[Congressional Record (Bound Edition), Volume 159 (2013), Part 9]
[Senate]
[Pages 13505-13506]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      MCC COMPACT FOR EL SALVADOR

  Mr. LEAHY. Mr. President, earlier today the Board of Directors of the 
Millennium Challenge Corporation voted to approve a second MCC compact 
for El Salvador. This was expected, and it begins the last phase of 
discussions between the United States and El Salvador on the compact 
which, if finally agreed to and funded, could result in investments 
totaling $277 million from the United States and $85 million from El 
Salvador.
  The compact has three main components, described by the MCC as

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partnering with the private sector to enhance the country's investment 
climate; strengthening the country's future workforce by teaching the 
skills demanded by the labor market; and reducing transportation and 
logistics costs by expanding a highway in the coastal region and 
improving the border crossing into Honduras. I agree that these 
investments would have a positive impact on the lives of the Salvadoran 
people.
  However, I am also aware that some Salvadoran civil society 
organizations have concerns about the potential impact of MCC-financed 
development on the environment and the livelihoods of coastal 
communities. If the compact is funded these organizations should be 
consulted on the design of the details of the compact in a transparent 
and inclusive process particularly relating to environmental and 
regulatory issues, and on the ongoing monitoring of compliance.
  When the law to establish the MCC was written a decade ago it was not 
intended to be just another foreign aid program. I remember, because I 
was involved in writing the law. Rather, it was designed to reward 
countries whose governments are taking effective steps to address key 
issues of governance, particularly combating corruption, strengthening 
the rule of law, and supporting equitable economic growth.
  I supported the first compact for El Salvador, although during the 
design phase I raised concerns about the high level of violent crime 
and corruption in that country and encouraged the MCC and the 
government of El Salvador to consider using a portion of the funds to 
strengthen the judiciary and the rule of law. Regrettably, that was not 
done.
  While El Salvador can point to some success compared to its neighbors 
Honduras and Guatemala, it remains a country of weak democratic 
institutions where the independence of the judiciary has been attacked, 
corruption is widespread, and transnational criminal organizations have 
flourished. Money laundering is a multi-billion dollar scourge in El 
Salvador and other Central American countries, and impunity is the 
norm. The national police is discredited, infiltrated by organized 
crime and distrusted by the public.
  I have urged the MCC, the Department of State, and the government of 
El Salvador during the preliminary discussions and prior to a decision 
to release the funds for a second compact in which the Congress will 
have a say, to address a number of issues which I and others here and 
in El Salvador believe is necessary for the rule of law and economic 
growth in that country.
  First is to significantly strengthen the capacity of the Attorney 
General's office and the police to combat money laundering, which is a 
growing problem and is driving legitimate businesses out of business. 
President Funes recently announced the creation of a special police 
unit for this purpose and I commend him for doing so, but it remains to 
be seen whether such a unit receives the necessary resources to be 
effective, and is not corrupted by the very criminals it is responsible 
for investigating and bringing to justice.
  Second is to respect the independence of the Constitutional Oversight 
Court of the Supreme Court, or the Sala de lo constitucional as it is 
known in Spanish, which is the chamber of the Supreme Court that rules 
on constitutional issues. For the first time since the Peace Accords El 
Salvador has an independent judicial body of magistrates who are widely 
recognized for being honest, who do not show fear or favor, and who 
have consistently ruled in an independent manner. Because their rulings 
have at times gone against the interests of the FMLN governing party 
and at other times against the interests of the opposition ARENA party, 
there have been efforts to replace them with individuals who can be 
manipulated.
  Third is the concern I have raised about some public officials in 
positions of authority who have promoted individuals within the police 
and security forces who have no business being in public office because 
of their involvement in illegal activities.
  An MCC compact is widely regarded as providing a kind of stamp of 
approval by the United States, indicating that the government of the 
compact country has demonstrated a commitment to integrity, to good 
governance and respect for the rule of law, and to addressing the needs 
of its people. This should be doubly so for a second compact. If 
organized crime is operating with impunity, if corruption is pervasive 
including within the police, and if there are people in public office 
who abuse their authority to the detriment of democratic institutions, 
that is not consistent with the intent or purpose of the MCC.
  The first round of El Salvador's next presidential election is 
scheduled for February 2014, and I have no doubt that the Funes 
Government wants that stamp of approval as the election approaches. I 
appreciate that MCC CEO Yohannes, U.S. Ambassador Aponte, and other 
State Department officials have echoed some of the concerns I have 
raised. Today's decision by the MCC Board is an important step, but it 
is not the final step. I urge the government of El Salvador to act 
decisively to address those concerns.

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