good news to report. The World Bank has 
embarked on an anti-corruption voluntary cooperation initiative, based 
in part on the Pentagon's anticorruption efforts. In addition, leading 
government officials from Italy, Spain and other countries have 
contacted the Committee, asking for more information about our review, 
and comparing strategies on ways of improving bank transparency. 
Finally, we have witnessed incremental improvements of greater 
transparency among the banks as a result of the Committee's ongoing 
work.
  However, there is more to accomplish. This substantive package of 
reforms is based on our findings to date, and the input of many who 
support the original stated purpose of the multilateral development 
banks.
  The Committee's oversight work continues, with the goal of enduring 
results.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1129

       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 ``Development Bank Reform and 
     Authorization Act of 2005''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The United States has strong national security and 
     humanitarian interests in alleviating poverty and promoting 
     development around the world.
       (2) The World Bank, the African Development Bank, the Asian 
     Development Bank, the European Bank for Reconstruction and 
     Development, and the Inter-American Development Bank leverage 
     the resources that the United States and other donors can 
     devote to such goals.
       (3) Contributions from the United States and other donors 
     to the multilateral development banks must be well managed so 
     that the mission of such banks is fully realized and not 
     undermined by corruption. Bribes can influence important bank 
     decisions on projects and contractors and misuse of funds can 
     inflate project costs, cause projects to fail, and undermine 
     development effectiveness.
       (4) Officials of the World Bank have identified corruption 
     as the single greatest obstacle to economic and social 
     development. Corruption undermines development by distorting 
     the rule of law and weakening the institutional foundation on 
     which economic growth depends.
       (5) Officials of the World Bank have determined that the 
     harmful effects of corruption are especially severe on the 
     poor, who are hardest hit by economic decline, are most 
     reliant on the provision of public services, and are least 
     capable of paying the extra costs associated with bribery, 
     fraud, and the misappropriation of economic privileges.
       (6) In hearings before the Foreign Relations Committee of 
     the Senate, it was demonstrated that--
       (A) significant multilateral development bank funding has 
     been lost to corruption and it is difficult to ascertain such 
     amount precisely, in part because the multilateral 
     development banks have not implemented procedures to 
     calculate such amounts, either in the aggregate or on a 
     country basis;
       (B) the multilateral development banks are taking action to 
     address fraud and corruption but additional measures remain 
     to be carried out;
       (C) the capability of anti-corruption mechanisms are not 
     consistent among the multilateral development banks and 
     divergences in anti-corruption policies exist that may hinder 
     coordination on fighting corruption;
       (D) weaknesses in whistleblower policy and practice exist 
     at the multilateral development banks, to varying degree, 
     that impede anti-fraud and anti-corruption efforts;
       (E) greater transparency is necessary to provide effective 
     development aid;
       (F) the Secretary of the Treasury encourages anti-
     corruption efforts at the multilateral development banks and 
     reviews loans made by such banks, however, the United States 
     has limited ability to investigate the misuse of funds from 
     such banks; and
       (G) in some cases, the countries bearing the cost of 
     prosecuting corruption related to the multilateral 
     development banks are the countries that can least afford 
     such costs, for example, the Government of Lesotho incurred 
     considerable expense, despite competing priorities, such as 
     those arising from an HIV/AIDS rate of more than 25 percent 
     in that country, to investigate and prosecute fraud and 
     corruption related to a project that received funding from 
     the World Bank and the World Bank did not contribute money 
     towards the prosecution or investigation.
       (7) The General Accounting Office issued a report in 2001 
     that evaluated the external audit reporting of the African 
     Development Bank, the Asian Development Bank, the European 
     Bank for Reconstruction and Development, and the Inter-
     American Development Bank and a report in 2000 that evaluated 
     the internal controls of the World Bank, and recommended 
     measures to strengthen such audit reporting and controls.
       (8) The International Financial Institutions Advisory 
     Commission (also known as the ``Meltzer Commission'') 
     concluded in 2000, among other things, that--
       (A) pressure to lend for lending's sake is built into the 
     structure of the multilateral development banks;
       (B) although several of the multilateral development banks 
     recognize this problem and have called attention to the need 
     for change, there is, at most, weak counterbalance to the 
     pressure to lend; and
       (C) the multilateral development banks' systems for project 
     evaluation, performance evaluation, and project selection 
     must be improved, and that such evaluation should be a 
     repetitive process spread over time, including many years 
     after final disbursement of funds.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means the Committee 
     on Foreign Relations and the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     International Relations and the Committee on Financial 
     Services of the House of Representatives.
       (2) Group of 7.--The term ``Group of 7'' means Canada, 
     France, Germany, Italy, Japan, the United Kingdom, and the 
     United States.
       (3) Group of 8.--The term ``Group of 8'' means the Group of 
     7 and Russia.
       (4) Multilateral development banks.--The term 
     ``multilateral development banks'' means the African 
     Development Bank, the Asian Development Bank, the European 
     Bank for Reconstruction and Development, the Inter-American 
     Development Bank, the World Bank, and any subsidiary or 
     affiliate of such institutions.
       (5) Person.--The term ``person'' includes a government, a 
     government-controlled entity, a corporation, a company, an 
     association, a firm, a partnership, a society, and a joint 
     stock company, as well as an individual.
       (6) Secretary.--Except as otherwise provided, the term 
     ``Secretary'' means the Secretary of the Treasury.
       (7) World bank.--The term ``World Bank'' means the 
     International Bank for Reconstruction and Development, the 
     International Development Association, the International 
     Finance Corporation, and the Multilateral Investment 
     Guarantee Agency and any subsidiary or affiliate of such 
     institutions.

     SEC. 4. REFORMS.

       (a) Authority.--The Secretary is authorized to seek the 
     creation of a pilot program that establishes an Anti-
     Corruption Trust at the World Bank, as described in this 
     section.
       (b) Purposes.--The purposes of the Anti-Corruption Trust 
     pilot program shall include--
       (1) to assist poor countries in investigations and 
     prosecutions of fraud and corruption related to a loan, 
     grant, or credit of the World Bank; and
       (2) to determine whether such a program should be carried 
     out at other multilateral development banks.
       (c) Repayment of Funds.--If a poor country assesses a fine 
     or receives any renumeration as part of a prosecution paid 
     for with funds from the Anti-Corruption Trust pilot program, 
     such country shall repay the amount received from the Trust 
     until the total amount received by such country is repaid.
       (d) Monitoring.--The Secretary shall be responsible for 
     establishing a system for monitoring the disbursement and use 
     of funds from the Anti-Corruption Trust pilot program and 
     promoting access to such funds by poor countries that are 
     challenged by the high cost of investigating and prosecuting 
     corruption and fraud linked to a loan from, or a project 
     funded by, the World Bank.
       (e) Other Donors.--The Secretary shall encourage other 
     donors to the multilateral development banks to contribute 
     funds to the Anti-Corruption Trust.
       (f) Poor Countries Defined.--In this section, the term 
     ``poor countries'' means countries eligible to borrow from 
     the International Development Association, as such 
     eligibility is determined by gross national product per 
     capita, lack of creditworthiness to borrow on market terms, 
     and good policy performance.
       (g) Reports.--
       (1) Report on implementation.--Not later than September 1, 
     2006, the Secretary shall submit to the appropriate 
     congressional committees a report that describes the actions 
     taken to establish the Anti-Corruption Trust as described in 
     this section.
       (2) Report on evaluation.--Not later than September 1, 
     2007, the Secretary shall submit to the appropriate 
     congressional committees a report that--

[[Page S6025]]

       (A) evaluates the effectiveness of the Anti-Corruption 
     Trust pilot program; and
       (B) evaluates the feasibility of establishing similar 
     trusts at other multilateral development banks.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary such sums as may be 
     necessary for contribution on behalf of the United States to 
     an Anti-Corruption Trust if a pilot program establishing such 
     a Trust is established as described in this section.

     SEC. 5. PROMOTION OF POLICY GOALS AT MULTILATERAL DEVELOPMENT 
                   BANKS.

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

     ``SEC. 1505. PROMOTION OF POLICY GOALS.

       ``(a) Definitions.--In this section:
       ``(1) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means the Committee on 
     Foreign Relations and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Committee on 
     International Relations and the Committee on Financial 
     Services of the House of Representatives.
       ``(2) Multilateral development banks.--The term 
     `multilateral development banks' means the African 
     Development Bank, the Asian Development Bank, the European 
     Bank for Reconstruction and Development, the Inter-American 
     Development Bank, the World Bank, and any subsidiary or 
     affiliate of such institutions.
       ``(3) Person.--The term `person' includes a government, a 
     government-controlled entity, a corporation, a company, an 
     association, a firm, a partnership, a society, and a joint 
     stock company, as well as an individual.
       ``(4) Secretary.--Except as otherwise provided, the term 
     `Secretary' means the Secretary of the Treasury.
       ``(5) World bank.--The term `World Bank' means the 
     International Bank for Reconstruction and Development, the 
     International Development Association, the International 
     Finance Corporation, and the Multilateral Investment 
     Guarantee Agency, and any subsidiary or affiliate of such 
     institutions.
       ``(b) Transparency.--
       ``(1) Publication of statements.--
       ``(A) In general.--Not later than 60 calendar days after a 
     meeting of the board of directors of a multilateral 
     development bank, the Secretary shall provide for publication 
     on the Internet Web site of the Department of the Treasury 
     of--
       ``(i) the justification for each vote by the United States 
     Executive Director at the multilateral development bank on 
     any matter before the board of directors of the bank; and
       ``(ii) any written statement presented at the meeting by 
     such United States Executive Director at the bank 
     concerning--

       ``(I) a lending, grant, or guarantee operation which would 
     result or be likely to result in significant social or 
     environmental effects;
       ``(II) an institutional policy or strategy of the bank that 
     generates significant public interest, including operational 
     policies and sector or thematic strategies;
       ``(III) a project on which a claim has been made to the 
     inspection mechanism of the bank; or
       ``(IV) a case pending before the inspection mechanism of 
     the bank.

       ``(B) Redacted material.--The Secretary may redact material 
     from the material to be made available under subparagraph (A) 
     if the Secretary determines such material is too sensitive 
     for public distribution.
       ``(2) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to inform the bank of the publication policy 
     described in paragraph (3), and use the voice and vote of the 
     United States to implement such policy.
       ``(3) Publication policy.--
       ``(A) In general.--The publication policy referred to in 
     paragraph (2) is a policy that each multilateral development 
     bank shall--
       ``(i) make available to the public, including on the 
     Internet Web site of such bank, the loan, credit, and grant 
     documents, country assistance strategies, sector strategies, 
     and sector policies prepared by the bank that are to be 
     presented for endorsement or approval by the board of 
     directors of the bank, 15 calendar days prior to the date 
     that such document, strategy, or policy will be considered by 
     the board or, if not available at that time, at the time the 
     documents are distributed to the board;
       ``(ii) make available to the public all draft country 
     strategies 120 calendar days prior to consideration of such 
     strategies by the board of directors of the bank;
       ``(iii) make a concerted effort to distribute paper copies 
     of the material referred to in clauses (i) and (ii) to 
     communities affected by the documents referred to in such 
     clauses;
       ``(iv) make available to the public, including on the 
     Internet Web site of such bank, the minutes of a meeting of 
     the board of directors of the bank, not later than 60 
     calendar days after the date that the bank approves the 
     minutes of the board meeting;
       ``(v) make available to the public, including on the 
     Internet Web site of such bank, a summary of discussion of 
     the meeting of the board of directors of the bank, not later 
     than 90 calendar days after the date of the meeting;
       ``(vi) keep a written transcript or electronic recording of 
     each meeting of its board of directors and preserve the 
     transcript or recording for not less than 10 years after the 
     date of such meeting; and
       ``(vii) make available to the public a written transcript 
     or an electronic recording of a meeting of the board of 
     directors of the bank during the 5-year period beginning on 
     the date that is 5 years after the date of the meeting.
       ``(B) Redacted material.--The president of a multilateral 
     development bank may redact material from the material to be 
     made available under subparagraph (A) if the president of a 
     multilateral development bank determines such material is too 
     sensitive for public distribution.
       ``(c) Strengthening Development Bank Administration.--The 
     Secretary shall instruct the United States Executive Director 
     at each multilateral development bank to inform the bank of, 
     and use the voice and vote of the United States to achieve at 
     the bank, the following United States policy goals:
       ``(1) Each multilateral development bank shall require 
     mandatory financial disclosure of any possible or apparent 
     conflict of interest by each employee of the bank, consultant 
     to the bank, or independent expert to the bank whose duties 
     and responsibilities include, through decision or the 
     exercise of judgment, the taking of any action regarding--
       ``(A) contracting or procurement;
       ``(B) developing, administering, managing, or monitoring 
     loans, grants, programs, projects, subsidies, or other 
     conferred financial or operational benefits provided by the 
     bank; or
       ``(C) evaluating or auditing any project, program or 
     entity.
       ``(2) Each multilateral development bank shall reform the 
     `pressure to lend' incentive structure at such bank by 
     linking project design and implementation to staff 
     performance appraisals and shall require that staff increase 
     its focus on monitoring existing loans.
       ``(3) Each multilateral development bank shall continue 
     strengthening whistleblower policies at the bank to the level 
     of emerging standards for national and international law in 
     the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), the 
     Inspector General Act of 1978 (5 U.S.C. App.), and the model 
     approved for member nations by the Organization of American 
     States to implement the Inter-American Convention Against 
     Corruption, done at Caracas on March 29, 1996.
       ``(4) All loan, credit, guarantee, and grant documents and 
     other agreements with borrowers shall include provisions for 
     the financial resources and conditionality necessary to 
     ensure that a person who obtains financial support from a 
     multilateral development bank complies with applicable bank 
     policies and national and international laws in carrying out 
     the terms and conditions of such documents and agreements, 
     including bank policies and national and international laws 
     pertaining to the comprehensive assessment and transparency 
     of the activities supported, such as those concerning public 
     consultation, access to information, public health, safety, 
     and environmental protection.
       ``(5) Each multilateral development bank shall develop 
     clear procedures setting forth the circumstances under which 
     a person will be barred from receiving a loan, contract, 
     grant, or credit from such bank, shall make such procedures 
     available to the public, and shall make the identities of 
     such person available to the public.
       ``(6) Each multilateral development bank shall coordinate 
     policies across international institutions on issues 
     including debarment, cross-debarment, procurement and 
     consultant guidelines, and fiduciary standards so that a 
     person that is debarred by one multilateral development bank 
     is automatically declared ineligible to conduct business with 
     the other multilateral development banks during the specified 
     ineligibility period.
       ``(d) Anti-Corruption Practices.--
       ``(1) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to inform the bank of the United States 
     anti-corruption policy described in paragraph (2), and use 
     the voice and vote of the United States to implement such 
     policy at the bank.
       ``(2) Anti-corruption policy.--The anti-corruption policy 
     referred to in paragraph (1) is the United States policy that 
     a person that receives money from a multilateral development 
     bank shall sign a code of conduct that embodies the standards 
     set out in section 104 of the Foreign Corrupt Practices Act 
     of 1977 (15 U.S.C. 78dd-2), and that prohibits such person 
     from corruptly in furtherance of an offer, payment, promise 
     to pay, or authorization of the payment of any money, or 
     offer, gift, promise to give, or authorization of the giving 
     of anything of value to any official for purposes, directly 
     or indirectly--
       ``(A)(i) influencing any act or decision of such official 
     in his or her official capacity;
       ``(ii) supporting any political party, political entity, 
     any official of a political party, or any candidate for 
     political office;
       ``(iii) inducing such official to do or omit to do any act 
     in violation of the lawful duty of such official; or
       ``(iv) securing any improper advantage; or
       ``(B) inducing such official to use the official's 
     influence with a government or instrumentality thereof, to 
     affect or influence any act or decision of such government or 
     instrumentality,
     in order to assist such person in obtaining or retaining 
     business for or with, or directing business to, any other 
     person.
       ``(e) Strengthening Development Bank Auditing.--

[[Page S6026]]

       ``(1) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to inform the bank of, and use the voice and 
     vote of the United States to achieve at the bank, the 
     following United States policy goals:
       ``(A) Each multilateral development bank shall--
       ``(i) establish an independent Office of an Inspector 
     General, establish or strengthen an independent auditing 
     function at the bank, and require that the Inspector General 
     and the auditing function report directly to the board of 
     directors of the bank; and
       ``(ii) adopt and implement an internationally recognized 
     internal controls framework, allocate adequate staffing to 
     auditing and supervision, require external audits of internal 
     controls, and external and forensic audits of loans where 
     fraud is suspected.
       ``(B) Each multilateral development bank shall establish a 
     plan and schedule for conducting regular, independent audits 
     of internal management controls and procedures for meeting 
     operational objectives, complying with the policies of such 
     bank, and preventing fraud, and making reports describing the 
     scope and findings of such audits available to the public.
       ``(C) Each multilateral development bank shall establish 
     effective procedures for the receipt, retention, and 
     treatment of--
       ``(i) complaints received by the bank regarding fraud, 
     accounting, mismanagement, internal accounting controls, or 
     auditing matters; and
       ``(ii) the confidential, anonymous submission, particularly 
     by employees of the bank, of concerns regarding fraud, 
     accounting, mismanagement, internal accounting controls, or 
     auditing matters.
       ``(D) Each multilateral development bank shall post on the 
     Internet Web site of such bank an annual report containing 
     statistical summaries and case studies of the fraud and 
     corruption cases pursued by the bank's investigations unit.
       ``(f) Compensation Packages for People Negatively Affected 
     by Development Bank Projects.--
       ``(1) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to inform the bank of the United States 
     policy goals related to compensation described in paragraph 
     (2), and use the voice and vote of the United States to 
     implement such policy at the bank.
       ``(2) Compensation policy.--The compensation policy 
     referred to in paragraph (1) is a policy that each 
     multilateral development bank shall, for each project funded 
     by the bank where compensation, including resettlement or 
     rehabilitation assistance, is to be provided to persons 
     adversely impacted by the project, require that an 
     independent mechanism be established for, or included in the 
     design of, the project to receive and adjudicate complaints 
     from a person who is eligible for compensation if such 
     person, not more than 6 years after the date of the 
     completion of the project, finds that the compensation is 
     either inadequate or improperly implemented.
       ``(g) Evaluation.--The Secretary shall instruct the United 
     States Executive Director at each multilateral development 
     bank to inform the bank of, and use the voice and vote of the 
     United States to achieve at the bank, the following goals:
       ``(1) Each multilateral development bank shall make the 
     results of project and non-project operations evaluations 
     available to the public, including through the Internet Web 
     site of the bank and including information on the quantity of 
     projects evaluated per year as a percentage of total projects 
     carried out.
       ``(2) Each multilateral development bank shall require that 
     all loans, grants, credits, policies, and strategies, 
     including budget support, prepared by the bank include 
     specific outcome and output indicators to measure results, 
     and that the indicators and results be published periodically 
     during the execution and at the completion of the appropriate 
     project or program, and at the number of years after such 
     completion determined to be appropriate for such loan, grant, 
     credit, policy, or strategy.
       ``(3) Each multilateral development bank shall promote 
     rigorous evaluation of projects and policies to ensure that 
     the intent of such projects and policies is realized. Such a 
     bank shall favor grants and loans to applicants who agree, in 
     consultation with an independent evaluator or evaluators, to 
     design projects to facilitate the evaluation of outcomes. 
     Rigorous evaluations shall measure the impact on those served 
     by a loan, grant, or credit and shall have a carefully 
     constructed comparison group to help measure the impacts of 
     the loan, grant, or credit.
       ``(h) Qualification Policy.--
       ``(1) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to encourage the bank to implement the 
     qualification policy for borrowing countries described in 
     paragraph (2), and use the voice and vote of the United 
     States to achieve such policy at each bank.
       ``(2) Qualification policy for borrowing countries.--The 
     qualification policy for borrowing countries referred to in 
     paragraph (1) is a policy that requires, in addition to the 
     standards in effect on the date of the enactment of the 
     Development Bank Reform and Authorization Act of 2005, each 
     multilateral development bank to qualify a country for budget 
     support, adjustment lending, policy lending for non-project 
     loans, grants, or credits, or other loans directed to the 
     country's budget based on transparency in procurement and 
     fiduciary requirements and requiring the borrowing country to 
     make its budget available to the public before funds are 
     disbursed to that country.
       ``(i) Microfinance and Business Development.--The Secretary 
     shall inform the management of each multilateral development 
     bank and the public that it is the policy of the United 
     States to encourage microfinance services for the poor and 
     very poor (as that term is defined in section 259 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2214a)), and micro-
     , small-, and medium-enterprise development programs, 
     particularly in a country where the government of such 
     country ranks poorly in the World Bank Institute's governance 
     indicators.
       ``(j) Resource Dependent Country Revenue Transparency.--
       ``(1) Requirements for resource assistance for a 
     government.--The Secretary shall inform the management of 
     each multilateral development bank and the public that it is 
     the policy of the United States that any assistance provided 
     by a such bank including any investment, loan, credit, grant, 
     or guarantee, to a government of a resource-dependent country 
     or for any project located in a resource-dependent country, 
     other than humanitarian assistance, assistance to address 
     HIV/AIDS, tuberculosis, malaria or food aid, may not be 
     provided unless the government has in place or is taking the 
     necessary steps to establish functioning systems for--
       ``(A) accurately accounting for all revenues received by a 
     borrowing government from a person and all payments to a 
     government in connection with the extraction or export of 
     natural resources, such as gas, oil, oil shale, tar sands, 
     coal, any metal, mineral, or timber;
       ``(B) the independent auditing of such payments and such 
     revenues by a credible, independent auditor, applying 
     international auditing standards, and the widespread regular 
     public dissemination of the auditor's findings, including a 
     reconciliation of aggregate payments and revenues;
       ``(C) verifying such revenues against the records for such 
     payments made by each person, including widespread 
     dissemination of aggregate payment information in a manner 
     that protects proprietary information, that observes the law 
     of the borrowing country, and that the person determines does 
     not cause substantial competitive harm;
       ``(D) making available to the public all contracts between 
     the government of such country or any person owned or 
     controlled by such government, and any person that is engaged 
     in the extraction or export of natural resources through a 
     project or program supported by a bank, unless the person 
     determines such disclosure would cause substantial 
     competitive harm;
       ``(E) applying the revenue transparency approach described 
     in this paragraph equally and fully to all extractive 
     industry companies operating in the country, including state-
     owned entities; and
       ``(F) establishing a legal framework for disclosure of 
     payments from a person or contracts with a person and 
     outlining the level and extent of disclosure or payment 
     information by companies in the extractive industries.
       ``(2) Requirements for other natural resource assistance.--
     The Secretary shall inform the management of each 
     multilateral development bank and the public that it is the 
     policy of the United States that any assistance, including 
     any investment, loan, or guarantee, provided by such a bank 
     to private sector sponsors for the extraction or export of 
     natural resources in a resource-dependent country shall only 
     be provided if the government of the country has in place or 
     is taking necessary steps to establish the functioning 
     systems described in subparagraphs (A) through (F) in 
     paragraph (1) and if the private sector sponsors of such 
     projects publicly disclose revenue payments made to the 
     government of such country, in accordance with the laws of 
     such country regarding the required level and extent of such 
     disclosure.
       ``(3) Compliance with transparency guidelines prior to 
     approval of assistance.--In furtherance of the policy 
     described in paragraph (1), not later than 2 years after the 
     date of the enactment of the Development Bank Reform and 
     Authorization Act of 2005, the Secretary shall inform the 
     management of each multilateral development bank and the 
     public that it is the policy of the United States that any 
     assistance by such a bank, including any investment, loan, 
     credit, grant, or guarantee, other than humanitarian 
     assistance, assistance to address HIV/AIDS, tuberculosis, or 
     malaria or to provide food, to any government of a resource-
     dependent country or for any project located in such country, 
     shall not be provided unless the bank, prior to the approval 
     of such assistance, has--
       ``(A) determined that the government has in place the 
     systems described in subparagraphs (A) through (F) of 
     paragraph (1), based on all information that is relevant, 
     applicable and reasonably available to the bank, including, 
     the views of other international financial institutions 
     active in such country and the views of civil society 
     organizations that are active within and outside such 
     country;
       ``(B) determined that private sector sponsors of projects 
     for the extraction and export of natural resources have 
     agreed to publicly

[[Page S6027]]

     disclose revenue payments to host governments; and
       ``(C) made available to the public the findings and 
     conclusions identifying the information taken into 
     consideration in making such determinations and the reasons 
     for such determinations.
       ``(4) Resource-dependent country defined.--In this 
     subsection, the term `resource-dependent country' means a 
     country that has--
       ``(A) an average share of natural resource-derived fiscal 
     revenues of at least 25 percent of the total fiscal revenues 
     during the preceding 3-year period; or
       ``(B) an average share of natural resource export proceeds 
     of at least 25 percent of the total export proceeds during 
     the preceding 3-year period.''.

     SEC. 6. SENSE OF CONGRESS ON THE EXTRACTIVE INDUSTRY 
                   TRANSPARENCY INITIATIVE AND G-8 AGREEMENTS.

       It is the sense of Congress that--
       (1) the President should continue promoting the Extractive 
     Industry Transparency Initiative as one approach to help 
     ensure that the revenues from extractive industries 
     contribute to sustainable development and poverty reduction, 
     as such Initiative is a voluntary initiative intended--
       (A) to promote greater transparency of developing country 
     government revenues and expenditures, procurement, 
     concession-granting systems; and
       (B) to work to recover stolen assets and enforce 
     antibribery laws;
       (2) the United States should encourage the continued work 
     of the G-8 to promote the Extractive Industries Transparency 
     Initiative; and
       (3) the United States should support and encourage the 
     carrying out of the agreements of the G-8 made at the 2004 
     Summit at Sea Island, Georgia, and at the 2003 Summit at 
     Evian, France, to promote transparency in public budgets, 
     including revenues and expenditures, government procurement, 
     public concessions, the granting of licenses with special 
     emphasis on countries with large extractive industries 
     sectors, including the agreements made at the Summit at Sea 
     Island which specifically--
       (A) support the efforts of the Public Expenditure and 
     Financial Accountability program at the World Bank to help 
     developing countries achieve accountability in public finance 
     and expenditure and to extend harmonized approaches to the 
     assessment and reform of their public financial, 
     accountability, and procurement systems;
       (B) invite developing countries to prepare anticorruption 
     action plans to implement the commitments of such countries 
     in regional and international conventions; and
       (C) achieve agreement on full disclosure of the World Bank 
     International Development Association's Country Policy and 
     Institutional Assessment results, with disclosure to begin 
     with the 2005 ratings.

     SEC. 7. REPORTS FROM THE GOVERNMENT ACCOUNTABILITY OFFICE.

       (a) Sense of Congress on Access to Information.--It is the 
     sense of Congress that--
       (1) to evaluate the compliance of the multilateral 
     development banks with the policies of the United States 
     described in section 1505 of the International Financial 
     Institutions Act, as added by section 5 of this Act, and to 
     prepare the reports required by this section, the Comptroller 
     General of the United States should have full and complete 
     access to financial information relating to the multilateral 
     development banks, including information related to the 
     performance, accountability, oversight, financial 
     transactions, organization, and activities of the 
     multilateral development banks;
       (2) the Secretary should seek to conclude memorandums of 
     understanding with the multilateral development banks to 
     ensure that the United States will have access to documents 
     related to information described in paragraph (1); and
       (3) the Secretary of the Treasury should facilitate access 
     by the Comptroller General of the United States to the 
     financial information described in paragraph (1).
       (b) Report on Effectiveness of Multilateral Development 
     Banks.--Not later than 3 years after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall--
       (1) conduct a review of the effectiveness of each 
     multilateral development bank in achieving the mission of 
     such bank as set out in the articles of agreement of such 
     bank, specifically poverty reduction and economic 
     development; and
       (2) submit to the appropriate congressional committees a 
     report on the findings of the review.
       (c) Report on Consistency of Multilateral Development Bank 
     Practices With Statutory Policies.--Not later than 3 years 
     after the date of the enactment of this Act, the Comptroller 
     General of the United States shall prepare and submit to the 
     appropriate congressional committees a report on the extent 
     to which the practices of the multilateral development banks 
     are consistent with the policies of the United States, as 
     expressly contained in Federal law applicable to the 
     multilateral development banks.
       (d) Report on Reforms at the Multilateral Development 
     Banks.--Not later than 1 year after the date of the enactment 
     of this Act, the Comptroller General of the United States 
     shall prepare and submit to the appropriate congressional 
     committees a report on the extent of the implementation of 
     the reforms called for by the Group of 8 or by the Group of 
     7, starting with the 2000 Okinawa Summit, as delineated in 
     communiques, chairman's statements, and other official 
     communication through the summit or finance ministerial 
     processes of the Group of 8 or the Group of 7.

     SEC. 8. CONTRIBUTIONS TO MULTILATERAL DEVELOPMENT BANKS.

       (a) World Bank.--The International Development Association 
     Act (22 U.S.C. 284 et seq.) is amended by adding at the end 
     the following new section:

     ``SEC. 23. FOURTEENTH REPLENISHMENT.

       ``(a) Contribution Authority.--
       ``(1) In general.--The United States Governor of the 
     Association is authorized to contribute on behalf of the 
     United States $2,850,000,000 to the fourteenth replenishment 
     of the resources of the Association.
       ``(2) Subject to appropriations.--Any commitment to make 
     the contribution authorized by paragraph (1) shall be 
     effective only to such extent or in such amounts as are 
     provided in advance in appropriations Acts.
       ``(b) Authorization of Appropriations.--For the 
     contribution authorized by subsection (a), there are 
     authorized to be appropriated, without fiscal year 
     limitation, $2,850,000,000 for payment by the Secretary of 
     the Treasury.''.
       (b) African Development Bank Fund.--The African Development 
     Fund Act (22 U.S.C. 290g et seq.) is amended by adding at the 
     end the following new section:

     ``SEC. 218. TENTH REPLENISHMENT.

       ``(a) Contribution Authority.--
       ``(1) In general.--The United States Governor of the Fund 
     is authorized to contribute on behalf of the United States 
     $407,000,000 to the tenth replenishment of the resources of 
     the Fund.
       ``(2) Subject to appropriations.--Any commitment to make 
     the contribution authorized by paragraph (1) shall be 
     effective only to such extent or in such amounts as are 
     provided in advance in appropriations Acts.
       ``(b) Authorization of Appropriations.--For the 
     contribution authorized by subsection (a), there are 
     authorized to be appropriated, without fiscal year 
     limitation, $407,000,000 for payment by the Secretary of the 
     Treasury.''.
       (c) Asian Development Fund of the Asian Development Bank.--
     The Asian Development Bank Act (22 U.S.C. 285 et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 32. EIGHTH REPLENISHMENT.

       ``(a) Contribution Authority.--
       ``(1) In general.--The United States Governor of the Bank 
     is authorized to contribute on behalf of the United States 
     $461,000,000 to the eighth replenishment of the resources of 
     the Fund.
       ``(2) Subject to appropriations.--Any commitment to make 
     the contribution authorized by paragraph (1) shall be 
     effective only to such extent or in such amounts as are 
     provided in advance in appropriations Acts.
       ``(b) Authorization of Appropriations.--For the 
     contribution authorized by subsection (a), there are 
     authorized to be appropriated, without fiscal year 
     limitation, $461,000,000 for payment by the Secretary of the 
     Treasury.''.

     SEC. 9. ANNUAL REPORTS.

       (a) Initial Report.--Not later than September 1, 2006, the 
     Secretary shall submit a report to the appropriate 
     congressional committees the describes the actions taken by 
     the United States Executive Director at each multilateral 
     development bank to implement the policy goals described in 
     this Act and the amendments made by this Act and any other 
     actions that should be taken to implement such goals.
       (b) Updates.--The Secretary shall submit to the appropriate 
     congressional committees an annual update of the report 
     required by subsection (a) for each of the fiscal years 2007, 
     2008, and 2009.
                                 ______