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U.S. Department of State - Great Seal

U.S. Department of State

Diplomacy in Action

2002 - 2003


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

[Released April 2004]

TABLE OF CONTENTS

I.  THE INTERNATIONAL ANTICORRUPTION AND GOOD GOVERNANCE ACT
II. USG INTERNATIONAL ANTICORRUPTION INITIATIVES

  1. General Policy Framework
  2. Specific New Initiatives

III. SELECT USG ANTICORRUPTION ASSISTANCE PROGRAMS

  1. Ecuador
  2. Georgia
  3. Guatemala
  4. Indonesia
  5. Iraq
  6. Kenya
  7. Nigeria
  8. Philippines
  9. Russia
  10. Ukraine
IV. CONCLUSION

V.  APPENDIX - GLOSSARY OF ACRONYMS

 



I. THE INTERNATIONAL ANTICORRUPTION AND GOOD GOVERNANCE ACT

The issue of corruption remains a matter of increasing importance to the United States, other governments, inter-governmental organizations, and non-governmental organizations (NGOs) all over the globe. Corruption destabilizes critical rule of law and institutions that underpin democracy throughout the world, distorts the operation of free markets, impairs economic stability and growth, and endangers security by enabling the violation of borders, distortion of justice systems, and empowerment of criminal organizations.

The United States Government (USG) continues to advance actively bilateral and multilateral efforts to reduce corruption, promote transparency, and improve governance. President Bush, Secretary of State Powell, Secretary of Commerce Evans, and Administrator Natsios have forcefully articulated that the fight against corruption is an important foreign policy objective for the USG.

Despite our leadership in this area, USG diplomatic and multilateral initiatives will succeed only if governments and the private sector take the necessary steps to build institutional capacity to prevent and deter corruption in their countries. The political will of individual governments and the popular will of citizens and civil society is crucial. USG diplomatic efforts and technical assistance continue to play a role in helping countries develop and take advantage of political and popular will. 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 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, inspectors 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; and 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, 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 Agency for International Development, 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, provides a detailed history of the international fight against corruption and the USG role in developing attention to the issue. This third report, like the second submitted to Congress in April 2002, focuses on notable activities by the USG since issuance of the last IAGGA report.

II.  USG INTERNATIONAL ANTICORRUPTON INITIATIVES

The USG has clear foreign policy and national security interests in seeing corruption addressed on an international scale, because it is, as a matter of course, affected by corruption outside its borders. Corrupt interests continually hamper global economic activity of American firms, which can lose contracts to competitors offering bribes or be harmed by insufficient judicial fairness. Corruption deters foreign investment in many countries, stifles economic growth and sustainable development, and distorts prices and undermines legal and judicial systems. By diverting or misallocating government resources, corruption prevents public benefits from reaching those most in need of them. Corruption can also interfere with the accomplishments of USG foreign assistance goals and programs. Corruption facilitates 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 that corruption has on political systems and democracy threatens vital American interests. Emerging democracies are particularly vulnerable to corruption. Public perception of corruption in such countries de-legitimizes governments in the eyes of their publics, and, at its most extreme, can substantially impair the ability of a democratic government to maintain the rule of law. The result can be fatal to well-intentioned democratic governments and, in the most extreme cases, to the entire democratic system within these countries.

Poor governance and corruption help to create the 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 and unknowingly, 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 has become a key foreign policy priority for the President and his Administration. President Bush, in a statement to representatives of over 120 countries at the Third Global Forum on Fighting Corruption and Safeguarding Integrity in May 2003, remarked that "fighting corruption is essential to meeting the great challenges of our time."

A.  General Policy Framework

In advancing the objectives of the IAGGA, the USG has employed 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 government and other aid programs that assist these efforts. The most notable achievement in this area has been the recent completion of negotiation of the United Nations Convention Against Corruption (UNCAC), in which the USG actively participated. The UNCAC was opened for signature in December 2003. The USG has recently 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 Account (MCA) assistance. This also played a role in USG leadership in developing and announcing a "G-8 Declaration on Fighting Corruption and Improving Transparency" at the G-8 Evian Summit in 2003 and efforts with economies in the Asia Pacific region to enhance the Asia-Pacific Economic Council (APEC) Leaders' commitment to develop specific domestic actions in 2004 to combat corruption.

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. The USG, working in conjunction with the United Kingdom, has developed a coordinated and holistic anticorruption pilot assistance program within the G-8 that can be targeted to countries that exhibit strong political will to address corruption problems.

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 is the best expediter of political will against 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.

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. multinational business from bribing overseas, strengthen and enforce corruption laws, promote good public and corporate governance, and build tools and institutions to prevent corruption. We also work closely with other nations to combat the international aspects of corruption, such as money laundering and transnational flight, 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 MCA and within the G-8 process.

B.  Specific New Initiatives

Under the general rubric described above, there are several new initiatives, both diplomatic and programmatic, that reflect innovative, holistic approaches to combating corruption globally, in close coordination with other nations. These include:

Anticorruption Compacts: The Anticorruption Compact is a new and 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, rather than one sector at a time, the Compacts seek to raise the bar across government institutions and make transparency efforts in different sectors mutually reinforcing. The Compacts will require governments to commit in writing to reform in key areas 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, countries will receive assistance targeted to these areas. The Compacts will include metrics to monitor achievement of these goals. The Compact concept was developed during finalization of the G-8 Declaration on Fighting Corruption and Improving Transparency, released at the G-8 Evian Summit in June 2003, and will be tested in pilot multilateral assistance efforts resulting from that declaration.

MENA: The USG is supporting a core of regional leaders, along with the Organization for Economic Cooperation and Development (OECD) and the United Nations Development Program (UNDP), to develop a holistic and incentive-based regional Middle East and North Africa (MENA) good governance and investment initiative, anchored on shared responsibility, partnership and cooperation, and reforms that ensure greater transparency and accountability. The initiative has three main pillars: (1) anticorruption and public governance, including reform of public administration and modernization of the state; (2) mobilizing investment for development, both locally and internationally; and (3) corporate governance and market efficiency. In addition to the growing number of MENA countries, key partners in this effort include the OECD, UNDP, the League of Arab States, the Gulf Cooperation Council, the Organization of Islamic Conference, the European Union, the World Bank Group, the Arab Union Banks, the Arab Center for the Development of the Rule of Law, several investment and development agencies, private sector groups, and several leading NGOs.

No Safe Haven: At the May 2003 Third Global Forum on Combating Corruption and Safeguarding Integrity in Seoul, Korea, the USG committed to deny safe haven to corrupt officials, those who corrupt them, and their assets. The USG has strongly encouraged other nations to undertake similar commitments, leading to inclusion of the so-called "No Safe Haven" commitment in both the G-8 Evian Declaration and the Special Summit of the Americas' Declaration of Nuevo Leon. The USG continues to work vigorously to implement this commitment, by issuing a Presidential Proclamation to deny entry to certain corrupt officials, those who corrupt them, and their dependents and by increasing mutual legal assistance and monitoring the implementation efforts of other nations. The USG hopes that APEC will adopt a similar commitment at the November 2004 Summit.

Global Assistance Strategy: The U.S. Agency for International Development is developing a new anticorruption assistance strategy to identify ways that assistance programs can make a greater contribution to USG-wide efforts. This cross-sectoral strategy builds on the experience with programs that focused 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, to develop multi-sectoral approaches to addressing the problem, to increase and sustain efforts in this area, and to build new knowledge to improve assistance practice.

III. SELECT USG ANTICORRUPTION ASSISTANCE PROGRAMS

The IAGGA acknowledges that a holistic approach to USG foreign anticorruption assistance in a wide range of areas is the key to combating corruption. Numerous USG agencies -- including the Agency for International Development, the Department of State, the Department of Justice, the Department of Commerce, the Department of the Treasury, and the Office of Government Ethics - 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 where it does not already exist, 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 eleven 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, it is important to bear in mind that the passage of laws or issuance of regulations, in and of itself, has no effect on levels of corruption. Only active implementation of laws, policies, and programs, combined with political and popular will to demand accountability, will bring about enduring change. The countries discussed in this report face significant corruption problems and often uneven political and popular will -- a real commitment to improve transparency needs to be sustained for some time before the effects of changes can be felt.

A.  Ecuador

Government Efforts: In February 2003, following the publication of a National Dialog report on corruption, Ecuadorian President Lucio Gutierrez issued an executive order setting a comprehensive anticorruption agenda and reorganizing the Civil Commission for Corruption Control's lead role in Ecuador's war on graft and ordered Government of Ecuador (GOE) agencies to go on-line with public procurement. The decree also mandated the creation of the Ecuadorian Anticorruption System (SAE), an interagency task force with a broad mandate to fight corruption nationwide. Ecuadorian law also excludes suppliers of public goods and services from making campaign contributions and limits a single donor to contributing no more than ten percent of the total amount raised by a party. Since 2002, complete information on individual donations must be made available to the public, although in practice it is inaccessible. The GOE is a party to the Inter-American Convention Against Corruption (IACAC) and participates in its Follow-Up Mechanism; additionally, it is a party to the United Nations Convention Against Transnational Organized Crime (UNTOC) and has signed but not yet ratified the UNCAC. The GOE will host this year's General Assembly of the Organization of American States, with the theme of anticorruption.

Law Enforcement and Legal Systems: With the assistance of the USG, the GOE established the first national inter-institutional commission, headed by the Supreme Court and the Public Ministry, to advance criminal justice reforms that will enable institutions to strengthen their capacity to effectively prosecute criminal cases, including corruption-related crimes. USG assistance has enabled the GOE to undertake a thorough and far-reaching evaluation of the Code of Criminal Procedures, provide training in oral procedures to 500 judges and prosecutors, and design and start up an integral plan to improve the application of the new criminal justice system. The USG also supports GOE judicial independence and anticorruption efforts by sponsoring the design and implementation of a judicial evaluation system. In addition, the USG is helping the Internal Affairs Unit of the National Judicial Council to improve its capacity to sanction administrative and corrupt practices within the judiciary.

Transparent Governance: The USG, World Bank, and other donors are encouraging its local counterparts to support the SAE and to stimulate implementation of the SAE agenda. The USG is supporting SAE implementation through a major USG-funded anticorruption program that started in early 2004. The framework provides strategic parameters for USG anticorruption efforts in three broad areas including: increasing transparency to reduce discretion; strengthening investigations and sanctions to decrease impunity; and promoting a culture of democratic values to strengthen ethical conduct. The program's goals are to increase the transparency and accountability of key democratic institutions and processes, to improve the investigative and sanction capacity of institutions legally empowered to carry out such functions, and to bolster the ethical conduct and democratic values of public officials and citizens.

The USG is contributing to important achievements in decentralization policy and greater transparency in municipal contracting. Over fifteen local governments, representing a wide range of ethnic groups, population densities, and political affiliations, have established citizen audit committees for oversight of project implementation, definition of utility and service rates, levels of service, and beneficiary areas for coverage. With the support of the USG, sixteen additional local governments will replicate these efforts. The USG has also assisted the Municipality of Quito in undertaking a thorough assessment of corruption perception and practices. Based on this assessment, Quito's government designed a major program to enhance transparency and improve internal processes to avoid corrupt practices. In 2004, the USG will provide support for the implementation of this initiative.

Civil Society: The USG supported NGO partners that were instrumental in the design, formulation and validation of priority actions for the SAE. This system provides the framework for the implementation, coordination and oversight of GOE and civil society anticorruption efforts. The USG provides major support to a nationwide civic organization, the Citizen's Participation Corporation (PCE), which engages citizens, particularly youth, in promoting transparency in the country's democratic processes and institutions. PCE played a major role in Ecuador's free and fair elections of 2002 and is now preparing for the 2004 sub-national elections. It also plays a major role in the monitoring of campaign spending and in promoting the enforcement of the law against political parties that exceed campaign-spending limits. In early 2004, PCE presented a major electoral reform package that seeks to improve campaign-spending legislation. The USG supports the GOE and the civil society network Access Coalition in the implementation of efforts to disseminate, discuss, and promote Congressional approval of freedom of information legislation. In 2004, the USG will continue to provide support for the effective application of freedom of information rights and legislation in Ecuador.

B. Georgia

Government Efforts: A major thrust of Georgia's Rose Revolution in November 2003 was to break the status quo of rampant and systemic corruption. Since taking office in January, President Saakashvili has clearly announced that combating corruption is a priority, and the new Government of Georgia (GOG) has begun a number of initiatives to decrease incentives for corruption. For instance, President Saakashvili has reaffirmed a commitment to draft amendments to the criminal procedural code in order to bring greater transparency to the criminal procedure process. The new Prosecutor General is reforming the Procuracy to emphasize the fight against corruption, and in this regard has already initiated cases against several high-level officials of the former regime. The GOG launched a new Anti-Corruption Policy Coordination Department at the National Security Council. In an effort to streamline investigations into economic crimes, the Minister of Finance has begun to consolidate agents into a dedicated financial crimes unit. USG assistance to the Ministry of Agriculture and Food has helped this Ministry to create an Internal Control Service to carry out internal inspections. The GOG has also begun to address corruption in the Georgian Railways Administration. The GOG is a member of the Group of States Against Corruption, a party to the Council of Europe (CoE) Civil Law Convention on Corruption (CLCC), and has signed but not yet ratified the CoE Criminal Law Convention on Corruption (CRCC) and UNTOC.

Law Enforcement and Legal Systems: The USG supports a U.S. Department of Justice residential legal advisor (RLA) in Tblisi, who works closely with the Georgian Procuracy on criminal law reform and anticorruption and anti-trafficking efforts. The Procuracy created a new multi-agency unit, the National Money Laundering Bureau (NMLB), to investigate and prosecute money laundering and its predicate crimes, including corruption. In late 2003, an FBI polygraph team vetted candidates seeking a position in the NMLB. In addition, in early 2003 the Procuracy began to implement a moral character and professional fitness review process for all Georgian prosecutors supported by the USG. The RLA helped them to develop a comprehensive questionnaire that included, among other components, an extensive financial disclosure section as well as specially formulated questions designed to measure Georgian prosecutors' tolerance of corrupt practices and acceptance of rationalizations for corruption. These questionnaires are currently being evaluated by a committee, which includes representatives from civil society. The USG has provided anti-money-laundering training to the Financial Monitoring Service, an independent agency under the National Bank of Georgia. USG funding to the American Bar Association's Central and Eastern European Law Initiative (ABA-CEELI) assists the Georgian legal community in improving the justice system and the private bar, with an emphasis on enhancing integrity in the judicial system.

Transparent Governance: USG-funded Urban Institute assists local governments in modernizing their budget processes and making budgets understandable to citizens. It also helps local governments understand and implement open meeting and transparency requirements. NGOs more frequently use freedom of information laws to obtain local government and school budgeting information to monitor local officials. In 2003, the USG funded a Petroleum Revenue Enhancement Workshop to highlight corruption in this area and its resulting significant loss of revenue to the GOG. In February 2004, technical assistance was provided to the Petroleum Advisory Group to follow up on the 2003 workshop recommendations and to develop a plan of action. With technical assistance provided by the USG, the Petroleum Advisory Group is planning a workshop and training program on petroleum tax collection issues for April/May 2004. In the energy sector, a four-year USG program is working to improve the overall performance of the electricity sector and address electricity generation and distribution issues in the country. This program incorporates several anticorruption measures, including metering, transparent billing, and collections procedures.

Civil Society: Prior to November 2003, the USG established an anticorruption initiative to: (1) disseminate new anticorruption tools through outreach seminars and workshops; (2) conduct policy research and analysis through local organizations to improve understanding of the causes, patterns, and costs of corruption; (3) identify training needs and anticorruption advocates; and (4) administer a grants program to enhance public awareness and monitoring of corruption and anticorruption efforts.

USG-funded ABA-CEELI is a member of a coalition of NGOs working on anticorruption efforts in Georgia, including those engaged in local government "watchdog" functions and those that monitored the efforts of the now abolished Georgia Anticorruption Bureau. In December 2003, the NGO coalition submitted a shadow corruption status report, in connection with Georgia's participation in the Anticorruption Action Plan, signed by Georgia and five other transition countries at the September 2003 meeting of the OECD Anticorruption Network for Transition Economies. The USG funds the Georgian Liberty Institute to implement anticorruption efforts in the energy sector, including raising public awareness, monitoring defaulted accounts, improving political accountability, and improving media capacity to report on corruption. Anticorruption in the property registration system is provided through the Association for Protection of Landowner's Rights' land titling program. An anticorruption pilot program for five- to twelve-year-old children will pilot a national campaign for school children on the costs and problems of corruption.

In July 2003, USG training program alumni established the Georgia Business Ethics Working Group, in cooperation with the USG and the American Chamber of Commerce in Georgia. The Working Group brings together representatives from the public, private, and NGO sectors, as well as academia and media and will finalize a Georgian Business Code of Conduct in the summer of 2004. In conjunction with the code, the Working Group has conducted both training sessions and a successful web conference, attracting more than 400 postings on the topic of business ethics and anticorruption.

C.  Guatemala

Government Efforts: In his first fifty days in office, Guatemalan President Oscar Berger named a Presidential Commissioner for Transparency and removed the Attorney General, who was accused of corruption, removed the head of the tax authority for corruption and began a significant effort to investigate and prosecute official corruption, including the highest levels of the previous administration. The Constitutional Court removed the immunity of former President Portillo. Most significantly, President Berger has promoted the International Commission to Investigate Clandestine Groups, which will also investigate official corruption, and worked to improve the functioning of the National Commission for Transparency and Against Corruption established in December 2002. A law on probity entered into force in February 2003, containing rules and processes for acting against public officials and prescribing sanctions. All executive branch officials have provided fiscal declarations required by a new law. The Government of Guatemala is party to the IACAC and participates in its Follow-Up Mechanism; additionally, it is party to the UNTOC and has signed but not yet ratified the UNCAC.

Law Enforcement and Legal Systems: The USG supports the work of the Anticorruption Section of the Guatemalan Public Ministry, charged with prosecuting criminal cases related to corruption and supports institutionalized training units for the Public Ministry, courts, and public defense with objective standards for personnel management and performance monitoring. Additionally, the USG brought in former prosecutors from Peru to provide suggestions to strengthen the anticorruption unit and is initiating work in a pilot jurisdiction to reduce police corruption. The USG has also canceled the visas of a number of current and former officials charged with or implicated in acts of corruption.

Transparent Governance: The National Comptroller General's Office (NCGO), the supreme audit institution in Guatemala, has received USG assistance, which includes development of ethics training materials as well as technical assistance and training to improve financial auditing practices, to make information on findings more accessible to the public, and to increase awareness about fraud. The USG recently signed an agreement with NCGO that allows NCGO to audit counterpart contributions provided by the Government of Guatemala under the Maya Biosphere Project, including U.S. $16 million in counterpart contributions. The USG also provides technical assistance and training to the new Office of the Presidential Commissioner on Transparency and works with local governments to make more transparent their financial management and investment planning processes. Mayors provide detailed information to the community on how municipal funds were spent during each quarter and what the priority expenditures will be for the next quarter. Also, citizens are participating in newly created Municipal Planning Offices that work with communities in setting guidelines and overseeing municipal investment and planning decisions.

Civil Society: The USG provided investigative and ethics training to local journalists to raise the level of awareness among Guatemalan journalists about the value added of ethical journalism. The training also focuses on ways to provide more extensive coverage of corruption problems in Guatemala. Guatemalan civil society organizations receive technical assistance, training and grant funds through the Civil Society Program, targeted specifically toward transparency and anticorruption. This program is providing assistance to a civil society coalition that includes the local chapter of Transparency International (TI), the Chamber of Commerce, and a prominent economic think tank, which has supported oversight efforts within the Comptroller General's Office as well as the Public Ministry's Anticorruption Unit. A national network of NGOs established with USG support, called the Citizen Observatory, has been critical in moving forward freedom of information legislation and promoting citizen access to procurement information. The USG will also support civil society organizations in commenting on the Government of Guatemala's report on compliance with IACAC, due in February 2005.

D.  Indonesia

Government Efforts: The Government of Indonesia (GOI) is a member of the Asian Development Bank (ADB) - OECD Anticorruption Initiative for Asia-Pacific. The GOI is still defining target problem areas following the 2002 Leaders' statement on transparency. Indonesia supports an incremental approach to combating corruption in APEC. However, a strong anticorruption stance by the GOI is unlikely in advance of the mid-2004 elections. Indonesia established an anticorruption commission in December 2003 and in November 2003 amended its Anti-Money Laundering Law to meet international standards. The GOI has signed but not yet ratified the UNCAC and UNTOC.

Law Enforcement and Legal Systems: Working with Bank Indonesia, the GOI Ministry of Finance, the GOI Department of Justice, and the Parliament, the USG provided assistance in the drafting and implementation of a new anti-money laundering law that was passed by Parliament in March 2002. The USG helps the Ministry of Finance in designing a process for trade policy development that is open and minimizes the participation of the corruption-prone GOI customs' bureaucracy. The USG supports an Indonesian National Police Assistance Program to build a democratic, civilian-controlled police institution. The program includes provisions to establish a code of conduct for police officers and a police disciplinary system to foster integrity and root out corruption. Official support within the Indonesian National Police for the anticorruption measures has thus far been weak. Another USG project focuses on reducing corruption in the courts by encouraging development of an independent unitary bar association and bar association code of ethics. The project also provides institutional development support for two GOI commissions that are officially charged with rooting out corruption -- the Corruption Commission and the Commission for the Investigation of the Wealth of Government Officials.

Transparent Governance: The USG promotes the development of an independent regulatory body within the Ministry of Telecom, which will improve transparency in the GOI decision-making process. Futures markets in Indonesia have traditionally involved much GOI intervention, which allows substantial opportunities for corruption. USG experts have been helping the GOI draft and review a new Law on Investment that will require one-stop registration and national treatment of investors and work with the oversight agency to establish mechanisms to enforce adherence to laws and regulations, including procedures for vetting brokers and issuing licenses relying on "fit and proper" tests. The USG works with Bank Indonesia and the International Monetary Fund to strengthen the supervision and regulatory network for banks and other financial institutions. The USG has continued to build its relationship with the Indonesian Supreme Audit Institution, providing training during 2003. The training improved skills in financial auditing and fraud awareness.

Civil Society: A USG-funded legal research organization conducted a training program on corruption investigation in order to increase the capacity of Indonesian legal and anticorruption NGOs to investigate corruption cases. In cooperation with the Asia Foundation, the USG also administers grants to NGOs that provide anticorruption-related assistance, such as a Lombok Island-based NGO that mobilized its community to address corruption, collusion, and nepotism in the Province of West Nusa Tenggara. Another grantee focuses its work in Yogyakarta and Central Java, mapping out public service problems and priorities and creating a module for training community organizers who will help civil society groups engage local government on issues of accountability and corruption.

E. Iraq

Coalition Efforts: The Coalition Provisional Authority in Iraq and Iraqi governmental institutions have been working closely to develop institutions that will be critical to detecting and preventing corruption. Since January, several new institutions have been created to address public corruption problems. For example, the Commission on Public Integrity (CPI) will be responsible for prosecuting corruption cases, developing regulatory and preventive measures for government implementation, and conducting public outreach programs to make citizens aware of corruption and the work of the CPI. In addition, a new law requires that Offices of Inspectors General be created in all major Ministries. Existing Iraqi governmental institutions, such as the Supreme Audit Board, and processes, such as the public procurement law and regulations, are also in the process of being strengthened, particularly with an eye to preventing corruption and promoting transparency.

USG and other donor assistance work in Iraq is also being targeted in areas that will be useful to fighting corruption. In December 2003, Iraq supplemental funds were allocated specifically to provide anticorruption assistance in Iraq, a portion of which will be used to target development of civil society activity and institutions in the area of promoting transparency and fighting corruption. Technical assistance has and will continue to include helping to develop laws, systems, and institutions that provide necessary checks and balances in the handling of public finances and in public procurements, and to develop a law enforcement capacity that is effective and active in the fight against corruption. Some examples of assistance are provided below.

Law Enforcement and Legal Systems: A USG law enforcement agency will help stand-up the investigation and prosecution arm of the new CPI. Assistance will include developing the investigative capacity to pursue corruption-related crimes and to develop information systems necessary to carry out law enforcement functions of the CPI. CPI is also developing new codes of conduct and financial disclosure requirements for Iraqi government employees. The United States is funding assistance to the Iraq judiciary, particularly in the area of strengthening judicial integrity. Assistance will include helping to revise and enforce an Iraqi judicial code of ethics and provide ethics-related training, both in-country and overseas.

Transparent Governance: The USG is funding extensive work with the Iraqi Ministry of Finance and other major ministries to install effective systems for tracking financial expenditures and revenues. A priority effort is underway to revise and strengthen procurement laws and processes, which includes U.S.-funded assistance at the governate level to help local government authorities monitor revenues and expenditures. Technical expertise will soon be provided to the Supreme Audit Board and the newly created Offices of Inspectors General.

Civil Society: USG assistance is already helping to develop solid civil society institutions in Iraq. One initiative involves working with community-based, grass roots groups on democratization by helping them organize and work with local governments and donors on community development projects and aiding them in developing effective oversight capacity of these efforts. More formal training and capacity development is being provided to existing NGOs, business associations, and civic groups. The next phase of civil society development efforts includes broader efforts to expand and strengthen civil society organizations, including the establishment of Civil Society Resource Centers throughout Iraq, which will focus in part on anticorruption.

F. Kenya

Government Efforts: The Government of Kenya (GOK) hired Kroll International in 2004 to investigate billions in looted assets spirited offshore during the Moi regime. Nairobi city councilors were ordered to repay millions from falsified expense claims after official investigations. Fifty magistrates named in a report on judicial corruption have been fired. A Parliamentary Public Accounts Committee, armed with up-to-date Auditor General reports for the first time in years, has been vocal in allegations against senior ministers of corruption in government tenders. Assets in government investigations were placed in the receivership of the Kenyan Anti-Corruption Commission to prevent their removal from the country. On May 1, 2003, Kenya signed into law two new anticorruption laws -- the Economic Crimes and Anti-Corruption Act and the Public Officers' Ethics Act -- and began efforts to establish an asset disclosure system. The Kenyan chapter of the African Parliamentarians Network Against Corruption prepared a 'list of shame' identifying specific instances of official corruption. Kenya has signed but not yet ratified the African Union Convention on Preventing and Combating Corruption (AUCPCC). In 2003, Kenya was the very first nation to sign and ratify the UNCAC and has since become a champion among African nations, encouraging its neighbors also to pass the Convention.

Law Enforcement and Legal Systems: Throughout 2003, the USG increased support to anticorruption programs in Kenya as the Government of Kenya has accelerated its own efforts to promote greater transparency and accountability by assisting the GOK with the development of their Governance, Justice, Law and Order Sector reform program, which includes the GOK's strategy for promoting ethics, integrity, and anticorruption. The USG pledged support to the newly created Office of the President's Department of Ethics and Governance and to the revived Department of Public Prosecutions (DPP), including U.S. $1,500,000 to support the GOK's anticorruption initiatives, which are being coordinated through these two units. Initial activities include the development of a computerized system for recording and analyzing assets disclosure forms that must be completed by all GOK employees in accordance with the Public Officers' Ethics Act, the establishment of a Public Complaints Unit, and the launch of a national five-year anticorruption media campaign. USG assistance to the DPP will include technical assistance to increase the DPP's capacity to investigate and to prosecute corruption offenders.

The USG will fund a Resident Legal Advisor, as well as short-term technical experts, to advise the DPP's State Counsel and will provide complementary support for the establishment and staff training of the new Anti-Corruption, Economic Crime, Serious Fraud, and Asset Forfeiture section of the DPP. In addition, the USG provided funding for workshops on the new Proceeds of Crime and Anti-Money Laundering Bill, which would complement the Economic Crimes law by providing for seizure of the proceeds of corruption and ordinary crime.

Transparent Governance: In close collaboration with the donor community in Kenya, the USG identified four major areas for anticorruption work: (1) increasing public awareness of corruption issues and access to information regarding government processes; (2) promoting ethics and integrity among public servants, including the disclosure of assets; (3) improving the effectiveness of the GOK units specializing in transparency and accountability, including the Public Complaints Unit within the Department of Governance and Ethics and the Anti-Corruption section of the Department of Public Prosecutions; and (4) dialogue and debate among civil society, the private sector, and GOK bodies to advance anticorruption reforms. Also in 2003, the USG awarded new grants to the Institute of Economic Affairs, the Kenya Institute of Supplies Management, and the Center for Law and Research International to highlight the costs of corruption in the judiciary, to advocate for greater self-regulation among supplies management agents in order to reduce corruption in procurement transactions, and to monitor the GOK's progress in tackling corruption. In support of the Office of the Auditor General, Kenya's supreme audit institution, the USG has provided financial audit training and reached an agreement in November 2003 allowing the Auditor General to conduct audits of certain USG grants to the GOK. The agreement to conduct audits indicates that Kenya has taken a new approach in extending the role of its Supreme Audit Institution in government accountability and recognizes their ability to meet professional standards required for the task.

Civil Society: USG support to civil society includes grants to TI-Kenya and the Center for Governance and Development. TI-Kenya is in the last year of a four-year grant. Key elements of the grant include conducting research to provide benchmarks of integrity and efficiency in public organizations, increasing public awareness on corruption, and serving as a secretariat for the Kenyan chapter of APNAC. One of TI-Kenya's key products is the innovative and influential Kenya Bribery Index (KBI), which ranks citizens' experiences of bribery encountered when interacting with GOK ministries, departments, and agencies. The KBI captures multiple dimensions of the everyday impact of bribery upon Kenyans, including the magnitude, incidence, and severity of bribes. Another important civil society partner -- the Center for Governance and Development (CGD) -- is in the last year of a two-year grant to addresses corruption and bad governance in Kenya by working with Parliament and stakeholders to assist with drafting legislation to further the democratic process. CGD also monitors developments in various economic sectors to ensure that new legislation addressing corruption is put in place and implemented effectively. Civil society efforts were instrumental in drafting and lobbying for the May 1, 2003 legislation as well as significant regulatory changes that promoted transparency in the December 2002 elections.

In March 2004, the ABA Africa Law Initiative started working to develop an 18-month sustained anticorruption program, intended to enhance Kenya's commitment and ability to prevent and combat corruption. To that end, the ABA Anticorruption Advisor will provide to Kenyan governmental and non-governmental entities legislative and regulatory policy advice, training, and institution building support.

G. Nigeria

Government Efforts: The Government of Nigeria (GON) approaches corruption on multiple levels, including law, bureaucratic control, and expanded law enforcement. In February 2004, President Obasanjo signed the Economic and Financial Crimes Act, long advocated by the USG, to strengthen the Economic and Financial Crime Commission (EFCC) established in 1993. The EFCC conducted several prosecutions in 2003 and 2004. The Independent Corrupt Practices Commission (ICPC), the GON's main corruption investigation body outside the executive branch, facilitated a number of major arrests in December 2003 after passing constitutional challenges. In June 2003, the Budget Monitoring and Price Intelligence Unit (BMPIU) was established in the Presidency to check contracts for corruption and fraud. The GON also began participating in the G-8 Comprehensive Transparency Initiative in 2003. The 2002 Electoral Act placed limits on donations to political parties by individuals and corporations. The Bureau of Public Enterprises (BPE) set up an anticorruption and transparency unit to root out corruption in government parastatal entities. The GON is a party to the UNTOC and has signed but not yet ratified the AUCPCC and UNCAC.

Dora Akunyili, Director General of Nigeria's National Agency for Food and Drug Administration and Control, won a Transparency International Integrity Award in 2003 for her persistence in prosecuting illegal and fake drug traders and reducing the manufacture and importation of counterfeit drugs. In 2003, the report of the Nigeria Governance and Corruption Survey Study was released and presented to government agencies, stakeholders, and the general public. A massive anticorruption public awareness campaign, through leading Nigerian television and radio stations, was embarked upon through a collaborative effort between the U.S. embassy and the ICPC. Twenty-six workshops were held with key stakeholders in the six geopolitical zones of the country to disseminate the report findings and make recommendations to the government through the ICPC on ways to combat corruption in government and private enterprises.

Law Enforcement and Legal Systems: The USG provides advisory assistance and training to ICPC prosecutors and investigators. The project is designed to assist the ICPC in developing comprehensively its capacity to combat and prevent corruption. The project provides specific criminal procedure, investigative, prosecutorial, and administrative skills development and technical assistance to Commission staff and other GON officials, including criminal prosecutors and investigators. The USG also provides support to state judiciaries to improve judicial performance and implementation of the Judicial Code of Conduct.

Transparent Governance: The USG works with several international and domestic civil society organizations to promote transparency, accountability, and the rule of law among the general public, often in programs coordinated with the ICPC, EFCC, BMPIU, and other anticorruption entities in the GON. The USG conducts state and federal legislative assistance programs to strengthen committees overseeing executive functions in the areas of budget preparation, privatization, and extractive industries. Political party development activities helped to shed light on the relationship between money and politics, particularly in the area of campaign finance. Rule of law programs supported the work of Nigeria's judicial ethics committee, resulting in the production and unanimous adoption of a uniform code of conduct for court employees. The program is now supporting civil society groups enlisted to monitor the program's pilot courts and to verify that the code of conduct is being adhered to in practice. The USG also provided key support in the areas of voter registration and electoral administration during the 2003 elections that helped to make these processes more transparent.

The Promoting Stakeholder Participation in Economic Transition project improved transparency and accountability in budget-making and implementation processes, so that these could become more responsive to citizens' development needs and priorities. Economic and budget literacy programs improved civic awareness, especially in the revenue flows deriving from the lucrative extractive industrial sector. Through assistance to the Budget Office of the Federation in the Ministry of Finance and to the BMPIU in the Office of the President, the USG strengthened Nigeria's institutional capacity of the target organizations in making the budget process more transparent, participatory, and responsive to the needs of the Nigerian people. In 2003, the USG concluded the technical assistance it provided to the BPE, giving it a policy development role that is related to, but substantially wider than, its core mission of privatization. The transparency best practices and procedures adopted by the BPE led the World Bank to provide technical assistance to the organization.

Civil Society: Civil society programs focused on the political and cultural aspects of corruption in the Nigerian government, in particular, the bureaucracy's "culture of secrecy." Local partners worked closely with the National Assembly to move two pieces of key legislation (the Freedom of Information Bill and the Whistleblowers Bill) through the House and Senate. The civil society coalition has also pressed for an initiative, now adopted by the government and the Federal Ministry of Finance, to publish the federal funds allocated to each state and local government every month. The publication has already generated questions as to the use of these funds. The USG's implementing partner also supported public efforts to publicize public officers' asset declarations, currently on file at the Code of Conduct Bureau. The Labor Advancing Democracy and Economic Reform program promoted accountability in Nigeria's vast labor movement through support it provided to the Nigerian Labour Congress. The USG is also funding the National Strategy Information Center (NSIC) to conduct "culture of lawfulness" training in a few of the Nigerian states. NSIC's training focuses on teaching school age children about civic culture and promoting principles of citizenship. A central element of NSIC's curriculum is to develop and internalize the resistance techniques necessary for citizens to make and carry out law-abiding decisions.

H.  Philippines

Government Efforts: President Arroyo has continued to press for a revitalized campaign against corruption. Spurred by general public disgust about corruption, the President has instigated or supported a series of measures, including lifestyle checks, charges against officials in key agencies and commissions, and more aggressive and successful prosecution of corrupt officials by the Office of the Ombudsman, as well as within the military. She issued Executive Order 259 in December 2003 creating the Revenue Integrity Protection System, the anticorruption arm of the Department of Finance (DOF), which investigates allegations of corruption against employees and officials of the DOF and its agencies and bureaus, including internal revenue and customs. In addition, her administration is moving to implement the Government Procurement Act and other reform measures passed in 2003. In July 2002, the government introduced an e-procurement program covering all state departments and in December 2002 an evaluation system for corporate governance was instituted in government-owned and controlled corporations. In March 2003, legislation was amended to reduce the size of financial transactions that trigger reporting requirements. Government and civil society groups have launched public education campaigns to combat vote buying in elections. The Government of the Republic of the Philippines (GRP) is a party to the UNTOC and has signed but not yet ratified the UNCAC.

Law Enforcement and Legal Systems: A new law enforcement and criminal justice development program was initiated in 2003 to modernize and improve law enforcement and judicial institutions in the Autonomous Region of Muslim Mindanao and elsewhere in the Philippines. In 2005, police training will continue, aimed at building capacity for combating narcotics trafficking and other forms of transnational organized crime, as well as inculcating professional management practices throughout the Philippines National Police. The plans for 2005 call for technical assistance to establish internal oversight and anticorruption mechanisms in the PNP as well. The USG also assisted in the development of regulations to reduce bank secrecy and limit opportunities for money laundering. Working with the GRP Supreme Court, the USG helped to guide lower courts on judicial review of economic policies, the doctrine of primary administrative jurisdiction, and the use of expert testimony in technical cases. This program aims to strengthen the implementation of the local justice system and to improve access to justice services. The USG worked with the GRP's Securities and Exchange Commission and the Philippine Stock Exchange to improve the regulation of capital markets, protect investors, and increase investor confidence and willingness to invest in Philippine capital markets, as well as supported efforts to strengthen corporate governance within the banking sector.
Transparent Governance: The USG has several efforts underway to make contracting more transparent, open the regulatory system, and increase the number of firms supplying services to the government. The major tool in achieving these results is its Accelerating Growth, Investment, and Liberalization with Equity (AGILE) program, which includes technical assistance and training for the GRP Bureau of Customs for the implementation of the World Trade Organization Valuation Agreement and the post-entry audit mechanism, which is expected to contribute to a post-entry audit capacity that reduces revenue leakage, is transparent, and is resistant to discretion and corruption. Through AGILE, the USG supports technical assistance and advocacy for reforming GRP policies and regulations that create monopolistic privileges in several economic sectors, including transport, power, and telecommunications.

A major component of the USG's strategy is to modernize and strengthen GRP public sector administration, including assistance to develop clearer and simpler rules aimed at making public administration more transparent. As noted above, these efforts include technical assistance for a government-wide effort to comprehensively reform the rules and procedures governing GRP procurement, making the process more efficient and transparent. The Economic Growth and Technical Assistance program is currently providing assistance in preparing detailed manuals to govern various types of procurement as well as training. Moreover, the USG has provided extensive technical assistance to the Bureau of Internal Revenue to develop procedures to streamline the taxation process, increase GRP revenues, and reduce opportunities for corruption. These efforts seek to address the expanding budget deficit problem, a key USG concern.

Civil Society: The USG also provides assistance to mobilize the public through local government, civil society, and public information programs. These groups provide assistance to local government financial management units so that they are more accountable and responsive to citizens. They have worked to facilitate adequate civil society consultation, advocacy, and oversight of legislative and policy reforms to improve the prospects for adoption and effective implementation of anticorruption reforms. They have contributed to capacity-building efforts of local government and communities to better manage coastal resources, forests, and solid waste, with a special emphasis on Western and Southern Mindanao.

I. Russia

Government Efforts: The Government of Russia (GOR) adopted a new criminal procedure code, which came into effect in July 2002, to move to a jury system. In August 2002, President Putin signed an advisory decree to increase ethics and integrity in the state bureaucracy. In December 2002, the Russian Federation passed a new law on the election of deputies, including new provisions governing campaign financing. A new federal law to improve the GOR's ability to combat money laundering resulted in Russia being removed from the Financial Action Task Force blacklist in January 2003. An access to information decree came into effect in May 2003, obliging the GOR to post information about their activities on the web. The GOR has signed but not yet ratified the CRCC, UNCAC, and UNTOC.

Law Enforcement and Legal Systems: USG assistance programs to the judiciary stress the subject of judicial ethics, working closely with the judicial branch body that enforces judicial ethics standards. With this assistance, the Russian judicial system has made strides in openness and accountability, for the first time ever publishing the outcomes of disciplinary proceedings against judges. The judiciary has also drafted a new, more extensive, code of ethics for judges. An RLA at the Embassy in Moscow provides assistance in enhancing the skills of prosecutors in handling complex criminal cases. Russian law enforcement also receives training in anticorruption methods and principles through the core law enforcement course at the International Law Enforcement Academy in Budapest.

Transparent Governance: Working closely with reform-minded national officials, the National Project Institute, a Russian NGO receiving USG support, has taken the lead in drafting important deregulation legislation that significantly reduces the burden of registration, licensing, and inspections on businesses. The Center for Economic and Financial Research, a Russian think tank supported by the USG, has carried out independent work to survey and monitor the implementation of the first deregulation package, identifying both successes and failures, and effectively publicizing the results. This work complements and reinforces the important legislative drafting work done by the National Project Institute by ensuring that the laws that reduce regulation and administrative barriers, and thereby lessen corruption opportunities, are fully and effectively implemented.

The Institute for Urban Economics, a USG-funded Russian think tank, has worked successfully on the promotion of budget transparency, reduction of administrative barriers for businesses, and introduction of competitive procurement practices at the local level. New policies and practices strengthening transparency and accountability of local governments, such as individual social and communal subsidy accounts, models of public participation in budget-decision making, single window approach in social service delivery, transparent real estate development regulations, competitive procurement of housing and social services, and municipal purchases via Internet have been introduced in more than 20 municipalities in over 20 regions of the Russian Federation. The Center for Fiscal Policy, a Russian NGO receiving USG support, was a catalyst in the successful adoption of significant inter-budgetary fiscal reforms, which have significantly increased transparency and accountability in budgeting at the national, regional, and local government levels. This project builds upon work done previously by Georgia State University.

The Small and Medium Enterprise Policy Advocacy program works in eight regions to strengthen the capacity of regional business associations to advocate successfully for improvement in the administrative and policy environment affecting small- and medium-sized enterprises. The American Chamber of Commerce with USG support is working at promoting the use of digital and Internet technology by the Russian government, as well as enhancing the availability of information and transparency Russia-wide. The USG also works with environmental NGOs to advocate improved and more transparent environmental practices.

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 the Netherlands and Switzerland, the USG is helping to prepare, publish, and distribute a Corporate Governance Manual for Enterprises in Russia. The manual will serve as a resource guide for Russian and foreign directors, managers, and investors, functioning as a training tool on corporate governance and shareholders rights for organizations involved with training Russian directors and managers as well as educational institutions. The USG also is working with the Russian Chamber of Commerce and Industry to implement its business ethics program in Russia and to develop tools and materials, including a Business Ethics Manual, to educate and disseminate business ethics principles in an effort to support its business ethics trainees in Moscow, Saint Petersburg, Samara and Novgorod. The USG has also worked with the Russian Supreme Arbitration Court to promote transparent dispute resolution, creating a handbook on commercial dispute resolution and planning a manual for Russian judges on enforcement of arbitration awards.

Civil Society: Through Management Systems International's Public-Private Partnerships program, which builds coalitions among business, NGOs, and local government to fight corruption, anticorruption activities continue in the Tomsk and Samara oblasts and new coalitions were initiated in Irkutsk and Vladivostok. Public awareness campaigns and investigative reporting by local journalists have kept the issue of corruption high on the public agenda. Several anticorruption laws are being drafted and adopted in local parliaments and administrations in the Tomsk and Samara regions, with the assistance of the Partnerships program. Members of Partnerships from NGOs, the business community, and local government take responsibility for drafting, depending on the context of the particular law.

J. Ukraine

Government Efforts: Ukraine moved from discretionary licensing of economic activity toward automatic permitting based upon the fulfillment of clearly defined criteria, reducing avenues for petty administrative corruption by licensing officials. Advances made in tax administration, the budget process, and regulatory reform help lay the groundwork for reductions in levels of corruption. Similarly, the passage of a new and much clearer election law is designed to facilitate reductions in certain types of election-related corruption. The Government of Ukraine (GOU), through the Ministry of Justice, had indicated a willingness to work jointly with the USG to implement an anticorruption strategy. The GOU has signed but not yet ratified the CLCC, CRCC, UNCAC, and UNTOC.

Law Enforcement and Legal Systems: The USG funds an ABA-CEELI criminal law reform program, which provides seminars on anticorruption prosecutorial techniques in cooperation with the Organization for Security and Cooperation in Europe; provides support to a GOU working group charged with drafting new anticorruption, conflict of interest and GOU procurement laws; assists the GOU in its creation of a witness protection program; and is developing a dialogue between GOU law enforcement agencies and NGOs working on trafficking and corruption issues such as the International Organization for Migration, the National University for Internal Affairs, Winrock International, and La Strada Ukraine.

Transparent Governance: Since November 2001, a USG-funded anticorruption program called Partnership for a Transparent Society has been providing support to the network of ten regional NGO coalitions that combat corruption and promote transparency at the national, regional and local levels. The anticorruption NGO coalitions currently operate eleven telephone hotlines and 21 citizen advocacy offices in 18 cities of nine oblasts of Ukraine. The coalitions provide legal help to the victims of corrupt actions by public officials, carry out education campaigns against corruption, facilitate citizen participation in decision-making, and lobby for greater transparency in local and regional governments. The bulk of the program's success to date has been achieved locally, where governments display political will to accept greater transparency.

Civil Society: As part of its national-level activities, the Partnership for a Transparent Society program has organized two national conferences, the first on preventing corruption in higher education in November 2002, and the second on how to prevent corruption in small and medium business regulation, held in late October 2003. The senior governmental officials and representatives of about 60 business associations representing 35 cities and all regions of Ukraine attended the latter conference. Its recommendations were finalized and forwarded to the legislature and relevant governmental bodies and widely disseminated among the stakeholders. Analytical materials produced by the two conferences have been published and disseminated nation-wide. USG support for the Partnership for a Transparent Society is scheduled to end in 2004, but continuation of the project is under consideration.

IV. CONCLUSION

Corruption remains a daunting worldwide problem, affecting vital American interests. The battle to reduce corruption never ends -- but countries have made great strides in creating transparent, accountable systems for preventing, detecting, and prosecuting corruption. Longstanding USG diplomatic efforts and innovative new approaches to counter corruption worldwide have succeeded in bringing global attention to this serious problem and engaging the world community in 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 the new, holistic approach to combating corruption.

Since the last report, the USG has helped to advance significant multilateral anticorruption commitments, including most notably, finalization of the UNCAC. 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 ADB-OECD Asia Initiative, and presently, the UNDP-OECD MENA Initiative. 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, and the USG continues its high-level participation in this effort. 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. Recent examples include the development of the Culture of Lawfulness educational program in several countries targeted at middle-school students, and support to develop a corporate governance blueprint for Russian businesses.

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 and programmatic 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 corruption within their borders, and enhance cooperation and technical assistance to promote local actions in the fight against corruption.

USG agencies -- including the Agency for International Development, the Department of State, the Department of Justice, the Department of Commerce, the Department of the Treasury, and the Office of Government Ethics -- will 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 USG and other dedicated parties, the international fight against corruption will continue to move forward.

APPENDIX - GLOSSARY OF ACRONYMS

ABA-CEELI American Bar Association - Central and Eastern European Law Initiative
ADB Asian Development Bank
AGILE Accelerating Growth, Investment, and Liberalization with Equity program
APEC Asia-Pacific Economic Council
AUCPCC African Union Convention on Preventing and Combating Corruption
BMPIU Budget Monitoring and Price Intelligence Unit of the Nigerian Government
BPE Bureau of Public Enterprises of the Nigerian Government
CGD Center for Governance and Development in Kenya
CLCC Council of Europe Civil Law Convention on Corruption
CoE Council of Europe
CPI Commission on Public Integrity in Iraq
CRCC Council of Europe Criminal Law Convention on Corruption
DOF Department of Finance of the Philippines
DPP Department of Public Prosecutions of Kenya
EFCC Economic and Financial Crime Commission of Nigeria
GOE Government of Ecuador
GOG Government of Georgia
GOI Government of Indonesia
GOK Government of Kenya
GON Government of Nigeria
GOR Government of Russia
GOU Government of Ukraine
GRP Government of the Republic of the Philippines
ICPC Independent Corrupt Practices Commission of Nigeria
IACAC Inter-American Convention Against Corruption
IAGGA International Anticorruption and Good Governance Act
KBI Kenya Bribery Index
MCA President George W. Bush's Millennium Challenge Account
MENA Middle East and North Africa Initiative
NCGO National Comptroller General's Office of Guatemala
NGO Non-Governmental Organizations
NMLB National Money Laundering Bureau of Georgia
NSIC National Strategy Information Center
OECD Organization for Economic Cooperation and Development
PCE Citizen's Participation Corporation of Ecuador
RLA Resident Legal Advisor from the U.S. Department of Justice
SAE Ecuadorian Anticorruption System
TI Transparency International
UNDP United Nations Development Program
UNTOC United Nations Transnational Organized Crime Convention
UNCAC United Nations Convention Against Corruption
USG United States Government


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