SEC. 201. SHORT TITLE.
This title may be cited as the `International Anti-Corruption and Good Governance Act of 2000'.

SEC. 202. FINDINGS AND PURPOSE.

(a) FINDINGS- 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; 

(B) supporting the establishment of audit  offices, inspectors general offices, third party monitoring of  government procurement processes, 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 title 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. 203. DEVELOPMENT ASSISTANCE POLICY.

(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) by striking `and' at the end of paragraph (3);
(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- Section 102(b) of the Foreign  Assistance Act of 1961 (22 U.S.C. 2151-1(b)) is amended--

 (1) in paragraph (4)-- (A) by striking `and' at the end of subparagraph  (E);
 (B) in subparagraph (F), by striking the period  at the end and inserting `; and'; and  (C) by adding at the end the following: `(G) progress in combating corruption and  improving transparency and accountability in the public and private  sector.'; and (2) by adding at the end the following:  `(17) Economic reform and development of effective  institutions of democratic governance are mutually reinforcing. The  successful transition of a developing country is dependent upon the  quality of its economic and governance institutions. Rule of law,  mechanisms of accountability and transparency, security of person, property, and investments, are but a few of the critical governance and economic reforms that underpin the sustainability of broad-based economic growth. Programs in support of such reforms strengthen the capacity of people to hold their governments accountable and to create economic opportunity.'.

SEC. 204. 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. 205. 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.), as amended by sections 105 and 107, is  further amended by adding at the end the following:  `SEC. 133. 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) RELATION TO OTHER LAWS-
`(A) IN GENERAL- 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. Assistance provided under a  program established pursuant to paragraph (1) for a country that would  otherwise be restricted from receiving such assistance but for the  preceding sentence may not be provided directly to the government of  the country.
`(B) EXCEPTION- Subparagraph (A) does not apply  with respect to--
`(i) section 620A of this Act or any comparable  provision of law prohibiting assistance to countries that support  international terrorism; or  `(ii) section 907 of the Freedom for Russia and  Emerging Eurasian Democracies and Open Markets Support Act of 1992.  `(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) support the establishment of audit offices,  inspectors general offices, third party monitoring of government  procurement processes, and anti-corruption agencies;  `(4) promote responsive, transparent, and accountable  legislatures and local governments that ensure legislative and local  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 Secretary of State, in consultation  with the Secretary of Commerce and the Administrator of the United  States Agency for International Development, shall prepare and  transmit to the Committee on International Relations and the Committee  on Appropriations of the House of Representatives and the Committee on  Foreign Relations and the Committee on Appropriations 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 133(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.

CONGRESSIONAL RECORD
October 5, 2000  -  Page  H 8893

Mr. GEJDENSON. Reclaiming my time under my reservation, if I could  just add, also, I would like to thank the gentleman from Arizona (Mr.  Kolbe), the gentlewoman from Florida (Ms. Ros-Lehtinen) and the  chairman, as well, for their work on the anti-corruption portions of  this conference report. This is an important piece of legislation.  America has lost as much as $26 billion to foreign bribes. We have now  got our G-8 partners joining with us to fight corruption and bribery.  This legislation will help build strong democracies globally.

* 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 trans-border 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.
* When 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 Anti-Corruption and Good Governance 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.
* Among other things, the act establishes anti-corruption and good governance programs as priorities within our foreign assistance
 programs. The act underscores the importance of our efforts to combat corruption and promote good governance overseas.
* It will also allow administrations some flexibility in those relatively rare circumstances where developments on the ground, such as a coup or an economic crisis, would otherwise restrict it from acting through nongovernmental organizations.
* Thus, provisions of law that would otherwise restrict assistance to foreign countries are made inapplicable, with certain exceptions, to assistance provided in furtherance of this act. Assistance that  would have been prohibited except for this authority cannot be provided directly to the government of such a country, but can be provided to the government through grants and contracts with nongovernmental organizations.

HR 1143 passed House on April 13, 1999 (without Title II)  Passed Senate on Oct 3, 2000 (amended as above by Helms Amendment No. 4287)

Signed into Law by the President on Oct. 17, 2000