[Congressional Record (Bound Edition), Volume 146 (2000), Part 11]
[House]
[Pages 16221-16224]
[From the U.S. 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;

[[Page 16222]]

       (B) supporting the establishment of audit offices, 
     inspectors general offices, and anti-corruption agencies;
       (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

[[Page 16223]]

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 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

[[Page 16224]]

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.

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