printable banner

U.S. Department of State - Great Seal

U.S. Department of State

Diplomacy in Action

Fourth Report to Congress Pursuant to the International Anticorruption and Good Governance Act (Public Law 106-309)


April 15, 2006

Share

Bureau of International Narcotics and Law Enforcement Affairs
April 15, 2006

TABLE OF CONTENTS

  1. The International Anticorruption and Good Governance Act

  2. USG International Anticorruption Initiatives


  3. Select USG Anticorruption Assistance Programs


  4. Conclusion

APPENDIX - Glossary of Abbreviations and Acronyms 

I. THE INTERNATIONAL ANTICORRUPTION AND GOOD GOVERNANCE ACT

The fight against global corruption is a foreign policy priority for the United States Government (USG). Corruption threatens many of our national interests globally including ensuring security and stability, upholding the rule of law and core democratic values, advancing prosperity, and creating a level playing field for lawful business activities. Corrupt practices contribute to the spread of organized crime and terrorism, undermine public trust in government and destabilize entire communities and economies.

The USG continues to advance actively bilateral and multilateral efforts with other governments, intergovernmental organizations, and non-governmental organizations (NGOs) to reduce corruption, promote transparency, and improve governance. During the reporting period, President George W. Bush, Secretary of State Condoleezza Rice, and former Acting USAID Administrator Frederick W. Schieck forcefully articulated that the fight against corruption is an important foreign policy objective for the USG. As Secretary of State Rice stated in her remarks to an American Bar Association (ABA) Rule of Law symposium in November 2005:

"Today, the greatest challenges that we face emerge more from within states than between them - from states that are either unable or unwilling to apply the rule of law within their borders. In a world where threats pass even through the most fortified boundaries, weak and poorly governed states enable disease to spread undetected and corruption to multiply unchecked and hateful ideologies to grow more violent and more vengeful. . . . Where the rule of law is undermined by government corruption, we are offering incentives for honest and transparent behavior."

Despite our leadership in this area, USG diplomatic and multilateral initiatives will succeed only if governments and the private sector take concrete steps to implement their commitments and build the necessary institutional capacity to prevent and deter corruption in their countries. The political will of individual governments and the popular will of citizens are critical to reduce corruption around the world. USG diplomatic efforts and technical assistance continue to play a role in helping countries cultivate and take advantage of political and popular will. To be effective, the primary responsibility and actions for addressing corruption must take place within each country's borders and be spearheaded by the respective government and its people.

Congress passed the International Anticorruption and Good Governance Act of 2000 (IAGGA) on October 5, 2000, which was signed into law as part of Public Law 106-309 on October 17, 2000. The purpose of the IAGGA 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," (IAGGA,  202(b)).

The IAGGA reflects the U.S. Congress's leadership and determination to ensure that strong anticorruption measures are integrated in U.S. foreign policy. The IAGGA defines anticorruption programs broadly, involving action to: support responsible independent media to promote oversight of public and private institutions; implement financial disclosure among public officials, political parties, and candidates for public office; open budgeting processes, and transparent financial management systems; support the establishment of audit offices, inspector general offices, third party monitoring of government procurement processes, and anticorruption agencies; promote responsive, transparent and accountable legislatures and local governments that ensure legislative and local oversight and whistle-blower protection; promote legal and judicial reforms that criminalize corruption; develop law enforcement reforms that encourage prosecutions of criminal corruption; 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; promote free and fair national, state, and local elections; foster public participation in the legislative process and public access to government information; and engage civil society in the fight against corruption. (IAGGA,  205).

The IAGGA amended the Foreign Assistance Act of 1961, adding to the list of major goals for United States foreign development policy "the promotion of good governance through combating corruption and improving transparency and accountability" (IAGGA, 203). The law also authorizes the President to establish programs "that combat corruption, improve transparency and accountability, and promote other forms of good governance" in countries where the United States has either a significant economic interest or provides significant foreign assistance, and where problems of corruption are most persistent (IAGGA,  205).

The IAGGA further requires the Secretary of State, in consultation with the Secretary of Commerce and the Administrator of the United States Agency for International Development (USAID), to prepare a report to Congress that surveys USG diplomatic and programmatic anticorruption efforts, as well as host government efforts, in priority countries. The first report, submitted to Congress in April 2001, provided a detailed history of the international fight against corruption and the USG role in drawing attention to the issue. This fourth biennial report, focuses on notable activities by the USG in 2004-2005.

II. USG INTERNATIONAL ANTICORRUPTION INITIATIVES

The USG has clear foreign policy and national security interests in seeing corruption addressed on an international scale. Corrupt interests continually hamper global economic activity of American firms, which can lose contracts to competitors that offer bribes or can be harmed by the decisions of corrupt judges. Corruption deters foreign investment in many countries, stifles economic growth and sustainable development, distorts prices, and undermines legal and judicial systems. By diverting or misallocating government resources, corruption prevents public benefits from reaching those who most need them. Corruption can also interfere with accomplishing USG foreign assistance goals and implementing successful programs. Corruption fosters the continuing growth of transnational crime and international criminal organizations, both of which threaten the security of the United States and its citizens.

Most critically, however, the destabilizing effect of corruption on democracy and rule of law threatens vital American interests. Emerging democracies are particularly vulnerable to kleptocratic activities of corrupt public officials. Corruption in such countries erodes public confidence in government institutions, and can substantially impair the ability of a democratic government to maintain political stability. The result can be fatal to well-intentioned democratic governments and, in the most extreme cases, erodes confidence in democracy as a political system within these countries.

Poor governance and corruption help create economic and social conditions that can breed disillusionment and nurture fanaticism. Terrorists thrive on corruption, collaborating with transnational organized criminals and utilizing smuggling and trafficking networks to facilitate and finance their activities. Corrupt officials, knowingly or not, aid terrorists by facilitating the illicit laundering of funds and illicit trade of weapons, passports, drugs, and persons. Terrorists also use bribes to obtain sensitive information from government sources. Corruption can help terrorists move across borders and find safe havens.

Fighting corruption is an important foreign policy priority for the President. President Bush, in a statement to representatives of over 100 countries at the Fourth Global Forum on Fighting Corruption and Safeguarding Integrity that was held in Brasilia, Brazil, in June 2005, remarked that:

"Every country is capable of fighting corruption, and the United States stands by nations who embrace transparency, promote the rule of law, and implement responsible economic policies...[and] is committed to working with dedicated partners to employ international anti-corruption measures, including denying safe haven to the corrupt, their corrupters, and their tainted assets."

In his release of the March 2006 National Security Strategy, President Bush reaffirmed his commitment to anticorruption as a key diplomatic tool by "denying corrupt foreign officials entry into the United States...[and] helping ensure that organized crime and parasitic rulers do not choke off the benefits of economic assistance and growth."

A. General Policy Framework

In advancing the objectives of the IAGGA, the USG continues to employ a mix of diplomatic, policy, and programmatic efforts to advance four main goals: uniting governments under common anticorruption commitments; helping governments meet or exceed those commitments; mobilizing popular will and private sector action; and leading by example.

Uniting Governments Under Common Anticorruption Commitments: The USG opens the door to enhanced cooperation through the creation of global anticorruption goals and standards. This, in turn, encourages the sharing of best practices, builds trust and relationships between cooperating countries, and ultimately increases the effectiveness of USG and other aid programs that assist these efforts. The most notable achievement in this area has been the recent entry into force of the United Nations Convention Against Corruption (UNCAC), the most comprehensive set of international commitments and standards for fighting corruption. The USG was an active participant in its negotiation. Since the UNCAC opened for signature in December 2003, 140 nations have signed it and 50 have ratified it. The convention entered into force on December 14, 2005 for those countries that have ratified it. The President transmitted the UNCAC to the U.S. Senate for its advice and consent to ratification in October 2005; the U.S. Senate has not yet consented to ratification of the UNCAC. The USG has stressed corruption as an impediment to sustainable development and investment in people, as evidenced by the President's insistence in late 2002 that corruption be identified as a "hard hurdle" for countries to qualify for Millennium Challenge Corporation (MCC) assistance. The USG has also lead efforts in developing G-8 anticorruption initiatives, including the four Anticorruption and Transparency Compacts announced at the 2004 G-8 Sea Island Summit with Georgia, Nicaragua, Nigeria, and Peru. The 2005 G-8 Gleneagles Summit Africa Initiative also includes strong anticorruption and transparency components: to support greater transparency in public financial management, including increased support for the Extractive Industries Transparency Initiative (EITI); to reduce bribery by the private sector by rigorously enforcing laws against the bribing of foreign public officials; to take concrete steps to protect financial markets from criminal abuse, including bribery and corruption; to help ensure that aid dollars go to improving living conditions and to help those countries implement their commitments under the UNCAC.

The USG has also lead efforts to set regional standards, resulting in the Asia-Pacific Economic Cooperation (APEC) Forum Leaders' adoption of an Anticorruption and Transparency (ACT) Framework in 2004 and reaffirmed in Busan in 2005, and adoption by Middle East and North Africa (MENA) governments participating in the OECD/UNDP "Governance for Development in Arab States" (G�D) Initiative that was launched in Jordan in February 2005. Finally, it is USG policy now to include anti-bribery provisions in new Free Trade Agreements (FTAs).

Helping Governments Meet or Exceed Those Commitments: A focus of USG bilateral assistance programs is to promote the implementation of multilateral anticorruption commitments, often identifying key areas where assistance is needed, through the mutual evaluation mechanisms that are a part of many of the multilateral commitments. Working with countries to develop effective governmental approaches to preventing, detecting, and prosecuting corruption, the USG has provided expertise and assistance to help over 60 nations implement their commitments. USG assistance includes supporting several multilateral mechanisms that evaluate implementation of regional commitments. The U.S. is a member and active participant in mechanisms that monitor implementation of European anticorruption standards (the Council of Europe's Group of States Against Corruption - GRECO), Western Hemisphere anticorruption standards (the Organization of American States' Follow-up Mechanism for the Implementation of the Inter-American Convention Against Corruption - IACAC) and the OECD Working Group on Bribery and Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Mobilizing Popular Will and Private Sector Action: The USG continues to develop and fund innovative technical assistance programs that help build the popular will against corruption and promote integrity within the private sector. Popular will expedites political will to fight corruption. The USG enhances popular will in other countries by helping encourage civil society, the media, and the private sector to be active in the fight against corruption, increase transparency in governments, and increase integrity in the private sector. The USG remains vigilant in ensuring that anticorruption activists and crusaders are not unduly harassed for reporting on corruption or exposing corrupt officials and their kleptocratic activities. Additionally, the USG, through initiatives such as the United States Department of Commerce's (USDOC) Good Governance Program, is working with representatives of the private sector to promote transparent business climates, business ethics, and good corporate governance practices.

Leading by Example: The USG has been a leader in the fight against corruption by promoting integrity within our own country and making our actions an example for the world. The international community can benefit from our examples, particularly regarding efforts to prevent U.S. persons and multinational businesses from bribing foreign officials and to prosecute those that do, strengthen and enforce corruption laws, apply antibribery due diligence to those applying for official export credits, promote good public and corporate governance, and develop tools and build institutions to prevent corruption. We also work closely with other nations to combat international aspects of corruption, such as money laundering and transnational flight of capital from illicit activities, through policy and mutual legal assistance, to bring the corrupt to justice. The USG is also advancing important anticorruption and accountability elements in its foreign assistance programs including, for example, the Millennium Challenge Account (MCA) and within the G-8 process.

B. Specific New Initiatives

There are several new initiatives, both diplomatic and programmatic, that reflect innovative and holistic approaches to working closely with other nations to combat corruption. These include:

G-8 Transparency and Anticorruption Compacts: The Compact concept was launched at the G-8 Sea Island Summit in 2004 as part of the G-8's Declaration on Fighting Corruption and Improving Transparency. The three-year Compacts to Promote Transparency and Combat Corruption are an innovative assistance concept that helps to fight corruption in a way that strengthens political will, rewards performance, and yields demonstrable results. By attacking corruption on multiple fronts with the strong commitment of the highest levels of government, the Compacts seek to raise the bar across government institutions and make transparency efforts in different sectors mutually reinforcing. Georgia, Nicaragua, Nigeria, and Peru were announced as the Compact countries at the G-8 Sea Island Summit in 2004. These governments have committed to pursue reforms that promote transparency and help prevent corruption, including the management of public finances and public procurement, as well as the engagement of civil society. In exchange, they are receiving assistance targeted to these areas. Through FY2005, the USG has provided over US$6.8 million to help Compact countries meet their goals. The USG expects to provide further assistance in FY2006.

MENA: The USG continues to support a core of committed Arab governments fight corruption and improve overall governance. In partnership with the OECD, the United Nations Development Program (UNDP), the World Bank, and other donors, the U.S. is helping build an incentives-based governance framework in the Middle East and North Africa (MENA) region anchored on shared responsibility, partnership and cooperation, and focused reforms that will help to ensure greater transparency and accountability. The "Good Governance for Development in Arab States" (GD) initiative has six areas of concentration: Civil Service and Integrity; the Role of the Judiciary and Enforcement of Judgments; E-Government, Administrative Simplification and Regulatory Reform; the Role of the Civil Society and Media in the Reform of the Public Sector; Governance of Public Finance; and Public Services Delivery and private-public partnership. The USG is co-chairing with France and Jordan the G�D Working Group on Enforcement and the Judiciary, and is providing technical support to the remaining five groups.

No Safe Haven: The USG continues to work vigorously to implement its commitment to deny safe haven to corrupt officials, those who corrupt them, and their assets, by denying entry to corrupt officials, being responsive to mutual legal assistance requests, and monitoring the implementation efforts of other nations. Building upon the inclusion of "No Safe Haven" commitments in both the G-8 Evian Declaration and the Special Summit of the Americas' Declaration of Nuevo Leon in 2003, the APEC Leaders' Summit in 2004 and 2005, and at the Fourth Global Forum on Fighting Corruption in Brasilia in June 2005 in which 103 countries adopted the concept. Visa denials of corrupt officials under Presidential Proclamation 7750, issued in January 2004, have received broad public support, and they send a strong signal to these countries that the U.S. does not countenance corruption. In cooperation with the OAS, the USG conducted a "Denial of Safe Haven" workshop in Latin America in 2005, training immigration officials, investigators and prosecutors on policy implementation. Also in 2005, the USG provided support for and participated in workshops on asset recovery and forfeiture in Nigeria and Botswana, to train investigators and prosecutors pursuing financial crime cases. In 2006, the USG will sponsor similar workshops in the Americas (Miami, May) and in the Asia Pacific region (Shanghai, April).

Global Assistance Strategy: USAID has developed a new anticorruption assistance strategy to identify ways that assistance programs can make a greater contribution to USG international anticorruption efforts. This cross-sector strategy builds on experience with programs that focus on reducing administrative corruption, raising citizen awareness of the costs and impacts of corruption, and strengthening civil society's capacity to oversee government activities. The new strategic approach addresses the dual challenge of administrative and grand corruption, with a focus on political and economic corruption among elites. It advocates multi-sector approaches to addressing the problem in order to increase and sustain results in this area and building new knowledge to improve assistance practice.

Business Ethics Pacts: The USDOC is partnering globally with the private sector to promote business ethics, encourage accountable corporate governance, and foster transparent business climates. USDOC's efforts led to the formation of private-sector coalitions and public-private sector partnerships in 11 countries, including Georgia, Honduras and Russia; developed and published Manuals on Business Ethics, Corporate Governance, and Commercial Dispute Resolution; and trained over 2,000 private sector representatives worldwide. Furthermore, the program has supported the creation of business ethics pacts in 6 countries, including Georgia. Working in cooperation with the USDOC, the private sectors in these countries have created, signed, and implemented Business Ethics Pacts. These Ethics Pacts include a series of principles that include prohibitions on bribery and guidelines on how to create and maintain transparent stakeholder relations. Furthermore, the Pacts' signing brought together members of the private sector, the highest levels of government, and civil society, and initiated an unprecedented level of collaboration between the public and private sectors on the issue of corruption. The USDOC continues to work with the private sector to assist them in fulfilling the commitments outlined in the Ethics Pacts.

III. SELECT USG ANTICORRUPTION ASSISTANCE PROGRAMS

The IAGGA acknowledges that a holistic approach to USG foreign anticorruption assistance, targeting a wide range of areas, is the key to combating corruption. Numerous USG agencies -- including the USAID, the Department of State (USDOS), the Department of Justice (USDOJ), the USDOC, the Department of the Treasury (Treasury), and the Office of Government Ethics (OGE) - provide assistance to foreign governments and counterparts within the anticorruption assistance categories mentioned by the IAGGA. USG technical assistance programs are designed to strengthen legal and regulatory frameworks, to build institutions and enhance capacities through regulations and enforcement. USG technical assistance programs also help to cultivate a viable civil society, creating a partnership between the public and private sectors to fight corruption. These programs promote transparency and accountability to ensure that the rule of law and market-based economics take root, thereby supporting democratic institutions and a sound private sector. This chapter describes recent USG programs and corresponding host government efforts in 12 countries where the USG conducts anticorruption programs that meet the parameters of priority countries as outlined in  205 of the IAGGA.

While the government efforts described in the following sections show forward movement, the passage of laws or issuance of regulations alone does not necessarily always lead to a decrease in corruption. Only active implementation of laws, effective enforcement, sound policies, and strong rule-of-law programs, combined with political and popular will to demand accountability, will bring about enduring change. The countries discussed in this report face significant corruption challenges and often uneven political and popular will -- a real commitment to fight corruption and improve transparency needs to be continually sustained over time before the effects of changes can be felt.

BANGLADESH

Government Efforts: The Government of Bangladesh (BDG) established an Anticorruption Commission (ACC) in November 2004 to replace an ineffective Bureau of Anticorruption. However, the ACC has been ineffective since its formation, and has not finalized its internal organizational structure. Under World Bank pressure, the BDG gave preliminary approval to a draft procurement law. The law is pending. At the urging of multilateral and bilateral donors, the BDG has cancelled procurements due to corruption in the power and telecommunications sectors and projects to support social development. Two ministers resigned following corruption scandals that received significant press attention. Corruption has prevented BDG from qualifying for development assistance under the MCA.

Bangladesh remains one of the few countries not to have signed UNCAC.

Law Enforcement and Legal Systems: The USG has provided technical assistance and training since 2004 to the BDG to support amendment of its anti-money laundering law and establishment of internal institutions for investigating and prosecuting financial crimes, including corruption. The office of the Resident Legal Advisor (RLA) was established at the U.S. Embassy in 2005 to support these efforts. Several USG agencies have provided training to professionalize law enforcement officers in conducting criminal investigations and in investigating police criminal misconduct.

Transparent Governance: USAID worked closely with other donors and the Prime Minister's office to design a long-term, government-wide anticorruption strategy. The resulting draft framework, once adopted, would create a road map for the government's overall approach to combat corruption. Eleven USAID-funded implementing organizations have undertaken a pilot program to promote citizen participation in determining the allocation and use of resources in their respective sectors. USAID developed a toolkit for community coordination of activities, knowledge sharing and peoples' empowerment based on the pilot program experience. Open public budget hearings aimed at increasing the financial transparency of the lowest level of elected government were conducted in 65 local government units during 2005, enabling citizens to scrutinize their budgets, prioritize development projects and receive reports of public expenditures. On average, this transparency program has led to a 15 percent increase in local revenue collection.

Civil Society: The U.S. Embassy actively promotes a free and independent press in Bangladesh. Senior USG officials have raised concerns about violence against journalists and the self-censorship that this violence causes both publicly and in private discussion with government officials. USAID and the Embassy provide training on investigative journalism to enhance the capacity of Bangladeshi journalists to conduct investigative reporting based on internationally recognized standards and principles. Every year, the Embassy sends journalists to the United States on the International Visitors program and on reporting tours. NGO's, in particular Transparency International (TI), actively promote awareness of corruption issues in Bangladesh, including through public seminars and education campaigns. USAID supports local governance initiatives to foster active public participation in oversight of government institutions and decision making, including local governance and budgeting and fiscal expenditure monitoring.

BOLIVIA

Government Efforts: The Government of Bolivia (GOB) stated in 2004 and again in 2005 that fighting corruption was a high priority. The GOB established the position of Presidential Delegate for Anticorruption in 2003. With the change of government in June 2005, Bolivia's new President, Evo Morales, has also emphasized the importance of fighting corruption since his inauguration in January 2006. Under the Morales administration, responsibility for overseeing anti-corruption efforts is located under the Vice-Presidency of Transparency and Anti-Corruption, under the Ministry of Justice.

GOB law enforcement entities, primarily the Attorney General's (AG) office, laid important groundwork for sanctioning corrupt acts in 2004-2005. The AG's office is legally an autonomous entity, which has permitted continuity for anticorruption programs despite changes in administration. However, the AG is vulnerable to political influence. The current AG has pledged to continue and expand anticorruption efforts already underway. The Police Commander is appointed by the President; for the past two years, each Commander has expressed commitment to support the government's anticorruption efforts.

Bolivia is a party to the IACAC and has signed and ratified the UNCAC.

Law Enforcement and Legal Systems: The AG, National Police, National Comptroller, and the Financial Investigation Unit (FIU) of the Bank Superintendent established two pilot anticorruption task forces (with technical assistance from USAID) that have operated continuously since September 2004. The task forces use an integrated model of anticorruption police-prosecutor teams for investigating and prosecuting corrupt acts, and they have been used as a model by other Latin American countries. Three European donors to Bolivia have established a basket fund to finance the task forces over the next three years and to create similar task forces in each of the country's departments. The two task forces are currently handling a total of 33 cases involving approximately US$12 million in state funds. The National Police, the AG, and the Judicial Branch adopted strict, practical ethics codes in 2005 with USAID assistance and are implementing them through training courses for their personnel.

Transparent Governance: USAID has produced two sets of extensive, innovative training materials for civil society and for municipal officials on how to make government more accountable and transparent. The materials are in printed form and on CD and have been distributed widely in Bolivia and other Latin American countries.

Civil Society: A civil society anticorruption network was created with USAID assistance for the first time in Bolivia in 2005. The network is training citizens and municipal officials on anticorruption issues at the local level, as well as speaking out to focus government attention on solutions. The network conducted a baseline survey of "the costs of corruption for Bolivian households" in 2005 that was widely publicized. The network plans to continue the survey in the future and to continue to monitor government compliance with the IACAC.

GEORGIA

Government Efforts: The fight against corruption has been a major area of focus for the Saakashvili government and a major area of assistance for USG programs. Georgia is one of four countries to sign a "Compact to Promote Transparency and Combat Corruption" with the G-8 at the 2004 G-8 Sea Island Summit. Government of Georgia (GOG) initiatives, including the prosecution of corrupt officials and businessmen combined with continued deregulation and customs and tax reform, supported by USG technical assistance and programming, have created a more transparent business climate with less opportunity for corruption in government institutions. According to a recent EBRD/World Bank Business Environment and Enterprise Performance Survey, the percentage of firms that identified corruption as a significant obstacle fell from 60 percent in 2002 to 39 percent in 2005. Increased compliance with financial structures and better participation in the formal economy have increased public trust and confidence in the government, and contributed to a nearly five-fold increase in the State Budget, encouraging GDP growth of between 6-8 percent in 2004 and 2005.

Georgia has not signed the UNCAC.

USG programs, including support through the G-8 compact, will continue to support the Saakashvili administration's efforts to eradicate the culture of corruption through economic and education reform, empowering local governments, engaging civil society, public and private sector reform, and a commitment to the rule of law.

Law Enforcement and Legal Systems: The Saakashvili administration fired some 15,000 police officers in 2004, and hired and trained an entirely new force in an effort to reform this formerly corrupt and ineffective institution. Today, according to a November 2005 International Republic Institute (IRI) survey, the public approval rating for the new Police Force has risen to 75 percent. In 2005, Parliament passed and the GOG is implementing legislation similar to the U.S. Racketeer Influenced and Corrupt Organization (RICO) statute. The GOG has begun to implement this statute, enabling law enforcement to more effectively prosecute mafia groups and those who collaborate with or profit from them. USG programs provide technical and operational assistance for the reform of the legal and law enforcement communities in meeting international standards. An Anti-Money Laundering Bureau created within the Procuracy in 2004 with significant USG support, is now investigating and prosecuting high-level corruption and money laundering cases.

The USG also provided substantial input for major revisions of the criminal procedure code, which are expected to be completed in 2006. The new code will create safeguards within the legal systems to protect human rights and make law enforcement organizations more effective in preventing and prosecuting crimes.

Judicial reform has come slower than the reform of law enforcement, and the judiciary is not seen as an independent branch of government. Despite ongoing USG assistance programs to help Georgia administer fair and transparent judicial and bar exams, as well as work to enhance their professional qualifications, more work remains to be done in this area. The USG continues to work closely with the Georgian Prosecutor General on criminal law reform, anticorruption, and anti-trafficking efforts.

Transparent Governance: The GOG has come a long way in addressing corruption in the public sector, but more needs to be done. USG programs are working to increase public sector transparency and accountability and reduce opportunities for corruption in Georgia. These programs support GOG efforts to develop national-level civil and property registries (part of the G-8 transparency and anticorruption pilot program), and a transparent government procurement system. Training programs provide technical expertise and orientation for government officials to develop their awareness of best practices in good governance.

In December 2005, Parliament passed local government legislation to regionalize authority, empower local government administrators and give citizens the right to directly elect city councils. USG programs are working to increase awareness of these reforms and build the capacity of local government administrators. In addition, U.S. assistance to the national Parliament is helping legislators reach out to their constituencies and become more responsive and transparent in their work.

A new, more transparent tax code, developed with substantial USG input and support, was introduced in January 2005. The revised code also reduced the number of taxes and their rates. The USG continues to provide substantial advisory support in improving tax and fiscal administration. Together with a one-time financial amnesty program, these reforms greatly increased transparency and participation in the formal economy and increased government revenues. New licensing and deregulation reforms enacted in July 2005 reduced the number of activities requiring a license, narrowing the opportunities for administrative corruption, thereby improving the business climate and attracting foreign investment. Citing Georgia's fiscal performance, anticorruption drive, and tax reforms, the IMF released second tranche of credit under the current Poverty Reduction and Growth Facility, totaling US$20 million.

Georgia does have a law that provides for public access to government information, although much work remains to ensure effective implementation.

The USDOC, in cooperation with the Georgian Good Governance Working Group, supported drafting of the first ever Georgian Basic Guidelines for Codes of Conduct. Based on internationally recognized standards and principles, and endorsed by the U.S. and Georgian Governments, the Guidelines have been signed by 52 companies and organizations. The USDOC assists the local Working Group to conduct workshops, seminars and other training programs that encourage implementation of company-specific codes of conduct, adoption of international best practices, promote transparency and improve public and private sector governance. Several universities and secondary education institutions are adapting and using USDOC's Business Ethics Manual as a primary text to support efforts to eradicate the culture of corruption.

Civil Society: Parliament passed the law on Higher Education in December 2005 and the law on General Education in April 2004, with the goal of improving Georgian education standards and practices and eliminating corruption in schools. US assistance supports a broader World Bank program for national testing for college admissions to combat corruption in that area.

In 2004, Parliament adopted a law on freedom of speech and expression providing for greater protection of journalists, including the right to protect sources, and for protection of whistleblowers. Allegations of intimidation of the media increased during the summer of 2005, but tapered off after increased diplomatic pressure and investigations were opened against two high-ranking local officials accused of violence against journalists. The USG continues to advocate for the investigation and just resolution of accusations of media intimidation. USG programs support the development of media organizations as profit-based, objective, mature partners in the public dialogue.

HONDURAS

Government Efforts: Over the last two years, Government of Honduras (GOH) efforts to address corruption have been largely ineffective, despite implementing a number of anti-corruption activities. In December 2004, the Municipal Transparency Fund was created to promote transparency activities and mechanisms at the municipal level. Seventy-four audits were completed last year because of the Fund; the results from 60 audits thus far have uncovered 277 million Lempiras in allegedly illicit enrichment and administrative misconduct. However, actual prosecution and punishment for corruption as a result of these audits has been minimal. The National Anticorruption Council (CNA) was originally promoted as an independent watchdog organization that would ensure the accountability of public servants to civil society rather than to themselves. However, the CNA has been ineffective, suffering long periods without leadership, and lack of independence from government and political interests. Shorter-term anticorruption measures by the GOH under the Maduro Administration did not produce significant results either. Unable to control corruption in its own ranks, the GOH delegated procurement of medicine and telecommunications equipment to the UNDP. Recently allegations have surfaced that multiple smaller orders were placed in order to avoid the UNDP mechanism, which is mandatory for large purchases. Clearly, significant lack of transparency in the procurement process remains. The Program for Efficiency and Transparency in the Procurement and Contracting of the State (PETCCE) was implemented to improve transparency in Executive-Branch procurement, but PETCCE recommendations generated by audits have not been implemented.

Honduras has signed and ratified the IACAC and the UNCAC.

Nevertheless, President Zelaya and his Minister of Government have said they will make this a priority and the Embassy will assist them as soon as they are ready to initiate the process with tangible actions. Implementation of CAFTA, requiring the GOH to implement and enforce measures to counter corruption, including bribery, could serve as a major stimulus in prompting changes in entrenched corrupt practices. The newly elected government needs to demonstrate its commitment to transparency and anticorruption through the establishment of solid and effective mechanisms to combat corruption.

Law Enforcement and Legal Systems: The new Criminal Procedure Code (CPC) replaced the written, inquisitorial trial system with oral, adversarial trials, and through its implementation is introducing more effective and more transparent procedures with greater protection for individual rights. USAID further supported implementation of the CPC by training judges, prosecutors, and public defenders to investigate and try cases of corruption, financial crimes, and organized crime. Treasury's Office of Technical Assistance (OTA) Anti Money Laundering Program has also trained judges and prosecutors to detect and prosecute financial crimes. The USG has strengthened the Frontier Police Special Investigative Unit (responsible for uncovering the "gasolinazo" corruption case and assisting on raids and follow-up to uncover false documents in the "passaportazo" incident), the Organized Crime Unit of the Public Ministry, and the Ministry of Public Security's National Police Internal Affairs Unit, including the donation of US$40,000 worth of computers, office equipment and supplies to the latter. The U.S. Embassy has provided important information on corrupt immigration and National-Registry-of-Persons personnel to the Public Ministry and provided technical assistance and office space to GOH investigators. USG assistance to the forensic medicine directorate of the Public Ministry has been critical for the successful prosecution of criminal cases. Given Honduras' inability to protect witnesses, forensics will continue to play a crucial role in corruption cases, including those linked with organized crime, drug trafficking, and trafficking in persons.

Transparent Governance: Improved governance has supported anticorruption measures through electoral reform, civil society participation, and greater accountability of elected officials. USAID supported the passage of a new Electoral Law in March 2004, removing the control that political parties held over the final selection of congressional representatives and establishing guidelines for reporting campaign financing. This will help reduce the corruption that has characterized Honduras' Congress. USAID also strengthened the role of civil society by raising public awareness of the need to address corruption in the public and private sectors, by supporting the CNA, and by increasing the accountability of local governments. The Supreme Court of Accounts (the Government Accountability Office equivalent institution in Honduras) has also been strengthened through training, technical assistance and equipment to improve the quality of their audits and to comply with their government mandate. However, the lack of political will has impaired the effectiveness of these audits and any resulting prosecutions.

Activities to obtain passage and implementation of CAFTA, such as supporting tax administration, detecting fraud, and developing a new Civil Procedure Code are major steps that combat corruption and create a more level playing field for commerce and investment. The USG labored exhaustively in obtaining passage and implementation of CAFTA, which includes numerous measures (e.g., transparency, antibribery, competitive bidding rules, procurement rules) to counter corruption. The USG has provided technical assistance to improve tax collections, including better internal controls, increase prosecution of tax fraud and evasion, and promote of professional ethics. USAID supported the development of a new Civil Procedure Code that would transform the civil courts by introducing more transparent oral procedures and creating a more transparent environment for commercial transactions, property ownership, family law, etc.

In October 2005, during the trade mission to promote CAFTA, USDOC Secretary Carlos Gutierrez announced the expansion of the Good Governance Program to include Honduras with the goal of building awareness and dialogue on business ethics, corporate governance, and transparent business climates; providing tools, resources, and training to members of the private sector to enable them to develop business ethics and corporate governance programs; and fostering private-public sector cooperation in creating sustainable initiatives to promote good business climates over the long term. USDOC will work with the American Chamber of Commerce (AmCham), the Honduran Foundation to Promote Corporate Social Responsibility, and other representatives of the private sector to establish a Business Ethics Working Group in Honduras. The Working Group will create a Honduras-specific Business Ethics Pact. Additionally, USDOC will train several members of the Honduran private sector in business ethics and responsible business practices through its July 2006 train-the-trainer program and other business ethics training seminars that will take place in Honduras throughout the year.

Civil Society: In the last two years, USAID-sponsored Transparency and Anticorruption activities have worked to empower civil society to fight corruption through capacity building and public awareness activities and through assisting groups promoting transparency. The Transparency and Anti-Corruption Public Awareness Campaign funded by USAID, strengthened civil society by conducting participatory workshops that led to the development and implementation of Transparency Commissions in selected municipalities. These Transparency Commissions have served as an example of what can be done by civil society on a municipal level to work against corruption. A publicity campaign with the theme "Transparency is Development" that encourages citizens to expect and demand more from their elected officials was carried out through Public Service Announcements broadcast over the radio throughout the country. USAID provided assistance to groups in over 30 municipalities that were working to further the cause of Transparency and Anti-Corruption in Honduras. The CNA was and continues to be supported through USAID funding, but thus far, the CNA has proven unable to become the independent watchdog organization that it was created to be.

INDONESIA

Government Efforts: The Government of the Republic of Indonesia (GRI) is implementing its most significant anticorruption campaign since independence. President Susilo Bambang Yudhoyono took office in October 2004. The 2004 national elections were largely free and fair and anticorruption was a major theme of Yudhoyono's campaign. Since taking office, high-level government officials, including a former Minister of Religious Affairs, have been prosecuted and convicted for corruption. President Yudhoyono appointed a new AG (in 2004) and Chief of Police (in 2005) with clean reputations. The GRI has also established in 2004-2005 several anticorruption policies including: a "National Action Plan to Combat Corruption;" measures against abuses by government officials that resulted in losses to the state; and an investigation team to recover assets. The President created an Interagency Corruption Eradication Team in 2005 which reports directly to him and is headed by a respected prosecutor.

Indonesia qualified for MCC Threshold status in November 2005 and improving anticorruption efforts is a core part of its threshold plan. The Supreme Audit Board (BPK), similar to the U.S. GAO, is playing a greater role in exposing corruption and publishes audit reports on its website. The GRI increased budgets for anticorruption agencies in 2006, including doubling the budget for the BPK. The BPK continues to receive technical assistance through USAID to help it build capacity and implement reforms. Finance Minister, Sri Mulyani Indrawati has requested donor assistance in improving transparency in Indonesia's tax administration. The USG has been working actively with other donors to respond appropriately. This assistance would be in addition to the current USAID-supported advisor to the Ministry of Finance (MOF). The GRI has also been active in the Consultative Group on Indonesia's Investment Climate Working Group, which the United States co-chairs with other donors (World Bank, European Union, Japan) providing a forum for discussion of improved policies to facilitate a better investment climate. Also with USG assistance in the wake of the 2004 earthquake and tsunami disasters, the GRI has also created a new model to coordinate response to disasters and help manage the millions of dollars in donor assistance and charitable contributions which flowed in for Aceh relief and reconstruction. The Reconstruction and Rehabilitation Agency (BRR) reports directly to the President, has an energetic leader, a strong anticorruption mandate, tough internal controls and transparent procurement guidelines. USAID and other donors to the BRR are, among other things, going to support development of an anticorruption unit.

Indonesia has signed, but not yet ratified the UNCAC.

Law Enforcement and Legal Systems: The AG has initiated over 500 anticorruption cases in the past year. The USG is assisting the AG's Office through a USDOJ RLA based at the Embassy in Jakarta. The Indonesian National Police is undergoing a transformation under new leadership with improved internal discipline. USDOJ is providing assistance to the police to clarify professional standards, reform financial management, and build capacity for effective investigation techniques. The GRI has expanded funding and staff at its Anticorruption Commission (KPK), which has pursued several high profile cases. The KPK hired 180 new employees in 2005 and as of February 2005 had 56 full-time investigators and over 30 cases underway. The USG is providing assistance through three USAID projects, two focusing on justice sector reform and one focusing on financial crimes prevention, as well as through the RLA.

The GRI is also setting up two oversight commissions, a Judicial Commission and a Prosecutorial Commission, as well as establishing codes of conduct for the judiciary. USAID is working with the "Institute for the Independence of the Judiciary" to work with the Judicial Commission to establish clear and transparent judicial selection methods and procedures, and with the Supreme Court to establish methods of open and participatory examination of court decisions. The Financial Transaction Reports and Analysis Center (PPATK) has been a positive force in the anticorruption effort and PPATK experts have testified in corruption trials. The Financial Action Task Force (FATF) removed Indonesia from its "Non-Cooperative Countries and Territories" list in February 2005 and from special monitoring in February 2006. USAID continues to provide assistance to the PPATK. Indonesia's Supreme Court, Anticorruption Court and Commercial Court are all receiving assistance through USAID's Judicial Reform Initiatives. The central bank, Bank Indonesia, hosted training seminars in January 2006 given by the U.S. Secret Service, to help cashiers and money changers and GRI and law enforcement officials detect counterfeit U.S. currency, while USAID-supported training sessions have built capacity among bankers and regulators in "Know Your Customer" and anti-money laundering best practices. The USDOJ has provided copies of U.S. counterfeiting laws to Bank Indonesia, which is considering revision of Indonesia's laws to make them more effective against those who produce or distribute counterfeit currency.

Transparent Governance: The GRI seeks to strengthen the role of its inspectors general to improve internal controls. At the request of the President, the MOF is also actively working on civil service reform, to revise the pay structure, improve efficiency and performance and reduce incentives for corruption. The GRI has also made efforts in the past year to consolidate and improve management at more than 150 state-owned enterprises, including the country's largest bank, but many remain non-transparent and subject to political meddling. USAID's "Local Governance Support Program" helps local governments to develop sound policies, performance-based budgeting and participatory planning. USAID is strengthening legislative councils in 60 local governments to develop sound policies and to play a critical oversight role representing citizens' interests and overseeing local government performance. USAID is also assisting local government to streamline procurement processes and strengthen internal audit systems to minimize opportunities for corruption at the local level.

Civil Society: Anticorruption watchdogs and media investigations of corruption have increased in the past year. USAID is working with foundations to draft and promote passage of a Freedom of Information Law promoting greater transparency and access to government information. The U.S. Embassy Defense Attach�'s Office and USAID are helping the military both directly and through local organizations to help the GRI with its plan to move military businesses under GRI control.

IRAQ

Government Efforts: Corruption is endemic in Iraq. Governance is weak and the state-dominated and over-regulated nature of the economy provides ample opportunities for illicit rent seeking behavior. Generous subsidies dating to the Saddam Hussein era offer attractive incentives for corrupt transactions in the energy and foodstuff sectors. Uncertain Iraqi Government support and active attacks on anti-corruption entities by individuals and political factions are significant problems. Widespread perceptions that ethnic and sectarian interests have inordinate influence in the pursuit of corruption cases need to be overcome.
USG efforts to help curb corruption have been wide-ranging, while the Government of Iraq (GOI) is beginning to attack the problem as well. The GOI has begun to change the economic environment that encourages corrupt behavior, most notably by beginning to remove massive subsidies on petroleum products and foodstuffs. Efforts to privatize state-owned firms, still dominant and corrupting features of the economy, are still preliminary. The Government has, however, created the foundations of a comprehensive anti-corruption system. Three institutions: 1) the Commission on Public Integrity (CPI), 2) the ministries' Inspectors General (IGs), and 3) the Board of Supreme Audit (BSA) address the corruption issue, with final adjudication of corruption cases the responsibility of a five judge panel of the Central Criminal Court of Iraq (CCCI). The CPI and the IGs were created by Coalition Provisional Authority (CPA) orders in early 2004. The BSA pre-dates the Saddam Hussein regime, but was re-established with a new mandate by CPA order in 2004 as the supreme auditing body in Iraq. To date, these institutions have had limited effectiveness owing to flawed coordination between them and the small number of adjudications completed. These institutions are still weak and need capacity development and public support.

Iraq is not yet a party to the UNCAC.

Law Enforcement and Legal Systems: CPI, funded principally by the USG, now has 180 active investigators, over 1,000 personnel and four provincial offices. In 2005, the CPI conducted over 2,600 investigations and referred over 600 cases to the Central Criminal Court of Iraq for criminal proceedings. The actual number of convictions remains low - only seven to date.

There are now 31 IGs, one in each ministry, with a total IG staff of over 2,000 personnel. In 2005, the IGs conducted over 3,700 ministry audits, 1000 inspections, and 2,700 investigations. Of these, over 1,100 criminal cases have been referred to the CPI for action and another 250 cases sent directly to the Iraqi Courts system through the IG for the Ministry of Justice.

The USG funds a number of special advisors that work with each of the anti-corruption institutions to build their capacity. Four advisors to the CPI were funded in 2004 and that number increased to 12 in 2005. One IG-advisor position was funded in 2004, which was increased to two advisors in 2005. The BSA also has one advisor. Technical assistance will continue to help develop laws, systems, and institutions that provide necessary checks and balances in the handling of public finances and to develop law enforcement capacity that is effective and active in the fight against corruption.

The USG is also funding assistance to the Iraqi judiciary, particularly in the area of strengthening judicial integrity and capacity. Assistance included a training program on judicial independence, governmental accountability and human rights. USG funding also provided training courses to ministry IGs in the areas of ethics, corruption, internal audits, and international accounting principles.

Transparent Governance: The CPI has issued Codes of Conduct and Financial Disclosure forms for government employees. However, response rates by some ministries remain low. The USG is funding extensive work with the Iraqi Ministry of Finance and other major ministries to install effective systems for budget planning and execution. In 2006, USG assistance will be provided to the Ministry of Finance to install an IT system to track all government purchases at all stages of the procurement process; this system will provide the basic data that investigators need to detect fraud in procurement. Also, the USG will provide the Ministry with a strategy to revise its procurement law in order to reduce opportunities for corruption. The CPA advisor to the BSA helped review that organization's rules and regulations and encouraged their codification. Since the end of 2004, the BSA has conducted required audits of every government entity, including one which resulted in a CPI investigation into allegations of corruption at the Ministry of Defense amounting to a loss of as much as US$1.3 billion.

Civil Society: USG assistance is helping to develop the base for solid civil society organizations (CSOs) in Iraq. One program provided investigative journalism training to working Iraqi journalists, reporters and editors from print, TV and radio, online journalists and journalism professors. This training reinforced the necessity of the media's "watchdog role" in the fight against corruption. Since October 2004 a USG-funded Iraq Civil Society and Media Program, which works with CSOs throughout Iraq also has been in operation. The program uses a three-pronged approach -awareness raising, anti-corruption advocacy, and workshops and technical assistance - to focus on prevention of corruption.

KENYA

Government Efforts: The performance of the Government of Kenya (GOK) in 2004 and 2005 was mixed at best, with steady progress on the institutional and legal fronts juxtaposed with a serious lack of high-level political commitment to combat corruption. In April 2004 serious allegations of grand-scale graft at the highest levels of the sitting Kibaki administration surfaced in connection with the so-called Anglo-Leasing procurement scandals. Eventually, five officials were charged; their cases are still pending in court. Investigations against more senior leaders ended at that time without any further arrests or prosecutions.

The GOK's credibility in the war on corruption collapsed in early 2005 when John Githongo, the President's anti-corruption czar, resigned and went into self-imposed exile in London. Soon thereafter, the highly regarded Director of Public Prosecutions was fired and the director of the local TI-Kenya was forced to resign. In early 2006, Githongo went public with his Anglo-Leasing evidence, which directly implicated several key ministers, presidential advisors, and influential businessmen. Under intense pressure from the public and the media, one implicated minister was left out of the cabinet following a reshuffle in December 2005, and two others resigned in February 2006. However, the GOK has not acted against others directly implicated in the scandals or their cover-up. Further, it is widely believed that high-level prosecutions are being delayed or blocked by the Attorney General in response to political considerations.

Progress was also mixed regarding follow up on corruption perpetrated under former President Daniel Arap Moi. In 2004, the GOK released a Land Commission report, which includes two annexes revealing names of high-level former and current GOK officials implicated in the "irregular" acquisition of public lands. Substantial action to recover illegally acquired land has yet to be taken, however. Some money associated with the Anglo-Leasing scandals was returned mysteriously to the GOK in 2004. However, other efforts to recover the proceeds of corruption hidden earlier overseas, as detailed in a report compiled and completed in 2005 by Kroll Associates, have yet to yield results. In February 2006, the GOK released the Goldenberg Report, which recommends action against dozens of businesspeople and members of the former administration in connection with a massive financial scandal from the early 1990s. As a result of the report's findings, one implicated minister in the Kibaki administration was forced to resign.

On the institutional front in 2004, the National Anticorruption Campaign Steering Committee was appointed, along with the leadership of the Kenya Anticorruption Commission (KACC). The KACC, the country's leading graft investigative body, became fully staffed and operational in mid-2005 and has launched dozens of investigations and forwarded files for prosecution to the AG's Office. In April 2005, in response to pressure from civil society and development partners, the GOK prepared a 12-month anticorruption action plan, and in some areas such as public expenditure management reform and civil service reform, important progress has since been made. Further, the GOK pushed through two important bills in Parliament late in 2005 dealing with privatization and government procurement. If effectively implemented, the laws have the potential to eliminate or sharply narrow loopholes through which corruption has traditionally flourished in Kenya.

Kenya has signed and ratified the UNCAC.

Law Enforcement and Legal Systems: Throughout 2004 and 2005, the USG continued support to the specialized unit on anticorruption, economic crimes, serious fraud, and asset forfeiture within the Department of Public Prosecutions (DPP). As a participating institution in the GOK's Governance, Justice, Law, and Order Sector reform program, the DPP contributes to the key result area focused on reducing corruption. The USG assistance to the DPP contributes towards the professional prosecution of criminal corruption cases through: an improved case tracking system; the development of specialized curriculum and delivery of subsequent training; the provision of direct technical assistance through a USDOJ RLA and short-term technical experts; enhanced monitoring and evaluation; the establishment of a reform program secretariat; and the acquisition of reference materials and related equipment for a dedicated research facility.

Transparent Governance: In 2004, the USG's key anticorruption partner was the Department of Governance and Ethics (DGE), within the Office of the President and led by John Githongo (see above). In collaboration with TI-Kenya, also a USG grantee, the DGE hosted an international experts meeting in 2004 on the challenges that "new governments" face when tackling corruption following a political transition. USG-sponsored activities with the DGE included the design of several anticorruption measures such as a system for the collection, storage, and analysis of public officers' asset declaration forms, a public complaints unit, an assets restitution division, and a national baseline survey of citizens' views of corruption. Following Githongo's resignation, which called into question the GOK's commitment to fighting corruption within its own ranks, the USG ended its support to the DGE, and the GOK subsequently disbanded the office altogether.

Assistance to the Parliament continued to further strengthen the legislature's oversight capacity. With an emphasis on oversight committees, the USG trains legislative staff, including researchers, so that the committees may more effectively hold the Executive to account. USG support also facilitates Parliament's outreach to civil society and the private sector to solicit citizen's views and expert opinions when considering and amending legislation. USG funds are being used to build Parliament's in-house budget analysis capacity and will enable Parliament to provide more substantive input into the budget process. As part of this, Parliament is expected to shortly establish both a Parliamentary Budget Committee and a Budget Office.

Improving governance and assisting in the fight against corruption are major themes of the U.S. Mission in Nairobi in both its private and public diplomacy. The U.S. decision to halt funding for certain governance-related activities following the Githongo resignation was announced in a major and widely read public address by the Ambassador on the theme of corruption and good governance. U.S. Mission leadership has also been instrumental in keeping governance concerns front and center in the broader donor dialogue with the GOK and in making improved governance and tangible GOK actions against corruption a prerequisite for improved GOK-donor relations. In keeping with the President Bush's "No Safe Haven" policy, the United States has denied visas to several Kenyan officials found to be corrupt. Local newspaper polls have shown that the vast majority of Kenyans support this action.

Civil Society: As the GOK's progress in combating graft has waned, the USG has maintained support to CSOs that monitor government performance and advocate for accelerated reforms. Since 2004, the USG has awarded grants to TI-Kenya, the Center for Governance and Development, the Kenya Institute for Supplies Managers, the Institute for Policy Analysis and Research, and the Kenya chapter of the International Commission of Jurists. USG support to CSOs enhances non-governmental advocacy capacity and increases the public demand for anti-corruption reform. Furthermore, to strengthen CSOs such as TI-Kenya and other groups engaged in policy reform, advocacy, and GOK monitoring, the USG is launching a program to strengthen CSOs' technical skills and sustainability through a training and capacity building component. The program will engage new non-governmental partners in anti-corruption efforts, including private sector coalitions, professional associations, membership organizations, and faith-based groups.

NIGERIA

Government Efforts: The Government of Nigeria (GON) continues to combat corruption on various levels and in several areas, both independently and with U.S. assistance. The primary GON anti-corruption agencies, the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Economic and Financial Crimes Commission (EFCC), have achieved real results in not only identifying and recovering ill-gotten gains from notable Nigerian officials, including former head of state General Sani Abacha, Senate President Adolphus Wabara, and former police Inspector General Tafa Balogun, but also in having several officials impeached and/or prosecuted, including five former ministers and two former governors. Both ICPC and EFCC have benefited from approximately US$1 million in U.S. assistance. ICPC has also benefited from the temporary assignment of a U.S. prosecutor to assist in both procedural and conceptual matters. Though real, these achievements are undermined to a certain extent by the fact that many investigations have targeted the president's political opponents, while egregious corruption among his allies goes unaddressed. The number of public officials prosecuted for corruption offenses remains relatively small.

Nigeria has signed and ratified the UNCAC. Nigeria also signed a "Compact to Promote Transparency and Combat Corruption" with the G-8.

Law Enforcement and Legal Systems: The USG provides advisory assistance and trains ICPC prosecutors and investigators. The project is designed to assist the ICPC in developing its capacity to combat and prevent corruption. Since FY2002, the USG has also provided assistance to the Nigerian Police Force with modernization and reform efforts. USDOS and USDOJ have trained hundreds of officers in several different disciplines, including civil disorder management, election security and community policing. Many of the courses include human rights and anti-corruption components.

Transparent Governance: As part of the G-8 transparency and anticorruption compact with Nigeria, the USG is supporting several projects in the country, including training and other assistance for the Nigerian Accountant General's Office in support of its Transaction Recording and Reporting System. The assistance is intended to enable the Office of the Accountant General to exercise greater oversight of the annual budget process, and improve its real-time audit capability. A USG team has also assessed the needs of the EFCC and other Nigerian anticorruption/law enforcement entities.

The USG works with several international and domestic CSOs to promote transparency, accountability and the rule of law. USAID efforts have focused on two areas: legislative support for greater transparency in the budget process through the establishment of the National Assembly Budget and Research Office (NABRO); and the engagement of civil society in the Nigerian Extractive Industry Transparency Initiative process (NEITI).

Support for the establishment of the NABRO was part of USAID's five-year US$6.25 million National Assembly capacity building program implemented by the National Democratic Institute (NDI). NDI has devoted considerable efforts and expended significant USAID funds in support of various National Assembly committees involved in the budget process. These efforts have recently born fruit with the inclusion of the equivalent of US$2 million in the 2006 Federation budget earmarked to establish the NABRO. Also of note is that Nigeria is one of the first developing nations to endorse the EITI and has gone beyond the stipulations of the EITI protocol by institutionalizing a standing "due process mechanism."

Civil Society: USAID worked with key government of Nigerian institutions, including the Budget Office of the Federation, the Accountant General, the Debt Management Office, the Central Bank of Nigeria and the Budget Monitoring and Price Intelligence Unit (BMPIU), to introduce and institutionalize internationally recognized and accepted resource management, budgeting and procurement procedures. A multi-year budgeting cycle and medium term expenditure framework (MTEF) are now standard practice at Federal level, and work has begun to devolve these models to selected states. Key functions of the budget office have been automated and information processing capacity increased through fiber-optics solutions. USAID technical support was instrumental in assisting the BMPIU to develop a communications strategy, including a website featuring their reform initiatives and contract procedures, which are estimated to have saved the GON over US$1 billion over the past three years.

USAID trained 80 individuals, representing 10 CSOs, on budget related matters, such as the MTEF, chart of accounts, and budget classification procedures, thus empowering these organizations as "watchdogs" over the budget cycle. To further support citizen participation in and understanding of the budget process, and to increase transparency and accountability, USAID also published 10,000 copies of a "Citizen's Guide to Budgeting", which were distributed to all key government agencies, donors, NGOs and CSOs.

USAID support to NEITI in 2005 included critical civil society input into the drafting of Memorandum of Understanding (MOU) between civil society stakeholders - human rights groups, labor organizations, the private sector, academic and professional groups - and the NEITI secretariat charged with coordinating the EITI process in Nigeria. USAID support enabled civil society to provide substantive input into the draft, including promotion of more diverse civil society participation, regular and meaningful consultation with CSOs, CSO involvement in setting up guidelines for audits, training/orientation of CSOs on the EITI process, and participation/access to information on NEITI and other related government deliberations. Although the MOU is still in its draft form, regular meetings and dialogue with CSO stakeholders, including Publish What You Pay (PWYP), have signaled readiness by the GON to sign the document.

USAID also supports PWYP to engage with the two-year oil industry audit process, and the passage of an EITI bill that formalizes the public audit and public participation/oversight role of civil society. PWYP is tracking the audit process, having analyzed the guidelines and developed a plan for reporting the findings to the public. Routine audits that the public perceives as independent and competent assessments of revenues and costs are critical to building confidence in the country's "single-commodity" economy. Oil revenues drive policy decisions and resource allocations at the federal, state, and local levels. Having credible figures on federal revenues is the first step in evidence-based advocacy on policies and budgets on social services and economic development.

PWYP's Nigeria membership has increased by 53 percent between March and July 2005, going from 59 to 90 CSOs signing onto the campaign, exceeding the target of 12.5 percent for this period. The first-year anniversary of PWYP in Nigeria presented a great opportunity to build membership and credibility for PWYP's campaign for transparency and openness in government administration. The success in 2005 adds to the steady build-up of public support, which is critical to the GON's perception of civic engagement in the NEITI process. Because of USAID's work, the GON is beginning to become more responsive to civil society's demands for more openness in the oil sector.

PERU

Government Efforts: In 2004, the Government of Peru (GOP) stepped forward to accept the challenge of the G-8 countries to join a transparency and anticorruption compact pilot program and develop an action plan and project matrix to combat corruption, increase transparency, and enhance the government procurement process. The six project areas in the GOP matrix, with 36 project activities, were focused on promoting transparency and strengthening the government procurement process. During 2005, the government completed or made substantial progress on nearly all the project areas in its matrix. The more substantial projects included designing and launching an e-government electronic payment system, standardizing governmental accounting, budgetary and financial processes, and training local government procurement officials (a USAID project). The United States is providing US$2.2 million in direct support to projects in Peru under the G-8 compact. Peru has also endorsed the EITI and is a member of the EITI's International Advisory Group.

In other efforts, the GOP also worked to increase transparency and reduce the number of procedures needed to start a small business by consolidating forms, eliminating redundancies, and posting all the forms and processes on a government website. Peru intends to do the same with the most common processes and procedures affecting the public. To improve its accountability, the Peruvian Congress, with support from USAID, formed an Ethics Committee in 2003-04, and in 2005, it suspended two congressmen for improper conduct.

Assisting Peru in fighting corruption has been a top priority of U.S. Embassy in Lima. The Ambassador frequently raises corruption issues with Peruvian officials at the highest levels. For several years the Embassy's Public Affairs Section has worked closely with the Office of the Controller General to offer it access to expertise and experience that would help it in its role of controlling corruption. The Embassy also assisted the GOP in organizing two roundtables on anticorruption with GOP agencies, and G-8 and NGO donors. The Ambassador co-chaired one of those meetings.

Peru has signed and ratified the IACAC and the UNCAC.

Law Enforcement and Legal Systems: The USG has provided considerable assistance to combat corruption and improve transparency and accountability in Peru. The USG funded a two-year contract for a Treasury advisor to help establish Peru's FIU and equip it with a computer and security system. The USG also provided US$50,000 to the Peruvian National Police (PNP) for computers, and is working closely with the PNP's Financial Investigation Division on money laundering cases.

The U.S. Treasury advisor also assisted the Ministry of Foreign Trade and Tourism with preparation of a draft law to better control the gaming industry to prevent its use in money laundering and terrorist financing. Another U.S. Treasury advisor gave a presentation on regulation of the gaming industry to more than 100 representatives of the AG's Office. The U.S. Treasury worked with Peruvian Customs to provide a two-week training program on detecting and interdicting illegal and undeclared bulk cash shipments. The U.S. Treasury also funded the travel and lodging for five Peruvian participants for a one-week money laundering training program in Vienna, Virginia.

Transparent Governance: USAID in Peru has provided a number of programs specifically focused on promoting transparency, public participation and combating corruption. Under one program, the State contracting agency, CONSUCODE, aims to promote transparency in government procurement at the local level by providing training to local government contracting officers, civil society, and local businesses to ensure a clear understanding of government contracting rules. At the same time, CONSUCODE also trained local citizen oversight organizations, composed of representatives from stakeholder groups, such as local chambers of commerce, business associations, and watchdog groups, to keep an eye on local bidding processes.

The USG's flagship program in decentralization aims primarily to build capacity of local governments to establish and use mechanisms of local government transparency and accountability. The Pro-Decentralization program provided technical assistance to regional and municipal governments in such areas as participatory budgeting and planning, accountability procedures, government transparency, and the national government financial administration system (SIAF) and public investment system (SNIP). The decentralization program also supported municipal connectivity for 12 local governments, giving them access to the SIAF and SNIP, and providing citizens the opportunity to access public information about their local governments. This effort has been complemented by a project with the Ombudsman Office, whose responsibility it is to promote good governance and access to public information and ensure appropriate sue of public resources and government neutrality in the provision of public services.

In the justice sector, the USG provided technical assistance to modernize the justice sector and improve judicial processes, including strengthening internal oversight mechanisms and direct assistance to the anti-corruption commission. An activity in this area that has had major impact is the creation of 13 commercial courts that employ procedures that reduce case processing time and discretion in the handling of cases, which has helped build users' confidence in commercial justice.

Civil Society: USAID supported three CSOs, one each in the areas of justice reform, decentralization, and congressional reform. Each consortium aimed to promote citizen participation, access to information, and government oversight of reform processes in each sector. Each consortium published regular bulletins on the performance of government institutions and their relative success meeting standards of transparency, access to information, integrity and ethics, and accountability.

PHILIPPINES

Government Efforts: The Government of the Republic of the Philippines (GRP) is making limited progress in tackling corruption and instituting improved governance and more effective rule of law. During 2004-2005, the GRP implemented anticorruption legislation that was passed during President Arroyo's first term in office, including Executive Order 12, which created the Presidential Anti-Graft Commission (2001); Executive Order 259, which created the Revenue Integrity Protection Service (2003); the anticorruption arm of the Department of Finance; and, the Government Procurement Act of 2003. The President has supported a series of measures to strengthen the office of the Ombudsman, the center of GRP anticorruption efforts. The Ombudsman, with its staff of investigators and prosecutors, carries out lifestyle checks and investigations of suspected officials; it brings charges against officials and prosecutes them in the Anticorruption Court ("Sandiganbayan"). In 2005, the Congress approved a 25 percent budget increase for the Presidential Anti-Graft Commission and a 43 percent budget increase for the Office of the Ombudsman, which used the funds to reinforce its beleaguered contingent of investigators and prosecutors with fresh new recruits. As a result, the Ombudsman enhanced the effectiveness of its investigation and prosecution of corruption cases and increased its conviction rate from 39 (13 percent) in 2003 to 46 (over 30 percent) in 2005.

The Office of the Ombudsman and the USDOJ signed a memorandum of agreement to enhance their cooperation in the prosecution of corruption. The Sandiganbayan recently modernized and reformed its Rules of Procedure to reduce inefficiencies. In addition, the Sandiganbayan has agreed to institute continuous trial on a pilot basis to streamline the start-and-stop judicial process and reduce the current average of seven years needed to conclude a case.

The GRP continues to improve its anti-money laundering infrastructure. In January 2005, the Philippine Central Bank issued a circular to extend the reach of the Anti-Money Laundering Act (AMLA) to cover money exchange services and foreign currency dealers. Because of the successful implementation of anti-money laundering reforms, the FATF de-listed the Philippines as a non-cooperating country in February 2005. In June 2005, the Philippines was admitted to the Egmont Group, a global network of financial intelligence units. In November 2005, the Supreme Court issued a new rule of procedure on civil forfeiture, which vested upon the regional trial courts the authority to issue an "ex parte" provisional asset preservation order. The Department of Justice filed 24 money-laundering cases in 2005, without any convictions, as many of these cases are still pending.

To help the Philippines fight corruption, overcome deficiencies in its fiscal situation, and enhance efficiency and transparency in government tax collection, the MCC selected the Philippines to participate in its Threshold Country program.

The Philippines has signed, but not yet ratified, the UNCAC.

Law Enforcement and Legal Systems: USAID provided funding to the Rule of Law Effectiveness project and the ABA to undertake legal and judicial reform projects, including ethics training for judges and court personnel. The USG also supported training of judges on the AMLA and held a forum on "Best Practices in Civil Forfeiture." Responding to APEC interest, the ADB, with financial support and technical assistance from the USG, set up a Regional Trade and Financial Security Initiative in 2004. In 2005, the fund approved and initiated several projects to strengthen anti-money laundering in Southeast Asia, such as an on-going technical assistance program that addresses regulatory and compliance enhancements, an anti-money laundering process map, computer based training, and a forensic accounting program established at the University of the Philippines with the assistance of the U.S. Treasury.

Transparent Governance: USG programs focused on strengthening GRP public sector administration through technical assistance to improve transparency in government activities such as granting business permits, budgeting, and procurement. The United States provided a series of grants to The Asia Foundation, including funding through USAID, for the Transparent and Accountable Governance (TAG) project. The TAG promotes responsible and independent media coverage in coordination with the Philippine Center for Investigative Journalism and Newsbreak (a news magazine), and supports the Center for Media Freedom and Responsibility to award responsible, investigative reporting.

Civil Society: The USG funded programs to foster public participation in the legislative process and public access to government information. Through USAID, the United States provided a grant to the International Foundations for Election Systems (IFES) to support free and fair elections and voter education. The USG also funded an election observer mission to the Philippines for the 2004 national elections with a combined team from IFES, the NDI, and the IRI. Following the election, the team submitted recommendations for electoral reform. IFES has followed up by helping the Commission on Elections and civil society to improve election administration.

RUSSIA

Government Efforts: During the current 2004-2005 reporting period, President Putin and senior Government of Russia (GOR) officials frequently addressed the problem of corruption in public statements. Many jurisdictions throughout the country established local anticorruption committees. At the federal level, the Ministry of Internal Affairs established an internal Anticorruption Investigation Service. The Federal Government also established a Council for Fighting Corruption, but the council has been largely inactive. Anticorruption campaigns tended to be limited in scope, of short duration, and focused mainly on lower level officials. Allegations of corruption were also used as a political tactic. There were no high profile prosecutions for corruption during the last two years.

Russian Customs, broadly thought to be one of the most corrupt GOR institutions, pledged 30 billion rubles (approximately US$1 billion) to fight corruption in its own ranks. The money has been earmarked to raise officials' salaries, increase training, and provide stricter internal controls.

Russia has signed and ratified the UNCAC.

Law Enforcement and Legal Systems: Russia does not have a national law that provides for public access to government information. Citizens generally do not have a right routinely to request official information from the government, although there has been at least one instance in which citizens successfully sued the government in court, which then ordered the release of information to victims' families following the massacre of theater patrons in a widely publicized terrorist incident in 2002. Such cases are more the exception than the rule, however. A draft law on public access to information has been under consideration since October 2003, but the GOR has not yet submitted it to the State Duma for legislative action. Some jurisdictions, including Moscow and St. Petersburg, have enacted local laws concerning public access, but they apply only to the activities of local officials.

USG assistance programs to the judiciary stressed the subject of judicial ethics and worked closely with the judicial branch body that enforces judicial ethics standards. The Sixth All-Russian Congress of Judges in December 2004 adopted a new, more substantive Code of Judicial Ethics that incorporated suggestions made through United States supported programs. At the Congress, President Putin expressed support for regulations requiring judges to publicly declare their income and assets and Russian Supreme Court Chief Justice V.M. Lebedev endorsed the practice of random case assignment to judges, an innovation that has been pioneered in two pilot courts working with USG-supported advisors. USAID has worked with the Russian courts to encourage the publication of court decisions as a means of increasing transparency, and some courts have done so. The two USDOJ RLAs at the Embassy in Moscow conducted numerous seminars throughout Russian with judges, prosecutors, and defense attorneys, and addressed sentencing guidelines, advocacy skills training, and defense bar ethics. The USG funds a program through the American Bar Association Central European and Eurasian Law Initiative (ABA-CEELI) to aid regional municipal officials in combating corruption. Russian law enforcement also receives training in anticorruption methods and principles through core law enforcement courses at the USG-sponsored International Law Enforcement Academy (ILEA) in Budapest, Hungary, as well as an advanced management course at the ILEA in Roswell, New Mexico.

Transparent Governance: With USAID support, the Center for Economic and Financial Research, an independent Russian think tank, carried out five rounds of surveys in 20 Russian regions to monitor the implementation of deregulation legislation, identifying both successes and failures, and effectively publicized the results. This work complemented and reinforced the important legislative work done by the National Project Institute, a Russian NGO, by ensuring that the laws that reduce regulation and administrative barriers, and thereby lessen corruption opportunities, were fully and effectively implemented at the regional level.

The Institute for Urban Economics, a USAID-funded Russian think tank, worked successfully on promoting budget transparency, reducing administrative barriers for businesses, and introducing competitive procurement practices at the local level. In more than 40 municipalities, new practices strengthening transparency and accountability of local governments were introduced, including: individual social and communal subsidy accounts, models of public participation in budget-decision making, single-window social service delivery, transparent real estate development regulations, competitive procurement of housing and social services, and municipal purchases via the internet. The Center for Fiscal Policy, a USAID-funded Russian NGO, was a catalyst in the successful adoption of important intergovernmental budget reforms, which have significantly increased transparency, efficiency and accountability in budgeting at all levels of government.

USAID supported the Small and Medium Enterprise Policy Advocacy program, which continued to improve the business climate in 16 selected regions. Business associations were strengthened and encouraged to speak more effectively on their own behalf, maximizing the practical impact of their message. The associations formed coalitions to advocate effectively for policy changes and administrative reforms in their regions, and to combat corruption in the regulation of SMEs.

In cooperation with the International Finance Corporation and the Russian-American Business Dialogue, the Russian Federal Commission for the Securities Market, Ministry of Economic Development and Trade, and the Governments of Netherlands and Switzerland, the USDOC prepared and published a Corporate Governance Manual for enterprises in Russia. The USDOC, in conjunction with the AmCham in Russia, the Russian Chamber of Commerce and Industry, and other organizations also drafted and published a Business Ethics Manual for managing enterprises in emerging markets. Both manuals, published in English and Russian, serve as a resource guides and training tools for Russian and foreign directors, managers, and investors. The USDOC conducts seminars, workshops and other training programs in Moscow, St. Petersburg, Samara and the Russian Far East to encourage private sector adoption of international best practices, promote transparency and improve local corporate governance. Several universities are using the manuals as primary texts for graduate and executive level study, as well.

Civil Society: Russia's CSOs remain weak. The media does not have a strong tradition of investigative journalism, although a number of individual journalists throughout the country report on corruption cases, which sometimes results in prosecution of the offenders. In general, however, there is not a broad range of outlets, official or non-official, for citizens to voice their views concerning corruption or to report incidents of corruption. Many Russians routinely accept corruption as a burdensome but normal reality, and few are aware of the real net impact of the problem on their daily lives.

USAID funded a Public-Private Partnerships program, which built coalitions among business, NGOs, and local government to fight corruption. Anticorruption activities continued in the Tomsk, Samara, Irkutsk oblasts, and Primorskiy Kray. Public awareness campaigns and investigative reporting by local journalists kept the issue of corruption high on the public agenda in these areas. In 2005, the new Russian Anticorruption Partnership was launched, including over nine Russian regions. The Citizen Advocates Offices, which operate in regions with USAID support, provide over 2,500 legal consultations each year to victims of corruption and excessive bureaucracy. One case resulted in the restitution of 300,000 rubles (approximately US$10,000) to a family victimized by illegal actions of city officials. Several anticorruption laws are being drafted and adopted in these regions with the assistance of the Partnerships program.

UKRAINE

Government Efforts: In 2004, the Ukrainian people radically changed Ukraine's political landscape by standing up for their rights and successfully demanding that the results of the Presidential election reflect their will in what was known as the "Orange Revolution." In a watershed decision that demonstrated the rule of law over entrenched, corrupt power, the Supreme Court invalidated the falsified second round of the voting and called for a repeat vote. These events, which have changed the underlying dynamic between Ukrainian citizens and their government, created the possibility for advancing the rule of law and strengthening the fight against corruption.

The new Ukrainian Government which took office in February 2005, expressed its commitment to fight corruption. It faces serious challenges in delivering on the citizens' very high expectations for improvement. At issue are a government and economy pervaded with corruption; the task was not simply to root out discrete pockets of corruption. Over the government's first year in office, there have been success stories. Empowerment of the Internal Affairs Department within the Ministry of Interior led to the prosecution and firing of thousands of corrupt law enforcement officials who had preyed upon the public. The "Contraband - STOP" program focused on rooting out endemic corruption in the customs service. This program helped recoup tariff revenues of US$424.5 million for the government coffers in 2005. By closing loopholes favoring the well-connected, and by increasing integrity and enforcement within the State Tax Administration, in 2005 the government posted 46.8 percent growth in tax revenue over the previous year.

Ukraine has signed but not yet ratified the UNCAC.

Law Enforcement and Legal Systems: In the criminal justice and law enforcement spheres, the USG initiated programs to strengthen the independence and transparency of the judiciary and enhance the professional qualifications of judges and defense attorneys, thus ending the Soviet legacy of prosecutorial supremacy. The USG also initiated programs to support drafting a new criminal procedure code, bringing greater transparency to the pre-trial system, and promoting integrity awareness among midlevel managers and training staff in both the Customs and Border Guard Services. The USG has also supported the drafting of a comprehensive structural reform program for Ukraine's law-enforcement system along European Union norms, including a comprehensive approach to prosecuting corruption.

Transparent Governance: USAID's democracy and good governance programs supported a series of Parliamentary hearings on anticorruption, drafted anticorruption related legislation, trained NGOs in hearing procedures and policy analysis, promoted transparency in elections through election commissioner training, non-partisan voter education, and support for domestic and international elections observation. In the health sector, USG helped increase transparency in policymaking, finance, and procurement of tuberculosis and HIV/AIDS drugs through the development of a national policy group and an HIV NGO coalition. In education, a partnership with the GOU was launched to implement a comprehensive system of national testing for college admissions to combat rampant corruption in an area that affects virtually all families in Ukraine.

The USDOC launched a good governance program with the goal of building awareness and dialogue on business ethics and transparent business climates; providing tools, resources, and training to members of the private sector to enable them to develop governance programs; and fostering private-public sector cooperation in creating sustainable initiatives to promote good business climates over the long term. U.S., Ukrainian and international businesses expressed interest and agreed to participate in the program.

Civil Society: USAID-supported NGO projects, currently numbering over 20 grants to 15 NGOs, focus on preventing and exposing corruption through monitoring and watchdog activities, and provided increased access to justice for Ukraine's citizens through alternative conflict resolution and legal aid networks. An ongoing, nationwide public information campaign has raised awareness on corruption, exploring relationships between government, business, and society, the role of the state in battling corruption, and the European experience on such issues. Radio programs address how corruption affects the population's well being, both directly and indirectly; discuss ways to prevent and fight against corruption, with a special emphasis on how small business can contribute to the fight against corruption; address measures to prevent corruption in the utilities industry, the education system, and health care systems; and disseminate success stories about anti-corruption activities in Ukraine and elsewhere in the region. Support for anti-corruption initiatives engaging the media included investigative reporting training, media legal aid, and analysis of media ownership structures.

IV. CONCLUSION

Corruption remains a worldwide problem, affecting vital American interests. While a number of countries continue to make important strides in creating transparent, accountable systems to prevent, detect, and prosecute corruption, the effort against corruption is a constant battle. Longstanding USG diplomatic efforts and innovative new approaches to counter corruption worldwide have succeeded in bringing global attention to this serious problem and increasing global cooperation to fight it. Experience shows that a successful battle against corruption requires sustained and simultaneous attention on a number of fronts, including engaging law enforcement agencies, educating the public and civil society, increasing governmental transparency and internal oversight, and promoting good corporate governance. The incorporation of prevention measures into anticorruption conventions demonstrates that corruption is seen as a global problem, requiring a holistic approach to combat it.

Since the last report submitted in April 2004, the USG has helped to advance significant multilateral anticorruption commitments, including, most notably, promoting acceptance and implementation of UNCAC and also the "No Safe Haven" policy. Addressing kleptocracy and strengthening cooperation on recovery of illicitly acquired assets by corrupt officials remains a critical area of focus for the USG. In addition, the USG continues to promote new anticorruption commitments and enhanced implementation efforts in multilateral processes such as the Inter-American Convention and Special Summit of the Americas, Council of Europe conventions, Stability Pact Anticorruption Initiative, the APEC Anticorruption and Transparency (ACT) Initiative, and the UNDP-OECD MENA GfD Initiative and at the OECD. The USG will also explore new ways on engaging governments in Africa to strengthen their capacity to fight corruption.

From a diplomatic perspective, the biennial ministerial Global Forum process is by far the most high-level existing intergovernmental forum for promoting the fight against corruption. The USG continued its high-level participation in this effort including sending a senior delegation to Brazil in 2005, and is planning a similar effort for the next Global Forum in South Africa in 2007. The USG has focused attention and resources on promoting implementation of recommendations of mutual evaluation mechanisms and helping to develop effective governmental approaches to preventing corruption, providing USG experts and assistance to help over 60 countries implement anticorruption commitments. The USG has developed and funded innovative technical assistance programs that help to build the popular will against corruption and promote integrity within the private sector. The USG continues to enforce vigorously the Foreign Corrupt Practices Act (FCPA), to ensure robust implementation of the OECD Antibribery Convention, and work with the U.S. private sector to ensure that businesses operating abroad understand their responsibilities under the FCPA, including intolerance for corruption in transnational business transactions.

The USG also participates in key multilateral efforts to observe our domestic anticorruption efforts and has effectively showcased our efforts as a model for other countries. The USG will continue to pursue a mix of diplomatic, programmatic, and enforcement efforts to promote higher standards around the world relating to good governance (including corporate governance) and corruption, encourage mutual or self-evaluation of governments with regard to efforts to prevent, investigate and prosecute corruption offenses, and enhance cooperation and technical assistance to promote local actions in the fight against corruption.

The USG also supports the efforts of the International Financial Institutions (IFIs), as they work to strengthen the operations of the internal investigative function in each institution to combat corruption; help recipient countries improve governance and transparency in their public institutions; and, combat corruption in development project financing. Actions such as those taken by the World Bank to freeze loans to corrupt governments and pursue prosecution where contractors have engaged in corrupt practices, send the important message that development dollars should be safeguarded and used productively. The USG is also exploring ways to engage the IFIs on kleptocracy and related anticorruption issues including the return of illicitly acquired assets.

USG agencies -- including USAID, the USDOS, the USDOJ, the USDOC, the U.S. Treasury, and the OGE -- will continue to work closely with Congress, cooperating governments, multilateral institutions, and the NGO community, to ensure a strategic and effective correlation between these USG diplomatic and programmatic activities. Good governance and accountability creates conditions that lift people out of poverty, raise education and health levels, improve the security of borders, expand the realms of personal freedoms, nurture sound economic and sustainable development strategies, and create healthier democracies.

With the leadership of the United States and other dedicated parties, the international fight against corruption will continue to move forward. The U.S. is committed to working to ensure that, fifteen years from now, taking effective actions against corruption becomes second nature for most governments in the world.

APPENDIX

Glossary of Abbreviations and Acronyms

ABA

American Bar Association

ABA-CEELI

American Bar Association - Central and Eastern European Law Initiative

ACC

Anticorruption Commission (Bangladesh)

ADB

Asian Development Bank

AG

Attorney General

AmCham

American Chamber of Commerce

AMLA

Anti-Money Laundering Act

APEC

Asia-Pacific Economic Council

BDG

Government of Bangladesh

BMPIU

Budget Monitoring and Price Intelligence Unit (Nigeria)

BPE

Bureau of Public Enterprises of the Nigerian Government

BRR

Reconstruction and Rehabilitation Agency (Indonesia)

BSA

Board of Supreme Audit (Iraq)

CAFTA

Central America Free Trade Agreement

CCCI

Central Criminal Court of Iraq

CNA

National Anticorruption Council (Honduras)

CoE

Council of Europe

CONSUCODE

Peruvian government contracting agendy

CPA

Coalition Provisional Authority (Iraq)

CPI

Commission on Public Integrity (Iraq)

CPC

Criminal Procedure Code (Honduras)

CSO

Civil Society Organization

DGE

Department of Governance and Ethics (Kenya)

DOF

Department of Finance (Philippines)

DPP

Department of Public Prosecutions (Kenya)

EBRD

European Bank for Reconstruction and Development

EFCC

Economic and Financial Crime Commission (Nigeria)

EITI

Extractive Industries Transparency Initiative

FATF

Financial Action Task Force

FCPA

U.S. Foreign Corrupt Practices Act

FIU

Financial Investigation Unit

GAO

U.S. Government Accountability Office

G�D

Good Governance for Development in Arab States initiative

GOG

Government of Georgia

GOH

Government of Honduras

GOI

Government of Iraq

GOK

Government of Kenya

GON

Government of Nigeria

GOP

Government of Peru

GOR

Government of Russia

GOU

Government of Ukraine

GRECO

Council of Europe's Group of States Against Corruption

GRI

Government of the Republic of Indonesia

GRP

Government of the Republic of the Philippines

IACAC

Inter-American Convention Against Corruption

IAGGA

International Anticorruption and Good Governance Act

ICPC

Independent Corrupt Practices Commission (Nigeria)

IFES

International Foundations for Election Systems

IG

Inspector General (Iraq)

ILEA

U.S.-sponsored International Law Enforcement Academy

IMF

International Monetary Fund

IRI

International Republican Institute

KACC

Kenya Anticorruption Commission

KPK

Anticorruption Commission (Indonesia)

MCA

President George W. Bush's Millennium Challenge Account

MCC

Millennium Challenge Corporation

MENA

Middle East and North Africa Initiative

MOF

Ministry of Finance (Indonesia)

MOU

Memorandum of Understanding

MTEF

medium term expenditure framework (Nigeria)

NABRO

National Assembly Budget and Research Office (Nigeria)

NDI

National Democratic Institute

NGO

Non-Governmental Organizations

NMLB

National Money Laundering Bureau of Georgia

OECD

Organization for Economic Cooperation and Development

OGE

United States Office of Government Ethics

OTA

U.S. Department of Treasury's Office of Technical Assistance

PNP

Peruvian National Police

PPATK

Financial Transaction Reports and Analysis Center (Indonesia)

PETCCE

Program for Efficiency and Transparency in the Procurement and Contracting of the State (Honduras)

PWYP

Publish What You Pay

RICO

Racketeer Influenced and Corrupt Organization statute

RLA

Resident Legal Advisor from the U.S. Department of Justice

SIAF

Peruvian government financial administration system

SNIP

Peru's public investment system

TAG

Transparent and Accountable Governance project (Philippines)

TI

Transparency International

UNDP

United Nations Development Program

UNCAC

United Nations Convention against Corruption

USAID

United States Agency for International Development

USDOC

United States Department of Commerce

USDOJ

United States Department of Justice

USDOS

United States Department of State

USG

United States Government



Back to Top
Sign-in

Do you already have an account on one of these sites? Click the logo to sign in and create your own customized State Department page. Want to learn more? Check out our FAQ!

OpenID is a service that allows you to sign in to many different websites using a single identity. Find out more about OpenID and how to get an OpenID-enabled account.