[Congressional Record (Bound Edition), Volume 145 (1999), Part 21]
[Extensions of Remarks]
[Page 30528]
[From the U.S. 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 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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