[Congressional Record (Bound Edition), Volume 156 (2010), Part 11]
[House]
[Pages 15766-15768]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     OVERSEAS CONTRACTOR REFORM ACT

  Mr. CLAY. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 5366) to require the proposal for debarment from contracting with 
the Federal Government of persons violating the Foreign Corrupt 
Practices Act of 1977.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5366

       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 ``Overseas Contractor Reform 
     Act''.

     SEC. 2. REQUIREMENT TO PROPOSE FOR DEBARMENT PERSONS 
                   VIOLATING THE FOREIGN CORRUPT PRACTICES ACT.

       (a) Requirement To Propose for Debarment.--Unless waived by 
     the head of a Federal agency under subsection (b), any person 
     found to be in violation of the Foreign Corrupt Practices Act 
     of 1977 shall be proposed for debarment from any contract or 
     grant awarded by the Federal Government within 30 days after 
     a final judgment of such violation.
       (b) Waiver.--The head of a Federal agency may waive this 
     section for a Federal contract or grant. Any such waiver 
     shall be reported to Congress by the head of the agency 
     concerned within 30 days from the date of the waiver, along 
     with an accompanying justification.
       (c) Final Judgment.--For purposes of this section, a 
     judgment becomes final when all

[[Page 15767]]

     appeals of the judgment have been finally determined, or all 
     time for filing such appeals has expired.
       (d) Definitions.--In this section:
       (1) Contract.--The term ``contract'' means a binding 
     agreement entered into by a Federal agency for the purpose of 
     obtaining property or services.
       (2) Person.--The term ``person'' includes--
       (A) an individual;
       (B) a partnership; and
       (C) a corporation.
       (3) Foreign corrupt practices act of 1977.--The term 
     ``Foreign Corrupt Practices Act of 1977'' means--
       (A) section 30A of the Securities Exchange Act of 1934 (15 
     U.S.C. 78dd-1); and
       (B) sections 104 and 104A of the Foreign Corrupt Practices 
     Act (15 U.S.C. 78dd-2).

     SEC. 3. GOVERNMENTAL POLICY.

       It is the policy of the United States Government that no 
     Government contracts or grants should be awarded to 
     individuals or companies who violate the Foreign Corrupt 
     Practices Act of 1977.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Missouri (Mr. Clay) and the gentleman from Utah (Mr. Chaffetz) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Missouri.


                             General Leave

  Mr. CLAY. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Missouri?
  There was no objection.
  Mr. CLAY. I yield myself such time as I may consume.
  Mr. Speaker, contractors have been tarnishing the name of our good 
country by bribing foreign officials with the very tax dollars our 
country pays them. In our effort to win the hearts and minds of the 
people of foreign countries, we must show that we take integrity and 
honesty seriously. As such, we must take action against those 
contractors who hinder our efforts and inappropriately utilize the 
money we pay them. H.R. 5366, the Overseas Contractor Reform Act, will 
provide the government with the means to appropriately respond to those 
contractors.
  H.R. 5366 was introduced by my colleague, Representative Peter Welch, 
on May 20, 2010, and referred to the Committee on Oversight and 
Government Reform, where we worked hard to get this important 
legislation to the House floor.
  This bill requires that any person convicted of violating the Foreign 
Corrupt Practices Act of 1977 be proposed for debarment from any 
further contracts or grants with the Federal Government within 30 days 
after final judgment of the violation. The bill defines ``final 
judgment'' as occurring when all appeals of the judgment have been 
determined or all the time for filing such appeals has expired, so 
there is no question regarding the person's guilt.
  Additionally, this bill authorizes the head of a Federal agency to 
issue a waiver, allowing contracts or grants to be awarded to the 
contractors, but the agency head must justify the decision and report 
the waiver and accompanying justification to Congress within 30 days.

                              {time}  1200

  This bill also makes it Federal policy that no more contracts or 
grants should be awarded to any individuals or companies who violate 
the Foreign Corrupt Practices Act. This policy statement sends a strong 
message to all that such waste, fraud, and abuse will not be tolerated.
  This bill helps fight waste of tax dollars, protects the image of the 
country, and helps ensure fair play in competition for contracts. H.R. 
5366 is a common sense, good government bill, and I encourage my 
colleagues to join me in supporting it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CHAFFETZ. Mr. Speaker, I yield myself such time as I may consume.
  I rise today in support of H.R. 5366, the Overseas Contractor Reform 
Act. The Committee on Oversight and Government Reform over the years 
has uncovered numerous instances in which government continued doing 
business with bad actors. This legislation will augment the U.S. 
government's efforts to combat waste, fraud, and abuse in contracting. 
It will ensure that we are awarding contracts and grants only to 
parties with integrity.
  The bill requires a Federal agency to propose for debarment from 
receiving any new grants or contracts a person or entity found in 
violation of the Foreign Corrupt Practices Act of 1977.
  The Foreign Corrupt Practices Act makes it a crime to offer a bribe 
to a foreign official for the purpose of obtaining or retaining 
business from a foreign government.
  Since the passage of the Foreign Corrupt Practices Act, the fraud 
section of the Department of Justice has prosecuted individuals and 
entities accused of bribing foreign officials. These parties are now 
subject to fines, and although proposed debarment was already a 
possible consequence, this bill sends the message that Congress, 
without question, desires agencies to take administrative action 
against parties convicted of violating the Foreign Corrupt Practices 
Act.
  This bill also provides agencies with a modicum of flexibility. If 
the agency head finds it is in the best interest of the government to 
waive the requirement for proposed debarment, a waiver is permissible. 
However, the agency head must report the waiver to Congress and provide 
a justification.
  Mr. Speaker, I urge my colleagues to support H.R. 5366.
  Mr. DINGELL. Mr. Speaker, I rise in support of H.R. 5366, the 
Overseas Contracting Reform Act, which provides an important and 
necessary recourse for our government when contractors violate federal 
law. Specifically, the legislation requires the automatic proposal for 
debarment of any contractor found to be in violation of the Foreign 
Corrupt Practices Act, FCPA, which prohibits American companies and 
individuals from unlawfully influencing foreign officials.
  I commend the sponsor of this legislation, Representative Peter Welch 
of Vermont, for his work on this matter. Since the brutal shooting 
incident at Baghdad's Nisour Square in which guards employed by the 
private security contractor Blackwater Worldwide, now Xe Services, 
allegedly shot and killed 17 innocent and unarmed Iraqi civilians, I 
have worked to bring such contractors within the purview of U.S. law 
and to hold them accountable for their actions. Unfortunately, even 
after the Blackwater shooting gained considerable public attention, 
reports indicated that not only did contractors remain a significant 
part of the U.S. presence in Iraq and Afghanistan, but they also 
continued to serve in inappropriate roles such as conducting 
interrogations of suspected terrorists. All the while, the laws which 
govern them remain vague.
  As many of my colleagues and I have noted for several years, there is 
an egregious lack of both accountability and transparency for such 
firms and their employees. Although the Federal Acquisition Regulation, 
FAR, enables government officials to initiate suspension and debarment 
proceedings where the contractor has committed an offense ``that 
seriously and directly affects the present responsibility of a 
government contractor or subcontractor,'' among other things, no 
official used this authority to initiate such proceedings with 
Blackwater. Moreover, as a recent Senate Armed Services Committee 
investigation underscores, Blackwater was able to secure new contracts 
by creating several dozen subsidiaries for the sole purpose of 
concealing its parent companies' identity. Contracting officers claim 
they weren't even aware that they were awarding contracts to a company 
under Blackwater's control.
  It is clear that the existence of authority to debar under the FAR 
is, in itself, insufficient to trigger debarment proceedings, perhaps 
because agency officials are unwilling to initiate debarment 
proceedings even when just cause is shown. That is why H.R. 5366 is an 
important piece of legislation. It will provide that companies 
automatically be proposed for debarment if they are found to be in 
violation of the FCPA. The Department of Justice is investigating 
whether Blackwater employees bribed Iraqi officials to allow them to 
continue doing business in Iraq, an obvious violation of the FCPA. 
Under H.R. 5366, if Blackwater is found guilty, the firm will 
automatically be proposed for debarment.
  Mr. Speaker, all loopholes for private security contractors working 
overseas should have been closed long ago. Contractors and their 
employees must be held accountable for their actions overseas, 
especially during war time. This is not just important for the 
America's reputation for upholding justice and the rule of law, but for 
the safety and security of our

[[Page 15768]]

troops and civilians serving overseas. Failing to do so undermines 
American national security interests. I urge my colleagues to join me 
in voting for H.R. 5366.
  Mr. BLUMENAUER. Mr. Speaker, in today's wars, military contractors 
play a larger role than ever before. As we have seen over the past 
decade, our laws have been inadequate to curb what became a free-for-
all for contractors overseas. That is why I support efforts like this 
one, to define and reign in unacceptable and damaging contractor 
abuses.
  In my own state of Oregon, 26 Oregon National Guardsmen have filed 
suit against war contractor KBR, formerly a subsidiary of Halliburton, 
alleging that KBR personnel knew a highly toxic chemical was present at 
Iraqi facilities in 2003, but that they waited months before bringing 
it to the attention of the U.S. military. By that time, unsuspecting 
members of the Oregon, Indiana, and West Virginia National Guard had 
already been exposed.
  Even more troubling, if KBR is found to be at fault the company may 
never have to pay for its actions. A still-classified clause in KBR's 
contract may result in the U.S. Army--and U.S. taxpayers--paying for 
the harm done by contractors.
  This is just one instance of past contractor actions having continued 
repercussions today. I will continue to work for swift congressional 
action that will hold contractors accountable, strengthen oversight and 
protect both our troops and the taxpayers.
  I strongly support Mr. Welch's efforts here today, and those who help 
tackle this problem on behalf of our brave men and women in uniform.
  Mrs. McCARTHY of New York. Mr. Speaker, I rise in support of H.R. 
5366, the Overseas Contractor Reform Act. The Overseas Contractor 
Reform Act will keep any person found to be in violation of the Foreign 
Corrupt Practices Act of 1977 from receiving a government contract or 
grant. It is important that we ensure that any individual that receives 
a contract from the Federal Government, and therefore is a de facto 
representative of the people of the United States, is of the highest 
moral standard and complies with all applicable laws. Improving our 
ability to effectively oversee our foreign contractors will yield 
numerous benefits. I look forward to continuing to work with my 
colleagues to improve our contractor system and curtail abuses and 
excesses when they are found.
  Mr. CHAFFETZ. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. CLAY. Mr. Speaker, I urge my colleagues to join me in supporting 
this measure, and I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Missouri (Mr. Clay) that the House suspend the rules and 
pass the bill, H.R. 5366.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. CLAY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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