[House Report 115-298]
[From the U.S. Government Publishing Office]





115th Congress   }                                    {            Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                    {           115-298
======================================================================



 
                 WORLD BANK ACCOUNTABILITY ACT OF 2017

                                _______
                                

 September 7, 2017.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 3326]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3326) to increase accountability, combat 
corruption, and strengthen management effectiveness at the 
World Bank, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``World Bank Accountability Act of 
2017''.

SEC. 2. WITHHOLDING OF FUNDS UNTIL CERTAIN CONDITIONS ARE MET.

  (a) Institutional Reforms.--
          (1) In general.--With respect to each of fiscal years 2018 
        through 2023, in addition to any amounts withheld from 
        disbursement under subsection (b), 15 percent of the amounts 
        provided in appropriations Acts for the International 
        Development Association for the fiscal year--
                  (A) shall be withheld from disbursement until the 
                conditions of paragraph (2) or (3) are satisfied; and
                  (B)(i) shall be disbursed after the conditions of 
                paragraph (2) are satisfied; and
                  (ii) may be disbursed after the conditions of 
                paragraph (3) are satisfied
          (2) Initial conditions.--The conditions of this paragraph are 
        satisfied with respect to the amounts provided in 
        appropriations Acts for a fiscal year if, in the fiscal year, 
        the Secretary of the Treasury reports to the appropriate 
        congressional committees that the International Bank for 
        Reconstruction and Development--
                  (A) is implementing institutional incentives, 
                including through formal staff evaluation criteria, 
                that prioritize poverty reduction, development 
                outcomes, and capable project management over the 
                volume of the Bank's lending and grantmaking;
                  (B) is taking steps to address the management 
                failures described in Inspection Panel Investigation 
                Report 106710-UG, and to prevent their recurrence in 
                countries that are eligible for World Bank support; and
                  (C) is taking measures to strengthen its management 
                of trust funds, with the goal of increasing the 
                accountability of the trust funds for poverty reduction 
                and development outcomes.
          (3) Subsequent conditions.--The conditions of this paragraph 
        are satisfied if the Secretary of the Treasury reports to the 
        appropriate congressional committees, in each of the 3 fiscal 
        years most recently preceding the fiscal year in which the 
        report is made, that the International Bank for Reconstruction 
        and Development has instituted the measures described in 
        paragraph (2) of this subsection and the measures described in 
        subsection (b)(2).
  (b) Governance and Anticorruption Reforms.--
          (1) In general.--With respect to each of fiscal years 2018 
        through 2023, in addition to any amounts withheld from 
        disbursement under subsection (a), 15 percent of the amounts 
        provided in appropriations Acts for the International 
        Development Association for the fiscal year--
                  (A) shall be withheld from disbursement until the 
                conditions of paragraph (2) or (3) are satisfied; and
                  (B)(i) shall be disbursed after the conditions of 
                paragraph (2) are satisfied; and
                  (ii) may be disbursed after the conditions of 
                paragraph (3) are satisfied
          (2) Initial conditions.--The conditions of this paragraph are 
        satisfied with respect to the amounts provided in 
        appropriations Acts for a fiscal year if, in the fiscal year, 
        the Secretary of the Treasury reports to the appropriate 
        congressional committees that the International Bank for 
        Reconstruction and Development--
                  (A) is emphasizing in appropriate operational 
                policies, directives, and country strategies its 
                support for secure property rights, due process of law, 
                and economic freedom as essential conditions for 
                sustained poverty reduction in World Bank borrowing 
                countries;
                  (B)(i) in the preceding fiscal year, has not approved 
                any loans or grants assistance by the Bank to a country 
                designated by the United States as a state sponsor of 
                terrorism; and
                  (ii) is strengthening the ability of Bank-funded 
                projects to undermine violent extremism;
                  (C) is taking steps to conduct forensic audits of 
                projects receiving assistance from the Bank, increase 
                the number of the forensic audits, and strengthen the 
                capacity of the Bank's Integrity Vice Presidency, and 
                that not less than 50 percent of the forensic audits 
                initiated by the Bank in each fiscal year are of 
                projects randomly selected from among International 
                Development Association borrowing countries; and
                  (D) is taking measures to detect and minimize 
                corruption in all World Bank projects involving 
                development policy lending.
          (3) Subsequent conditions.--The conditions of this paragraph 
        are satisfied if the Secretary of the Treasury reports to the 
        appropriate congressional committees, in each of the 3 fiscal 
        years most recently preceding the fiscal year in which the 
        report is made that the International Bank for Reconstruction 
        and Development has instituted the measures described in 
        paragraph (2) of this subsection and the measures described in 
        subsection (a)(2).
  (c) Appropriate Congressional Committees Defined.--In this section, 
the term ``appropriate congressional committees'' means the Committees 
on Financial Services and on Appropriations of the House of 
Representatives and the Committees on Foreign Relations and on 
Appropriations of the Senate.

SEC. 3. REPORTS TO CONGRESS.

  The Chairman of the National Advisory Council on International 
Monetary and Financial Policies shall include in the report required by 
section 1701 of the International Financial Institutions Act for each 
of fiscal years 2018 through 2023 a detailed description of the actions 
undertaken by the International Bank for Reconstruction and Development 
in the fiscal year covered by the report to institute the measures 
described in subsections (a)(2) and (b)(2) of section 2 of this Act.

SEC. 4. OPPOSITION TO WORLD BANK ASSISTANCE FOR GOVERNMENT THAT FAILS 
                    TO IMPLEMENT OR ENFORCE MEASURES REQUIRED UNDER AN 
                    APPLICABLE UNITED NATIONS SECURITY COUNCIL 
                    RESOLUTION.

  The Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is amended 
by adding at the end the following:

``SEC. 73. OPPOSITION TO ASSISTANCE FOR GOVERNMENT THAT FAILS TO 
                    IMPLEMENT OR ENFORCE MEASURES REQUIRED UNDER AN 
                    APPLICABLE UNITED NATIONS SECURITY COUNCIL 
                    RESOLUTION.

  ``The Secretary of the Treasury should instruct the United States 
Executive Director at the International Bank for Reconstruction and 
Development to use the voice and vote of the United States to oppose 
the provision of assistance to the government of a borrowing country of 
the International Development Association if the President of the 
United States determines that the government has knowingly failed to 
implement or enforce sanctions required under an applicable United 
Nations Security Council resolution (as defined in section 3 of the 
North Korea Sanctions and Policy Enhancement Act of 2016 (Public Law 
114-122; 22 U.S.C. 9202)) that is in effect.''.

SEC. 5. EIGHTEENTH REPLENISHMENT OF THE INTERNATIONAL DEVELOPMENT 
                    ASSOCIATION; REDUCTION FROM IDA-17 AUTHORIZED 
                    LEVEL.

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

``SEC. 30. EIGHTEENTH REPLENISHMENT.

  ``(a) Contribution Authority.--The United States Governor of the 
International Development Association may contribute on behalf of the 
United States $3,291,030,000 to the eighteenth replenishment of the 
resources of the Association, subject to obtaining the necessary 
appropriations.
  ``(b) Limitations on Authorization of Appropriations.--In order to 
pay for the contribution provided for in subsection (a), there are 
authorized to be appropriated, without fiscal year limitation, 
$3,291,030,000 for payment by the Secretary of the Treasury.''.

                          Purpose and Summary

    On July 20, 2017, Representative Andy Barr introduced H.R. 
3326, the ``World Bank Accountability Act of 2017''. This 
legislation would withhold a portion of future appropriations 
for the World Bank's International Development Association 
(IDA) until the Secretary of the Treasury reports that the 
World Bank has undertaken reforms to fight corruption, 
strengthen management accountability, and undermine violent 
extremism. The legislation would also authorize the Trump 
Administration's request for a reduced IDA funding level.

                  Background and Need for Legislation

    The goal of H.R. 3326 is to incentivize critical reforms at 
the World Bank (``Bank''), with a particular focus on 
increasing the Bank's accountability for results.
    In 2017, Congress is scheduled to consider the 18th 
replenishment of the Bank's International Development 
Association. IDA is the Bank's concessional lending window for 
the world's poorest countries: unlike the Bank's non-
concessional window, which benefits middle-income nations, 
IDA's resource levels are generally authorized every three 
years and funded through annual appropriations. The 18th 
replenishment--known as IDA-18 encompasses Fiscal Year 2018 
through Fiscal Year 2020.
    Prior to leaving office, President Barack Obama pledged 
$3.871 billion for IDA-18, the same funding level as IDA-17 
before it. Under the Trump Administration's Fiscal Year 2018 
Budget, however, IDA-18 was cut by $580 million, which 
represents 15 percent reduction from Obama Administration-era 
levels.
    Seventy-seven countries, the majority of which are in sub-
Saharan Africa, are currently eligible for IDA assistance based 
on a per capita income of less than $1,215. In its oversight of 
the World Bank, the Committee on Financial Services has found 
that the Bank falls short in its anti-poverty mission. The 
reasons behind this failure include:
     Institutional incentives that prioritize 
generating high loan volume rather than delivering results and 
managing projects capably. According to the Bank's Independent 
Evaluation Group, staff incentives have long been geared toward 
approval of new lending, which can undermine attention to 
development outcomes and learning from project experience. Such 
incentives reflect a ``pressure to lend'' that has been 
documented since at least 1992, in a Bank management review now 
commonly known as the ``Wapenhans Report.''
     Lending to corrupt regimes that abuse their 
citizens and trample on economic freedom for the poor. 
Researchers such as Nobel Economics Laureate Angus Deaton, New 
York University's William Easterly, James Robinson of the 
University of Chicago, and MIT's Daron Acemoglu have found that 
foreign aid makes little positive difference when recipient 
governments are contemptuous of citizens and their rights. 
Appearing before the Financial Services Committee, Sasha 
Chavkin of the International Consortium of Investigative 
Journalists testified that such governments have not been 
shunned by Bank:

          ``We found instead that the Bank repeatedly funded 
        governments that not only failed to adequately resettle 
        communities, but in some cases were accused of human 
        rights abuses such as rape, murder and violent 
        evictions associated with bank projects. We found in 
        several cases that the World Bank continued to bankroll 
        these borrowers even after evidence of these abuses 
        came to light.''

     Insufficient attention paid to auditing Bank 
initiatives for corruption. According to research by Professor 
Jean Ensminger of Caltech, the World Bank has neglected the 
risk that systemic corruption can pose to its projects' 
effectiveness. As Ensminger noted in testimony before the 
Committee:

          ``The problem in many World Bank projects is not 
        limited to a few rogue contractors and project 
        staffers. In systemically corrupt countries like Kenya, 
        it is common for World Bank projects to be captured by 
        the government ministry cartels from which the project 
        staff is seconded.''

    She continued:

          ``Understandably, World Bank operations want to see 
        projects through to completion. Corruption 
        investigations can shut down projects and derail 
        careers. They are also inconvenient for senior 
        management in the Bank who are balancing delicate 
        relationships with their country clients.''

    In light of these problems, H.R. 3326 withholds a share of 
future IDA appropriations unless the Bank implements reforms to 
address shortcomings. The legislation would also enact the 
Trump Administration's proposed 15 percent reduction to IDA-18 
funding commitments. In addition, the legislation would require 
the Bank to strengthen its efforts to undermine violent 
extremism, and it would help prevent the Bank from approving 
any assistance to a country designated as a state sponsor of 
terrorism.
    As reported by the Committee on Financial Services, this 
legislation would further advance U.S. foreign policy goals by 
encouraging the Treasury Department, when evaluating World Bank 
loans, to consider borrowing governments' compliance with 
sanctions on the North Korean regime. The Committee on 
Financial Services has examined troubling cases of developing 
countries' deficient enforcement of such sanctions, and many of 
these countries are eligible for World Bank support.

                                Hearings

    On March 22, 2017, the Monetary Policy and Trade 
Subcommittee held a hearing on matters relating to H.R. 3326 
entitled, ``Examining Results and Accountability at the World 
Bank.''

                        Committee Consideration

    The Committee on Financial Services met in open session on 
July 25, 2017, and ordered H.R. 3326 to be reported favorably 
to the House as amended by a recorded vote of 60 yeas to 0 nays 
(Record vote no. FC-71), a quorum being present. Before the 
motion to report was offered, the Committee adopted an 
amendment in the nature of a substitute offered by Mr. Barr by 
voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House as amended. The motion 
was agreed to by a recorded vote of 60 yeas to 0 nays (Record 
vote no. FC-70), a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 3326 
will protect taxpayer dollars by making IDA appropriations 
contingent on implementing accountability measures at the Bank.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 21, 2017.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3326, the World 
Bank Accountability Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sunita 
D'Monte.
            Sincerely,
                                              Keith Hall, Director.
    Enclosure.

H.R. 3326--World Bank Accountability Act of 2017

    H.R. 3326 would authorize the appropriation of almost $3.3 
billion for the United States' share of the eighteenth general 
replenishment of the resources of the International Development 
Association (IDA; a part of the World Bank). That replenishment 
agreement covers the three-year period ending in June 2020.
    Based on information from the Department of the Treasury, 
CBO expects that the U.S. commitment would be funded with 
annual appropriations over the 2018-2020 period. The President 
has requested $1,097 million for the first tranche in 2018, and 
CBO estimates that the remainder would be provided in two 
additional tranches of $1,097 million each in 2019 and 2020. In 
total, CBO estimates that implementing H.R. 3326 would cost 
about $3.3 billion over the 2018-2022 period, assuming 
appropriation of the specified amounts.
    Enacting H.R. 3326 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting H.R. 3326 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2028.

----------------------------------------------------------------------------------------------------------------
                                                          By fiscal year, in millions of dollars--
                                          ----------------------------------------------------------------------
                                             2017      2018      2019      2020      2021      2022    2017-2022
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level............         0     1,097     1,097     1,097         0         0      3,291
Estimates Outlays........................         0     1,097     1,097     1,097         0         0      3,291
----------------------------------------------------------------------------------------------------------------

    Other provisions of the bill would require the Secretary of 
the Treasury to withhold amounts from IDA pending certain 
institutional reforms, to report to the Congress on the 
implementation of those reforms, and to oppose any assistance 
from the World Bank to governments that refuse to implement or 
enforce sanctions required under certain U.N. resolutions. CBO 
estimates that implementing those requirements would cost less 
than $500,000 over the 2018-2022 period; such spending would be 
subject to the availability of appropriated funds.
    H.R. 3326 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Sunita D'Monte. 
The estimate was approved by Theresa Gullo, Assistant Director 
for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed 
rulemakings: The Committee estimates that the bill requires no 
directed rulemakings within the meaning of such section.

             Section-by-Section Analysis of the Legislation


Sec. 1: Short title

    The Act may be cited as the ``World Bank Accountability Act 
of 2017.''

Sec. 2: Withholding of funds until certain conditions are met

    For each of fiscal years 2018 through 2023, 15 percent of 
appropriated funds for the World Bank's IDA shall be withheld 
until the Secretary of the Treasury reports to the appropriate 
Congressional committees that:
          (1) The Bank is implementing institutional incentives 
        that prioritize poverty reduction, development 
        outcomes, and capable project management over the 
        Bank's lending volume;
          (2) The Bank is taking, or has completed, steps to 
        address the management failures identified from the 
        Uganda Transport Sector Development Project scandal, 
        and is preventing those failures' recurrence in other 
        countries eligible for Bank support; and
          (3) The Bank is strengthening its management of trust 
        funds, with the goal of increasing their accountability 
        for poverty reduction and development outcomes.
    An additional 15 percent of appropriations shall be 
withheld until the Secretary reports that:
          (1) The Bank is emphasizing its support for secure 
        property rights, due process of law, and economic 
        freedom as essential to sustained poverty reduction in 
        appropriate Bank policies, directives, and country 
        strategies;
          (2) The Bank has not approved any assistance in the 
        previous fiscal year for a country designated by the 
        U.S. as a state sponsor of terrorism, and is 
        strengthening its projects' ability to undermine 
        violent extremism;
          (3) The Bank is taking steps to conduct randomized 
        forensic project audits, increase the number of such 
        audits, and strengthen the capacity of the relevant 
        Bank division that oversees them; and
          (4) The Bank is working to detect and minimize 
        corruption in all projects involving development policy 
        lending (also referred to as ``budget support'').
    If Treasury cannot report that the Bank has met either, or 
both, of the above sets of reforms in a fiscal year, the 
applicable portion of appropriations are withheld, and cannot 
be disbursed unless the Bank later meets both sets of reforms 
successfully for three consecutive years. For reporting 
purposes, the appropriate Congressional committees are the 
House Committees on Financial Services and Appropriations, and 
the Senate Committees on Foreign Relations and Appropriations.

Sec. 3: Reports to Congress

    The Treasury Secretary shall include in the FY18 through 
FY23 annual reports of the National Advisory Council on 
International Monetary and Financial Policies a detailed 
description of the World Bank's actions to implement the 
reforms described in Sec. 2.

Sec. 4: Eighteenth replenishment of the International Development 
        Association; reduction from IDA-17 authorized level

    In accordance with the Trump administration's FY18 budget 
request, this section limits U.S. contributions to IDA-18 to 
$3.29 billion, which represents a $580 million reduction (15 
percent) from IDA-17.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                      BRETTON WOODS AGREEMENTS ACT




           *       *       *       *       *       *       *
SEC. 73. OPPOSITION TO ASSISTANCE FOR GOVERNMENT THAT FAILS TO 
                    IMPLEMENT OR ENFORCE MEASURES REQUIRED UNDER AN 
                    APPLICABLE UNITED NATIONS SECURITY COUNCIL 
                    RESOLUTION.

  The Secretary of the Treasury should instruct the United 
States Executive Director at the International Bank for 
Reconstruction and Development to use the voice and vote of the 
United States to oppose the provision of assistance to the 
government of a borrowing country of the International 
Development Association if the President of the United States 
determines that the government has knowingly failed to 
implement or enforce sanctions required under an applicable 
United Nations Security Council resolution (as defined in 
section 3 of the North Korea Sanctions and Policy Enhancement 
Act of 2016 (Public Law 114-122; 22 U.S.C. 9202)) that is in 
effect.
                              ----------                              


               INTERNATIONAL DEVELOPMENT ASSOCIATION ACT



           *       *       *       *       *       *       *
SEC. 30. EIGHTEENTH REPLENISHMENT.

  (a) Contribution Authority.--The United States Governor of 
the International Development Association may contribute on 
behalf of the United States $3,291,030,000 to the eighteenth 
replenishment of the resources of the Association, subject to 
obtaining the necessary appropriations.
  (b) Limitations on Authorization of Appropriations.--In order 
to pay for the contribution provided for in subsection (a), 
there are authorized to be appropriated, without fiscal year 
limitation, $3,291,030,000 for payment by the Secretary of the 
Treasury.

                            ADDITIONAL VIEWS

    H.R. 3326, the World Bank Accountability Act of 2017, 
authorizes U.S. participation in the eighteenth replenishment 
of the International Development Association or IDA. IDA is the 
window of the World Bank that provides grants and highly 
concessional loans to the world's 77 poorest countries, which 
are home to more than 450 million people living in extreme 
poverty.
    We fully support the bill's authorization of a U.S. 
contribution of $3.29 billion to multilateral development 
efforts for these poor countries. IDA is the largest source of 
development finance in the world's poorest countries, and it 
operates effectively across a range of sectors, including basic 
health, primary education, clean water and sanitation, and 
infrastructure.
    We also support this legislation because we view it as an 
important marker of U.S. international engagement from this 
Committee, which has not in recent years demonstrated a great 
deal of interest in global economic cooperation.
    In fact, over the past several years, the Obama 
Administration requested legislation to authorize U.S. 
participation in the IDA-17 replenishment as well as 
replenishment rounds for the concessionary windows of the 
African Development Bank and the Asian Development Bank--and 
the Committee never acted on these requests. Also, for five 
years the Committee refused to approve the 2010 IMF quota 
reform agreement that had been initiated by the Bush 
Administration as a critical effort to preserve the legitimacy 
of the IMF and keep emerging economies firmly anchored in the 
multilateral system that the U.S. helped design. U.S. inaction 
on the agreement not only put the world economy and financial 
system at risk, but it also undermined the U.S. reputation for 
leadership in the global economic system.
    Therefore, we joined our Republican colleagues in favorably 
reporting H.R. 3326 out of Committee in an effort to reinforce 
the importance of U.S. leadership at the international 
financial institutions, which have long provided the foundation 
of a stable rules-based international order and have helped 
advance strategic U.S. interests in countries and regions at 
critical moments.
    There are provisions in the bill, however, that we believe 
are misguided and counterproductive, and we strongly oppose 
them. Specifically, the bill calls for the withholding of up to 
30% of the U.S. contribution to IDA in any year, over a six-
year period, in which the Secretary of Treasury cannot certify 
to Congress that the Bank has adopted or is taking steps to 
implement two sets of reforms mandated in the bill.
    Furthermore, if Treasury cannot report that the Bank has 
met either or both sets of reforms in a given fiscal year, not 
only would the applicable portion of U.S. funds be withheld, 
but the bill would then make it more difficult for the Bank to 
successfully meet both sets of reforms in subsequent years.
    This notion that the United States can impose its will 
unilaterally on the World Bank reflects a fundamental 
misunderstanding about how multilateralism works. Achieving 
important U.S.-led reforms at the multilateral development 
banks has always depended on the ability of the U.S. to build 
consensus among other shareholders at the institutions, which, 
in turn, relies on U.S. leadership, influence, and a sense of 
goodwill.
    U.S. policy goals at these institutions should be advanced 
on their merits, not based on a threat of withholding funds. We 
also object to the bill's approach to reform on moral grounds, 
since withholding U.S. contributions to IDA would punish 
millions of children and other vulnerable people in Africa, 
Latin America and Asia who live in absolute, unremitting, 
degrading poverty. It would undermine IDA's ability to help 
people experiencing famine and refugees in fragile and 
conflict-ridden states, who go without food, sanitation, or 
basic medical attention, often leading to death.
    We would note that any funds the U.S. might withhold from 
the Bank would simply add to U.S. arrears to the Bank. The U.S. 
has approximately $1.12 billion in previous unmet commitments 
to IDA, and, according to Treasury, these arrears damage U.S. 
credibility and, in fact, undermine our ability to advance U.S. 
policy and reform objectives.
    For many years, this Committee has worked in a bipartisan 
fashion to achieve a number of important reforms at the World 
Bank, including the creation of the Inspection Panel, an 
independent accountability mechanism that investigates claims 
by citizens of the Bank's failure to follow its own policies 
and procedures. We have also successfully achieved much more 
transparency and disclosure of information from the World Bank. 
We successfully pushed for debt relief for impoverished 
countries. And we have also pressed for less burdensome 
conditionality and more attention to the social dimension that 
must be present when decisions about development assistance are 
made.
    We were able to successfully advance these policy goals 
through serious negotiations with the Department of Treasury as 
well as direct and sustained engagement with World Bank 
management itself.
    In a recent annual report to Congress on U.S. participation 
in the international financial institutions, the Treasury 
Secretary stated that, ``The United States needs to maintain 
its leadership position in the international financial 
institutions if they are to be effective vehicles for 
supporting U.S. interests and responsive to U.S. calls for 
reform.''
    We support this legislation because we support the 
authorization for the United States to participate in the IDA-
18 replenishment. We also believe that international 
cooperation through U.S. leadership at the international 
financial institutions helps advance U.S. national security, 
economic interests and values.
    But we strongly oppose the provisions in the bill that 
place conditions on U.S. contributions to IDA because we do not 
believe this is an effective approach to reform, and, more 
importantly, because it could lead to a situation in which the 
United States would undermine IDA's critical efforts to promote 
growth and reduce extreme poverty in the world.
                                   Maxine Waters.
                                   Stephen F. Lynch.
                                   Ed Perlmutter.
                                   Nydia M. Velazquez.
                                   Gwen Moore.
                                   Juan Vargas.
                                   Charlie Crist.
                                   Daniel T. Kildee.
                                   Carolyn B. Maloney.
                                   Al Green.
                                   Gregory W. Meeks.
                                   Keith Ellison.
                                   Denny Heck.

                                  [all]