Report to Congress Pursuant to the International Anticorruption and Good Governance Act (Public Law 106-309)
[Released April 2001]
TABLE OF CONTENTS
A. Anticorruption Diplomacy in the Americas
B. Diplomatic Efforts Against Transnational Commercial Bribery
C. Global Forum on Fighting Corruption
D. Global Anticorruption Diplomacy in the United Nations
E. Other Regional Diplomatic Anticorruption Initiatives
F. Diplomacy: Facilitating International Cooperation
A. Corruption: An Issue of International Concern
The problem of corruption is a matter of increasing international concern. The demand for transparency and integrity from public officials is growing. In the past several years, for example, corruption has been a factor in determining elections and changes in government. This populist outcry is, in many instances, forcing governments to address corruption problems.
The primary responsibility for addressing corruption must take place within each country's borders and be spearheaded by the respective government and its people. The political will of individual governments to address their own problems is crucial. Even though local political will and action are key, corruption has increasingly become the subject of international debate and cooperation. Governments are finding that the support and assistance of the international community, including the United States government (USG), is an important component to addressing the scourge of corruption.
The United States is a leader in the worldwide fight against corruption. When Congress enacted the Foreign Corrupt Practices Act in 1977, many governments and international financial institutions (IFI's) were reluctant to discuss, much less attack, the problems of corruption found inside and outside their jurisdictions. Even during the advent of multilateral and bilateral transnational crime initiatives during the 1980's and early 1990's, governments and IFI's often side-stepped bribery and public corruption as topics requiring attention. Nonetheless, the United States continued during the 1980's and early 1990's to pursue the topic, most aggressively by promoting discussion on the problem of bribery in international commercial transactions.
Since then, individual countries, multilateral and regional fora, and the IFI's have given considerable attention to the corruption issue. The USG has promoted and continues to promote global efforts on combating and reducing corruption, many of which are discussed in greater detail in Chapters II and III of this report.
B. Corruption: Affecting American Interests
Corruption still remains an immense challenge despite these considerable diplomatic and programmatic advances. Corruption scandals are being uncovered regularly in every region of the world. In some countries, state-sanctioned corruption has become so pervasive and corrosive that the country itself has become a kleptocracy, wherein the top leaders use the resources of the state to enrich themselves and their associates.
The United States is routinely affected by corruption outside its borders. Corrupt interests continually hamper global economic activity of American firms, which can lose contracts to competitors offering bribes. 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. Criminal groups promote corruption of government officials to gain protection for themselves and their activities, access insider information, and influence legislation or statutory regulations that could affect their interests. This, in turn, breeds poor governance and undermines the political legitimacy of governments.
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.
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 most in need of them. Corruption benefits those who control resources and increases the misery of those who are poorest.
C. The International Anticorruption and Good Governance Act
It was within this context of growing international concern and action against corruption that Congress passed the International Anticorruption and Good Governance Act of 2000 (IAGGA) on October 5, 2000, 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, Section202(b))
The IAGGA defines anticorruption programs broadly, involving action to:
To encourage greater USG help to foreign countries in this regard, the IAGGA amends the Foreign Assistance Act to add as one of five major goals of United States foreign development policy "the promotion of good governance through combating corruption and improving transparency and accountability." (IAGGA, Section 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, Section 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, to prepare a report to Congress that surveys USG diplomatic and programmatic anticorruption efforts, as well as host government efforts, in priority countries. The report, due annually, is to focus on activities of the previous year, while touching upon potential future activities in this area. This document constitutes the initial report due 180 days following enactment of the IAGGA.
II. USG ANTICORRUPTION DIPLOMACY
The international community has recently begun to accept corruption as an issue of global concern with internationally accepted remedies for preventing and attacking it. Through diplomacy, the USG and other governments are establishing the basis for much-needed intergovernmental assistance and cooperation in areas once considered solely of local concern.
Actions that promote good governance are key to an effective anticorruption program. This can often include taking local actions, such as reforming a country's civil service, creating and operating intra-governmental auditing functions, or making decisions as to how scarce law enforcement resources might be used to target corrupt officials. By acknowledging basic international norms regarding corruption and how to counter it, the international community is opening the doors for more and closer multilateral and bilateral cooperation on important but traditionally local fronts such as law enforcement, government transparency, election systems and more. 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 assistance programs in these areas.
For the reasons above, the general goals of recent USG anticorruption diplomacy have been to establish internationally accepted norms relating to corruption, encourage mutual or self-evaluation of governments with regard to corruption within their borders, and to enhance recognition of corruption as a domestic problem causing serious international implications. Many other members of the international community, including intergovernmental organizations, are beginning to share USG goals and bolster our work through their own impressive efforts.
The United States has been at the forefront of efforts to develop and promote effective measures against corruption. This chapter describes recent USG diplomatic efforts and provides historical background for the key international initiatives supported by the United States and others.
A. Anticorruption Diplomacy in the Americas
The first international convention against corruption, the Inter-American Convention Against Corruption (ICAC), was concluded in 1996. The impetus for this breakthrough occurred in December 1994, when the first Summit of the Americas, held in Miami, launched an ambitious series of initiatives by the governments of the Western Hemisphere to improve cooperation on a broad agenda of issues relating to democratic institutions of government, free trade, sustainable economic development and growth. Many of these initiatives began a process of international consultation and cooperation on issues that had previously not been systemically considered in formal intergovernmental dialogue, or had been regarded as principally the concern of individual countries.
In the Declaration of Principles from the 1994 Summit, the heads of the American states declared that:
"Effective democracy requires a comprehensive attack on corruption as a factor of social disintegration and distortion of the economic system that undermines the legitimacy of political institutions."
Following negotiations by experts from the governments of the Hemisphere, on March 29, 1996, a Specialized Inter-American Conference met in Caracas, Venezuela, and negotiators from twenty-one OAS member states signed the ICAC. The United States signed the ICAC on June 2, 1996, and, in March 1997, the ICAC entered into force following the deposit of the second instrument of ratification. On April 1, 1998, the President submitted the ICAC to the Senate for advice and consent, which was given by the Senate in June 2000. As of April 2001, twenty-six of thirty-four OAS member states had signed the ICAC, and twenty-two had deposited their instruments of ratification.
One of the primary obligations of the ICAC is that parties must make it a criminal offense for any public official to solicit or receive, and for any party to offer, promise or give, directly or indirectly, a bribe or other benefit, in exchange for any act or omission in the performance of official duties. This obligation relates to government officials of the Parties, or to persons who perform public functions, which are further defined in the ICAC. Parties must also establish as criminal offenses a number of other acts of bribery or related abuses involving public officials. Article VIII of the ICAC requires that parties adopt laws similar to the United States Foreign Corrupt Practices Act (FCPA), making it a crime to bribe officials of foreign governments in connection with an economic or commercial transaction in exchange for an act or omission in performance of the official's public duties. The ICAC provides procedures for cooperation by parties in such matters as extradition in implementation of their obligations. It prohibits the use of bank secrecy as the basis for denial of international cooperation among Parties involving corruption offenses.
The ICAC prescribes a series of groundbreaking non-criminal preventive measures that the Parties agree to consider establishing. Some of these include: systems of government procurement that assure openness and equity of such systems; standards of conduct; government revenue collection and control systems; laws that deny favorable tax treatment for any individual or corporation for payments that violate laws against corruption; whistleblower protections; oversight bodies; accounting systems and internal accounting controls; addressing the relationship between equitable compensation and probity in public service; and mechanisms to encourage participation by civil society and NGO's in efforts to prevent corruption.
Specific attention to preventive measures is an important contribution of the ICAC to the development of global initiatives against corruption. Although the ICAC preventive measures are not legally binding obligations, OAS actions since 1996 to promote implementation of the ICAC have given them significant attention.
The ICAC, when originally negotiated in 1995-96, did not include a provision for any formal mechanism for monitoring implementation on a continuing basis. Growing experience in other international fora resulted by 1999 in a developing consensus that effective implementation of international commitments against corruption can and should be promoted by mechanisms of mutual evaluation by the participating governments. Thus, the OAS General Assembly in 1999 directed that the Permanent Council's Working Group on Probity and Public Ethics examine ways to enhance implementation of the ICAC. After various meetings and reports, including a meeting of States' experts funded by the USG in Washington in March, the OAS is expected to adopt a recommendation for a mutual evaluation process at a conference of the Parties in Buenos Aires on May 2-4, 2001. The USG has been one of the leaders in this process in the OAS, and will participate actively in and strongly support the ICAC monitoring process. The USG continues to fund OAS programs which assist Latin American states in their implementation of the ICAC through the use of expert evaluations, highly publicized country workshops, and the development of draft legislation.
B. Diplomatic Efforts Against Transnational Commercial Bribery
In 1977, Congress enacted the FCPA, making it a criminal offense for a United States citizen or firm to give, promise or offer bribes to officials of foreign governments in order to obtain or retain business. The FCPA had a major impact on how American companies conduct business in foreign countries, but, in the absence of similar legal prohibitions by other major exporting nations, U.S. businesses could be placed at a competitive disadvantage relative to foreign competitors that continued to pay bribes. As a result, the United States undertook a long-term effort to convince other leading industrialized countries to adopt laws similar to the FCPA.
In 1997, the members of the Organization for Economic Cooperation and Development (OECD) completed the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ("OECD Anti-Bribery Convention"). The OECD Anti-Bribery Convention was a major milestone in United States efforts over more than two decades in that all of the other most significant exporting countries joined with the USG in agreeing to criminalize the bribery of foreign public officials in international business transactions.
The OECD Anti-Bribery Convention has now been signed by all 30 OECD members plus Argentina, Brazil, Chile, and Bulgaria. It entered into force on February 15, 1999. As of March 2001, thirty-one countries had deposited their instruments of ratification of the Convention with the OECD Secretariat.
The OECD Anti-Bribery Convention is specific in its purpose and coverage: it requires parties to make it a crime for any person to bribe officials of foreign governments for the purpose of obtaining or retaining business. Thus, it only covers the conduct of the person or enterprise offering or making the bribe and does not purport to regulate the conduct of a recipient of a bribe. The OECD Anti-Bribery Convention also provides for parties to afford each other mutual legal assistance and extradition in the implementation of its obligations. It provides for cooperation by Parties in a program of "systematic follow-up to monitor and promote the full implementation of the Convention." (Article 12) This monitoring program is being carried out in the OECD Working Group on Bribery in International Business Transactions, with active participation and support of the USG. A complete presentation of the OECD Anti-Bribery Convention, together with analyses of country implementation and descriptions of efforts to expand membership and strengthen its coverage, is available in reports published by the Departments of State and Commerce.
C. Global Forum on Fighting Corruption
In May 1998, the USG approved its first International Crime Control Strategy, which examined USG responses to the growing range of transnational criminal activities that threaten United States citizens, activities or interests. That document identified corruption among justice and security officials as a problem of central significance to the rule of law. It recognized that official corruption can never be "solved", but that it can be controlled if governments have the political will to implement effective anticorruption practices.
The International Crime Control Strategy recommended that the USG call for an international conference on upholding integrity among key justice and security officials, defined as including all those officials with a key role in maintaining the rule of law. This conference, eventually named the First Global Forum on Fighting Corruption and Safeguarding Integrity of Justice and Security Officials (First Global Forum), was to determine which approaches work to uphold integrity, which do not, and what new approaches might be developed.
The First Global Forum, held in Washington in February 1999, began a new channel for high-level intergovernmental dialogue and information-sharing on corruption, providing a boost to the many individual countries' domestic political efforts to combat corruption. Senior officials from ninety countries attended, including five vice presidents and over fifty officials of ministerial or higher rank. The USG prepared for the conference a compendium of Guiding Principles for Fighting Corruption and Safeguarding Integrity Among Justice and Security Officials, which includes some 60 specific practices that governments have found effective to promote public integrity or fight official corruption. This working paper and the extensive Final Report from the conference consolidated the substantial international consensus that existed on this subject.
Drawing on a growing number of examples of other international commitments relating to corruption and crime, the Global Forum Final Declaration included a call by participants that governments develop ways to assist each other in implementation of international anticorruption commitments through mutual evaluation. The USG sought and obtained endorsement of the results of the Global Forum by the 1999 G8 Summit at Koln. That Communiqu� called for the United Nations draft Transnational Organized Crime Convention to include an obligation that parties criminalize all acts involving corruption by domestic public officials. Such a provision was included in the final Transnational Organized Crime Convention approved by the UN General Assembly and opened for signature at Palermo, Italy in December 2000.
At the final session of the First Global Forum, the Netherlands offered to host a Second Global Forum, now planned for May 28-31, 2001 in The Hague. The USG committed to co-sponsor and support this meeting. The USG has assisted the Netherlands by participating in the Dutch-formed Organizing Committee and advising and assisting the Dutch with preparations for the Second Global Forum. The USG has also participated in, and in some cases provided limited financial assistance to, preparatory meetings hosted by other members of the Organizing Committee, including Romania (East Europe and Eurasia), South Korea (Asia/Pacific), the Global Coalition for Africa, and the OAS. The Dutch propose that the Second Global Forum produce a Declaration with "building blocks" for the future UN corruption convention. The government of South Korea has offered to host a Third Global Forum in 2003.
D. Global Anticorruption Diplomacy in the United Nations
In April 1999, with USG urging, the United Nations (UN) Crime Commission recommended that the UN Convention Against Transnational Organized Crime ("TOC Convention"), then in negotiation, include a provision to criminalize acts of corruption involving public officials. It also recommended a resolution, approved by the General Assembly in the fall, requesting the Ad Hoc Committee negotiating the TOC Convention to consider the desirability of a further UN instrument on corruption.
The Ad Hoc Committee discussed further action against corruption and concluded that an effective international legal instrument against corruption "is desirable" after the TOC Convention and its three protocols were completed. A majority of those countries represented on the Ad Hoc Committee said this instrument should be a freestanding agreement, rather than a protocol to the TOC Convention.
The UN General Assembly approved a resolution in December 2000, recommended by the Crime Commission in April 2000, that establishes a procedure for negotiating a comprehensive global UN instrument against corruption. The Crime Commission Secretariat is now analyzing existing international instruments, recommendations and discussions relating to corruption and preparing a study for the Crime Commission's regular session on May 8-17, 2001. At it that session, the Crime Commission is expected to provide guidance and recommendations to an open-ended expert group that will prepare draft terms of reference for negotiations on a UN corruption instrument. That group will meet in Vienna July 30-August 3, 2001, and its terms of reference will eventually be transmitted to the General Assembly for approval. An ad hoc committee to begin the negotiations, open to all UN members, will meet in Vienna in early 2002.
A separate resolution approved by the General Assembly in December 2000 requested the UN working group developing terms of reference also to address the problem of use of the international financial system to launder or conceal the proceeds of corruption or abuse of office by heads or senior officials of governments, and the repatriation of such funds to their countries of origin. This problem has arisen repeatedly in recent years, including the cases of Marcos, Mobutu, Suharto, Abacha and others. In most of these instances, the governments of those countries requested assistance from the United States or other countries with major financial centers to trace, seize and return assets that are known or alleged to be proceeds of corruption. Under the United States National Money Laundering Strategy 2000, a USG interagency group prepared a study of how the United States responds to such requests. At the initiative of the United States, the Communiqu� of the G7 Finance Ministers meeting in July 2000 included the following:
Stolen Assets: International money laundering has often been used by government officials to assist the clandestine diversion of public assets. The vulnerability of government institutions to such crime can be especially substantial in countries with emerging democratic systems and developing or transitional economies. We agree that it would be useful if we could take stock of existing legal tools and the agencies that administer them in each of our countries that would be available to identify, trace, and seize such laundered assets, as a first step to enhancing international cooperation on this issue.
In January 2001, the United States Departments of the Treasury and State, and the Federal financial regulatory agencies, issued regulatory guidance urging that United States banks and other regulated financial institutions exercise particular care in opening or managing accounts of heads or senior officials of foreign governments, their families, or their close associates. In January 2001, Switzerland hosted an informal meeting with officials from the G7 countries to further discuss this problem. The General Assembly resolution establishes this subject as a matter for consideration in developing terms of reference for the UN negotiation.
Corruption was an important issue discussed by governments and experts at the tenth United Nations Crime Congress in Vienna in April 2000, and figured in the declaration of the Congress. The USG also participates in and supports programmatic activities of the UN Center on International Crime Prevention, including implementation of its Global Program Against Corruption. The UN Center's activities include projects to enhance the institutional capabilities of a number of governments in all regions to develop and implement effective national programs against corruption.
E. Other Regional Diplomatic Anticorruption Initiatives
The USG continues to participate in or encourage bilateral, regional and multilateral initiatives to promote public integrity and control official corruption in practically all regions and in many specific countries. In October 2000, the United States signed the Council of Europe's Criminal Law Convention on Corruption. Like the ICAC, the Criminal Law Convention requires that parties make it a criminal offense for any public official to solicit or accept, and for any party to promise, offer or give, a bribe or other advantage in exchange for any act or omission in the performance of the public official's duties. The Criminal Law Convention, like the ICAC and the OECD Anti-Bribery Convention, also requires parties to make it a crime to bribe officials of other governments, but unlike the others, does not specify that the bribe must be to obtain business or commercial advantage. The Criminal Law Convention is broader than either of the other two in that it not only addresses public corruption, but certain acts of corruption involving only private parties. Like the others, the Criminal Law Convention includes provisions for international cooperation in implementing its obligations, including extradition and mutual legal assistance.
In May 1997, the Council of Europe (COE) approved Twenty Recommendations Against Corruption, and in 1999, the COE completed a Civil Law Convention on Corruption, which addresses many issues arising from the impact of acts of corruption on individual citizens. As of April 2001, twenty-seven nations have signed the Civil Law Convention. The COE is also developing a code of conduct for public officials. In order to provide a system for mutual evaluation of implementation of all of these anticorruption commitments, the COE in 1999 created the Group of Countries Against Corruption (GRECO). The USG joined the GRECO in September 2000, and participated in its first meeting as a member in December. USG experts are now joining the GRECO monitoring process, which during its first two years is addressing the independence, legal authorities, personnel, and resources of national institutions responsible for investigating or prosecuting corruption offenses. The United States will receive its first visit from a GRECO expert team during the last quarter of 2001.
The USG participates in other anticorruption initiatives in the European region, including programs by the Organization for Security and Cooperation in Europe (OSCE) and the Stability Pact for Southeast Europe. In November 1999, at USG initiative, the OSCE Istanbul Summit Charter on European Security identified corruption as a significant challenge to stability of the region. The Summit requested the OSCE Permanent Council to review activities against corruption in other global and regional fora, and determine what steps the OSCE should take in response to this problem. In November 2000, the Permanent Council approved a report by the Chairman-in-Office which identified activities by OSCE and its Missions in member states to promote measures against corruption. Governance and corruption are the subjects of the OSCE Economic Forum to be held in Prague in May 2001, after three preparatory seminars in Almaty, Brussels and Bucharest. The USG has announced it will provide financial support to OSCE anticorruption projects proposed by OSCE Missions.
At its working table meeting in Sarajevo, Bosnia-Herzegovina on February 14-15, 2000, states participating in the Stability Pact for Southeast Europe agreed to the Stability Pact Anticorruption Initiative (SPAI), including an anticorruption Compact and an Action Plan for its implementation. The Action Plan calls for states to become parties to the COE conventions against corruption, and to participate actively in anticorruption work in the United Nations, the Global Forum and other global and regional fora. The participants agreed to a number of specific anticorruption measures, particularly addressing the engagement of civil society in national anticorruption efforts, and agreed to participate in a continuing process of review and evaluation of their implementation of anticorruption commitments. This process is going forward in the countries in the region, under the direction of management bodies. The United States is an active member of the SPAI management body, and is joined in its efforts by the European Union, OECD, Council of Europe, the World Bank, and the Stability Pact Secretariat.
Under the auspices of the Global Coalition for Africa, with USG encouragement and support, a number of African countries have committed themselves to a declaration of 25 anticorruption principles. This was initially agreed to by eleven African countries in February 1999 on the margin of the First Global Forum in Washington. This group has since invited several additional countries to join, and is making efforts to use the declaration of principles as the basis to elaborate a more formal regional anticorruption regime for Africa. Principle 24 of this declaration commits its participants to: "Establish government-to-government mechanisms to monitor implementation of these principles, including a mutual reporting and evaluation process."
The Asia-Pacific Economic Cooperation (APEC) forum, in which the United States plays an active role, has begun to address anticorruption issues in the context of its work on investment promotion, economic governance, the international financial system, and public sector management. Discussion of the need for preventing and controlling corruption figured prominently in recent consultative meetings including the "Seoul Conference on Combating Corruption in the Asia-Pacific" region in December 2000. The USG is engaging the South Korean and other interested governments on the possibility of creating an APEC-sponsored anticorruption vehicle for the region.
In 1997, the World Bank announced a set of anticorruption initiatives. These included measures to protect Bank-financed activities and internal Bank operations from corruption, and to introduce anticorruption in Bank country development strategy planning and policy dialogue with recipient countries. The World Bank Institute has developed systems and procedures to conduct diagnostic surveys of perceptions of the extent and significance of corruption, particularly in developing or transitional economies. The USG has funded several of these surveys, which offer an empirical basis for public discussion of corruption in such countries and contribute to governments' prioritization of actions within a comprehensive national effort against corruption. The World Bank has also made public on its website a so-called "black list" of firms and entities suspended from doing business with the institution as a result of violations of bank fraud and corruption provisions. The regional development banks and the International Monetary Fund have similarly begun to address anticorruption measures in their activities and as policy imperatives in transition economies. In the World Trade Organization, many members, including the USG, are seeking to develop an agreement on transparency in government procurement, whose implementation would diminish opportunities for acts of corruption by officials responsible for procurement.
F. Diplomacy: Facilitating International Cooperation
The unifying concept in all of these global and regional processes is that each government must take action to prevent or disclose and punish corruption. While transnational commercial bribery must be addressed by laws and authorities of both exporting and importing countries, most other forms of corruption occur within a given country. The international community can advance the prospects that governments will act effectively against corruption by raising the visibility and political profile of such action. The international community can help inform national political processes by clearly and objectively defining actions governments should expect of themselves, what they may properly expect of each other, and what ultimately their people should, through democratic processes, require of them.
International mutual evaluation is being increasingly accepted as a highly effective means to maintain the political incentive for governments to take actions against corruption. A regime of generally recognized international norms, coupled with a mutual evaluation process, establishes a policy and political context within which multilateral and bilateral assistance programs can enhance the institutional capabilities of governments to develop and implement their national anticorruption programs. Some programmatic assistance activities implemented by the United States are described in the next chapter.
III. SELECT USG ANTICORRUPTION PROGRAMS
The USG and many other players who provide anticorruption assistance worldwide -- including IFI's, NGO's, intergovernmental organizations, and others -- have derived lessons from implemented programs and case studies of anticorruption initiatives in places such as Hong Kong, Australia, and Italy. These experiences show that a successful battle against corruption requires sustained and simultaneous attention to a number of fronts, including engaging law enforcement agencies, educating and engaging the public and civil society, increasing governmental transparency and internal oversight, and promoting corporate good governance. The tendency to incorporate prevention measures into regional anticorruption conventions underscores the growing international willingness to adopt a holistic approach to combating corruption.
The IAGGA similarly acknowledges this holistic approach by calling for USG foreign anticorruption assistance in a wide range of areas. Numerous USG agencies -- including, among others, the United States Agency for International Development (USAID), the Department of State, the various federal law enforcement agencies, the Department of Commerce, the Department of Treasury, and the Office of Government Ethics -- provide assistance to foreign governments and counterparts within the anticorruption assistance categories mentioned by the IAGGA. This chapter describes recent USG programs and corresponding host government efforts in ten countries where the USG conducts anticorruption programs and that meet the parameters of priority countries as outlined in Section 205 of the IAGGA.
ALBANIA: USG assistance programs in Albania support the government of Albania's (GOA) close cooperation with the international community to develop and implement an effective plan to counter corruption. A comprehensive plan and matrix of proposed actions emerged from the GOA's involvement in, among other things, the USG-supported Stability Pact Anticorruption Initiative and an ongoing USG-funded World Bank diagnostic.
USAID support for the GOA anticorruption plan involves working with other international donors to engage civil society to monitor progress of reforms, increase public awareness of reforms, and engage Albanian policy makers in a dialogue that supports such reforms. In January 2001, USAID joined a coalition of 60 representatives of NGO's, private businesses, and the media to engage the GOA, provide support for the GOA program, and to educate the general public on corruption issues. The USG portion of this program will provide technical assistance and small grants to strengthen the capacity and engagement of civil society, and is a tandem project to the World Bank's program of technical assistance to government ministries in the area of procurement reform.
The USG provides in-country technical assistance to Albanian law enforcement officials in the area of investigating and prosecuting crimes that involve public and private corruption. The Department of Justice provided a technical advisor to the Ministry of Public Order for more than a year to assist in the development of a professional standards unit to promote integrity within the Albanian National Police, and has provided related training to Albanian personnel serving within this unit. In addition, through other broader law enforcement training, Albanian law enforcement officials are exposed to anticorruption methods. The core law enforcement course at the International Law Enforcement Academy in Budapest, as an example, contains corruption segments dealing with ethics, internal controls, public corruption, cybercrime, and organized crime. Last year, sixteen Albanian officials attended the Academy, and sixteen more are expected to attend this year.
With other international donors, USAID supported the creation of a GOA-supported Magistrates School to train qualified candidates for the bench and procuracy and has supported the judiciary's efforts to draft a new judicial ethics code by sponsoring a Judicial Ethics workshop and sharing the technical expertise of American lawyers and jurists. A USG-funded NGO was instrumental in helping the GOA develop a new competency test for jurists, which ultimately led to the GOA's removal of thirty-one judges for failing the exam or refusing to take the exam.
USAID-funded NGO's are working with the GOA and OSCE to promote free and fair elections in Albania. Recent activities include party-building training for 35 young members of 10 political parties and assisting OSCE and the GOA with the preparation of a new draft election law and a fair voter registry system.
USG advisors to the Albanian Customs office work with a European Union team to implement European Union mandated reforms, some of which involve good governance and increasing transparency. USAID is currently helping the Ministry of Privatization develop a closed-bid tendering system for the sale of four medium-sized public enterprises. The USG has, since 1998, been working with other international donors to increase transparency in the banking sector by supporting the process of liquidating financial institution involved in pyramid schemes.
Last year, a Department of Commerce advisor assisted the GOA in its efforts to accede to the World Trade Organization (WTO). Additional advisors were sent in the areas of legislative drafting, intellectual property rights, and government ethics. These programs include increasing transparency in the trade policymaking process by formally involving the private sector and public. The Albanian parliament eventually passed a law establishing a public/private trade policy coordinating committee, designating the WTO as the coordinating body.
Albania has enacted, with assistance from the international community and the USG, civil and criminal procedure codes, an administrative procedure code, and other legislation that governs court operations and provides a basis for protecting democratic and economic rights and improves the accountability of the court. Recently passed Albanian laws include a freedom of information act and a law governing an ombudsman, whose function is provided for in the Albanian Constitution.
The GOA is a signatory to the Council of Europe Criminal Law Convention on Corruption and has completed the initial program steps for the Stability Pact Anticorruption Initiative. It also participates in the Global Forum process. The GOA receives assistance from the USG-supported Southeast Europe Cooperative Initiative (SECI), which has created a World Bank project to strengthen border cooperation and controls and reduce corruption and related smuggling within the countries of Southeast Europe. The GOA also benefits from the USAID-financed OECD Anticorruption Network for Transition Economies, a forum for international donors and the public and private sectors in Central Europe and the New Independent States to share experiences and information through an on-line website, research projects and workshops.
ARMENIA: The USG is cooperating closely with the government of Armenia (GOAM) Anticorruption Commission, which is developing a framework for a country anticorruption strategy. The government is expected to publicly share their thinking at a USAID-supported workshop in May 2001. The USG Mission is actively engaged with other donors through an OSCE-led donor group on reviewing, planning, and monitoring anticorruption initiatives earlier this year.
The USG provides technical assistance to Armenian law enforcement officials in the area of investigation and prosecuting crimes that involve public and private corruption. United States law enforcement agencies provide training and assistance to Armenia in fighting international crime and corruption and improving human rights practices in criminal justice institutions. For example, Armenian officials and police officers have participated in regional training on law enforcement and ethics issues. Several Armenian police officers have participated in an ethics in policing seminar. An Assistant United States Attorney went to Armenia in January to assess the country's corruption problem and its criminal justice system, and to develop USG assistance recommendations.
USAID is helping the GOAM to develop procedures for tax collection that will make it more difficult to extract side payments from taxpayers. The Department of Commerce is establishing a corporate good governance program for the Caucuses, which is based on a Russian program that helped the Chamber of Commerce develop business ethical guidelines and expert trainers on issues of good business practice.
The GOAM does not participate in any corruption conventions. The GOAM is recently beginning to participate in the Global Forum process.
GEORGIA: Beginning in 1998, with funding from the USG, the World Bank, and other donors, the government of Georgia (GOG) undertook a series of studies of various aspects of corruption. In July 2000, the GOG created a special Anticorruption Commission chaired by the Chairman of the Supreme Court and which included leading NGO's from that country. The GOG requested USG technical assistance for the new group, which the Department of Justice, coordinating with the United States Embassy and USAID, provided. In October 2000, the Commission issued its Report and Recommendations, many of which were incorporated in the President's March 2001 Anticorruption Decree. On March 24, the Georgian National Security Council discussed a draft Presidential Decree that would create an Anticorruption Coordinating Council to implement the provisions of the earlier Decree. It is currently awaiting the President's signature.
A Department of Justice Resident Legal Advisor (RLA) and special Anticorruption Specialist have worked closely with the GOG on various law enforcement issues. For example, the RLA works daily with Georgian officials advising on and conducting small specialized seminars on combating corruption, reforming justice, tax and customs administrations, bank and security regulations, and improving budget and auditing processes. Several Georgian delegates traveled to the United States to attend a USG-funded conference on Organized Crime and Corruption at Georgetown University. Last year, the Department of Treasury and Office of Government Ethics helped the GOG develop a code of conduct for customs and tax officials.
A USAID-funded NGO and the international community assisted the GOG with development of the first comprehensive judicial testing system in Georgia. Judicial applicants passing this qualifications test could be eligible for higher salaries. In addition, with support from USAID, the GOG passed an administrative code that includes a freedom of information section and other tools to prevent corruption. This code is now being implemented.
The USG mission in Georgia, in cooperation with the OSCE, works closely with civil society groups, political parties and media organizations to monitor national and local elections in Georgia. The Georgian Parliament is now considering a number of election reforms.
The GOG is a signatory to the Council of Europe Criminal Law Convention on Corruption and is a member of the COE's Group of Countries Against Corruption (GRECO), established to monitor implementation of the COE convention. The GOG participates in the Global Forum process.
HONDURAS: The United States Embassy oversees four anticorruption projects with the Honduran General Directorate of Criminal Investigation, the Directorate of Migration and Population Policy, the Attorney General, and the Public (Justice) Ministry. Each one is designed to provide training and resources to strengthen anticorruption measures and enforcement mechanisms. The State Department has also funded and supported the establishment of anticorruption and related investigative activities within the Directorate of Administrative Probity, created in 1994 to investigate illicit enrichment of civil servants and the only agency of its kind in Central America. The United States Embassy sponsored workshops that focused on the media's role in fighting corruption and holding public authorities responsible for public policy and actions.
The USG is currently assisting the GOH to reform its criminal justice system. The new Criminal Procedure Code of Honduras becomes fully effective in February 2002, and the USG has provided significant support to this effort, including establishing oral public trials, thereby reducing the incidence of corruption in criminal cases.
In the aftermath of Hurricane Mitch, the USG and international community channeled significant assistance programs to the people and government of Honduras (GOH). To ensure proper monitoring of this large flow of assistance, the USG and other donors created with the GOH the Inspectoria de Proyectos, a mechanism designed to provide management oversight to the operations of the line ministries and independent GOH agencies involved in implementing the reconstruction program. This mechanism coordinates closely with a larger Inter-American Development Bank program to strengthen and add transparency to the Honduran procurement system.
USAID works closely with the Honduran Controller General (HCG) to promote audits of Honduran entities and programs. For example, following Hurricane Mitch, the USAID Inspector General conducted fraud awareness training for over 1,000 people in Honduras, including officials working for the HCG. A USAID contractor is designing training modules for HCG staff, helping HCG undergo a self-assessment of its operation, and even reapportioning and equipping HCG offices to make them more effective and efficient. The HCG has been certified to perform audits for USG-funded programs and participates in a USG/Honduran joint taskforce that conducts audits of various programs, including large-dollar infrastructure building projects.
USAID has also funded public education corruption awareness programs. A USAID contractor designed a public awareness strategy that encourages citizen vigilance in this area, provides education of the types of corruption and its signs, and provides clear information as to what one can do if corruption is identified. A Good Governance Survey is also underway to measure public opinion, perceptions of corruption, and governmental integrity and accountability.
USAID also supports accountability and transparency at the local level through its Municipal Development Program. This program helps strengthen accountability by, among other things, installing formal internal controls on municipal accounting and management systems, and training the community to oversee construction projects.
The GOH has signed and ratified the Inter-American Convention Against Corruption, and anticipates joining the monitoring mechanism currently being developed by the States Parties to the Convention. The GOH has not participated in the Global Forum process.
INDONESIA: The USG has collaborated with other concerned donors to help develop and enforce prudent banking regulations and auditing and accounting standards within Indonesia. USAID has contributed specifically to legislation creating new bankruptcy procedures, secured transactions rules, business competition rules, and arbitration systems.
The USG provides technical assistance through courses and seminars to Indonesian law enforcement officials. Last year, a Department of Justice prosecutor conducted two seminars with the Attorney General's Office on anticorruption measures. A United States Police Advisor is assigned to the Embassy in Jakarta and coordinates training aimed at fostering a civilian-oriented, reform-minded police force. Indonesian law enforcement officials also regularly attend courses at the International Law Enforcement Academy in Bangkok, which include segments dealing with ethics and other related topics.
USAID supports initiatives to decentralize government functions and decrease the layers of bureaucracy - and, thus, the potential for corruption - in various forms of Indonesian government decision making. The USG works closely with the Indonesian Ministry of Finance to address deep-seated corruption within the Tax Department through technical assistance programs that reduce discretion on the part of officials with respect to taxation decisions, and also supports the efforts of the government of Indonesia (GOI) officials charged with reforming the government's Suharto-era procurement practices.
Members of the Indonesian civil society also receive USG assistance. USAID supports NGO's that monitor legislative performance, provides training in investigative journalism for the independent media, and funds activities of NGO's such as Indonesia Corruption Watch that monitor and report cases of corruption and advocate for a number of needed reforms.
As in Honduras, the USAID Office of Inspector General has signed a Memorandum of Understanding with the Indonesian special auditing institution and provides technical assistance and cooperates in audits where the USG has an interest.
The GOI does not participate in any convention against corruption. The GOI participates in the Global Forum process.
KAZAKHSTAN: The USG provides technical assistance to Kazakhstani law enforcement officials in the area of investigating and prosecuting crimes that involve public and private corruption. This included a March 2000 seminar on Investigating and Prosecuting Public Corruption. Kazakhstani law enforcement personnel are also exposed to anticorruption methods and principles through the core law enforcement course at the International Law Enforcement Academy in Budapest. Sixteen Kazakhstani officials attended the Academy course last year and an additional twenty are expected to attend this year.
USAID's program in Kazakhstan emphasizes citizen participation, promotes the expanding role of NGO's in public life, and raises citizen awareness of the need for transparent and accountable government. USAID-funded NGO's are supporting the development of a lawyers' association, a law students' association, and other civil society activities. With USAID assistance, the GOK promulgated a decree requiring full compliance with international accounting standards, and decreased the steps required to obtain business licenses by sixty-eight percent. USAID helped the Kazakhstan Association of Accountants to complete certification as a chartered member of the International Federation of Accountants and is currently training accounting professionals.
The GOK does not participate in any convention against corruption. The GOK participates in the Global Forum process.
NIGERIA: The government of Nigeria (GON) agreed to a USG-funded World Bank diagnostic survey that will be conducted by a consortium of Nigerian universities and will probe deeply into citizen experiences with corruption. In the meantime, USAID funded a smaller anticorruption assessment that examined opportunities to support Nigerian anticorruption initiatives.
USAID is collaborating with the World Bank and other donors to address problems of economic mismanagement and corruption under successive military and civilian regimes. To ensure coordination in this area, USAID and the United Nations Development Program co-chair a donor consultative group on Nigerian governance projects. USAID and the World Bank, in partnership with relevant Nigerian authorities, are working together on the Bank's Economic Management Capacity Project and also on privatization issues.
The USG is working with the National Assembly and six state assemblies to increase transparency and promote ethical conduct. With the help of the Office of Government Ethics, the Ethics Committee of the National Assembly is working to adopt a code of conduct for parliamentarians. USAID has also worked with local NGO's to increase their involvement in the legislative process, including providing comments on the draft ethics code.
In the law enforcement area, a Department of Justice expert is in the process of providing technical assistance to the Ministry of Justice and the independent GON Anticorruption Commission responsible for investigating corruption cases. USAID, the Department of State and the Department of Justice, in cooperation with the British Department for International Development, worked with the GON's Ministry of Police Affairs and the Inspector General of the Police and helped create in late 2000 a strategic plan for national police reform, which includes measures to combat corruption among officers.
To increase transparency and promote integrity in the judicial sector, USAID is training judges in three pilot court districts on caseload management, training budget managers to manage court funds effectively, and working with NGO's and others involved in the criminal justice system to draw attention to corruption within the judiciary.
The USG also works with civil society in Nigeria on the issue of corruption. For example, the USAID women's health networks are working with an international NGO to develop a transparency and accountability manual that will be used to train local communities in the roles they can play in fighting corruption. USAID supports the Zero-Corruption Coalition, a consortium of Nigerian NGO's that has developed several pieces of legislation aimed at promoting good governance. USAID has also partnered with Nigeria's Independent National Electoral Commission to establish an effective elections administration system that will reduce the impact of vote buying and other fraudulent practices.
The USG is funding projects of the Code of Conduct Bureau, which recently launched its program of National Sensitization on Accountability and Transparency. Through public forums, the Code of Conduct Bureau identifies ways in which both public servants and private citizens can be made more aware of corrupt practices, the dangers they pose, and the powers vested in the Bureau to track and investigate allegations of corruption.
The Department of Commerce recently began a project in Nigeria to address counterfeiting of intellectual property. The project began with a Stakeholders Conference in December that brought together newly empowered GON officials and members of the private sector to discuss the state of Nigerian laws and entities related to this field. Through U.S.-based training and in-country technical assistance, the project will seek to implement legislative and regulatory ideas generated from initial information gathering.
The GON is not a member of any convention against corruption, but, as a member of the Global Coalition for Africa, has adopted the Coalition's "Principles to Combat Corruption in African Countries." The GON is recently beginning to participate in the Global Forum process.
RUSSIA: The USG continues to engage the government of Russia (GOR) on a number of anticorruption fronts. USAID is developing a three-year anticorruption strategy for Russia that focuses on supporting the involvement of newly created NGO's in the anticorruption process. USG law enforcement entities provide technical assistance to investigators and prosecutors involved in corruption cases. The Department of Commerce is working to improve business ethics and resolution of business disputes through transparent means.
Over the last several years, the USG has sponsored a variety of law enforcement and legal training and assistance to help combat public corruption, including courses conducted by the Department of Justice on internal controls and investigating and prosecuting public corruption. Additionally, the Resident Legal Advisor has worked with the GOR to develop draft anticorruption legislation recently announced by a subcommittee of the State Duma's Committee on Security. Finally, last year, the Office of Government Ethics worked in Samara developing anticorruption mechanisms for the local government level.
A USAID-funded NGO is providing grants to organizations focused on crime, community policing and corruption issues. An Obninsk municipal government pilot project brings together local leaders, NGO's, and the media in a program using the internet to detail activities and budgets of local governments. Another pilot project in Tomsk replicates a Ukraine effort that creates local demand for accountability in government. USAID-funded NGO's work closely with the new GOR Judicial Department (recently separated from the Ministry of Justice) to develop transparency and promote ethical conduct in the judicial process through the development of court administration procedures, ethics training and, in conjunction with the U.S. Marshals Service, to develop programs on enforcement of judicial decisions and safety of judges and court personnel. After receiving assistance from the USG, the Supreme Qualifying Collegium has upheld the dismissal of nearly 100 judges annually, some for bribe-taking, falsification of documents, and other questionable practices. USAID has also worked recently with the Duma's Chamber of Accounts on a program involving auditing and accounting reform, with the goal of strengthening legislative oversight and accountability.
The Department of Commerce, using legal advisors and workshops, has advised the GOR on WTO accession matters and related efforts to promote transparency in trade. Commerce funded a WTO website that contains information and a calendar of events in the Russian language, including information and releases from the GOR Ministry of Economic Development and Trade. Commerce 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, and has worked with the Russian Chamber of Commerce and Industry to develop ethics guidelines for businesses, conducting a "train the trainers" program to help enterprises adopt and implement codes of conduct. Several Commerce-funded roundtables on corporate governance have led to a partnership with the GOR Federal Commission for the Securities Market to publish a guidebook on corporate governance for Russian executives and shareholders.
The USAID three-year strategy will emphasize public awareness while strengthening transparency and accountability of key GOR institutions and monitoring the progress of reform efforts. USAID also works with environmental NGO's to advocate improved and more transparent environmental practices.
The GOR is a signatory to the Council of Europe Criminal Law Convention on Corruption, but is not a member of the COE's Group of Countries Against Corruption monitoring mechanism (GRECO). The GOR has participated in anticorruption outreach activities of the OECD and has requested to be considered for accession to the OECD Bribery Convention. The GOR participates in the Global Forum process.
UKRAINE: USG anticorruption efforts in Ukraine consist of a mix of programs targeting civil society and working in partnership with the government of Ukraine (GOU). In the law enforcement area, for example, twenty-four Ukraine officials recently received training at the International Law Enforcement Academy in Budapest on Combating Transnational Crime and Prosecuting Public Corruption. Both courses were followed-up by in-country secondary seminars, delivered to 170 Ukrainian officials, focusing on the implementation of anticorruption practices in the courtroom and in the field.
USAID provides support for key NGO's and municipal leaders who address transparency and accountability. USAID has established public-private partnerships for integrity in the Lviv and Donetsk oblasts. The program uses small grants, legal clinics, and business association partnerships with NGO's to encourage the prosecution and enforcement of anticorruption laws and practices. Since 1997, these partnerships have had significant impact on administrative/procedural reforms, legislative reforms, awareness of citizens' rights and responsibilities, and economic growth that has corresponded with increased confidence in local regulatory authorities and investment. Building on the success of these programs, USAID is beginning a three-year program entitled "Fostering Anticorruption Public Actions" that will create and support other partnerships outside the capital.
The USG is also providing small grants to organizations defending whistle-blowers and supporting independent investigative media. Technical assistance is being provided to a new national coalition of NGO's against corruption and to the Ukraine Parliament's efforts to improve citizen access to the legislative process.
The Department of Commerce's resident trade advisor is assisting the GOU in its drive to accede to the WTO by working directly with the Ministry of Economy's governmental Commission on Ukraine's Accession to the WTO. Commerce has translated and commented on various pieces of draft legislation in the trade area, including provisions to increase transparency in the trade process. It has also sponsored U.S.-based consultations and in-country seminars for GOU officials. Commerce is also offering assistance to local businesses and NGO's with development of voluntary codes of business conduct, and conducting a "train-the-trainers" program to help promote good business practices throughout Ukraine.
The GOU is a signatory to the Council of Europe Criminal Law Convention on Corruption, but is not a member of the COE's Group of Countries Against Corruption monitoring mechanism (GRECO). The GOU participates in the Global Forum process.
FEDERAL REPUBLIC OF YUGOSLAVIA: USG programs in the Federal Republic of Yugoslavia (FRY) have been, until recently, limited due to the international sanctions placed on the Milosevic regime. However, a number of USG programs have targeted good governance and anticorruption in both Montenegro and Kosovo.
With the assistance of USAID and the European Union, Montenegro recently developed a modern Budget Law, expected to be in effect soon, that reforms the local budget process in all areas, including budget preparation, records management and accessibility, internal auditing and controls, and accounting methods. The Minister of Finance is expected to release detailed regulations under this law. Department of Treasury advisors assisted the Montenegrin Ministry of Finance with developing a Chart of Accounts that permits detailed financial control of government funds and enables better analysis of the use of such funds. The USG is also advising Montenegro on the development of a National Audit Institution.
Law enforcement development and assistance in Kosovo is being handled by the United Nations mission there. Through this mission, the USG contributes civilian police expertise and other resources to help literally build a new and effective police force. USAID provides assistance to judge and bar associations in Kosovo, helping them develop codes of ethics and related training courses for judges and lawyers.
A USG interagency assessment team recently conducted a rule of law assessment in Serbia, and reviewed anticorruption assistance needs with Serbian government officials, the FRY Ministry of Justice, and Serbian NGO's. USG assistance in this area will undoubtedly increase in the near future.
The newly established government of FRY has recently begun to express an interest in participating in the regional conventions relating to corruption. It is not currently a signatory to any anticorruption convention, but may soon join the Stability Pact Anticorruption Initiative. The government of FRY is beginning to participate in the Global Forum process. The republic government entity in Montenegro currently participates in the Stability Pact Anticorruption Initiative and is involved in ongoing mutual evaluations under that initiative.
Corruption has become a legitimate topic for international discussion and action. Longstanding USG diplomatic efforts to counter corruption worldwide are beginning to be accepted and duplicated as a result. USG and donor assistance programs become more critical and effective as individual governments embrace the idea of international cooperation in the fight against corruption.
Yet corruption remains a daunting worldwide problem that affects vital American interests. It robs the American private sector of international business opportunities, decreases the effectiveness of USG and international donor aid and assistance, and threatens the stability of fragile and emerging democracies.
The USG will continue to pursue a mix of diplomatic and programmatic efforts that help:
The Department of State will work closely with Congress and USG partners in this effort to ensure a strategic and effective correlation between these USG diplomatic and programmatic activities. With the leadership of the USG and other dedicated parties, the international fight against corruption will continue to move forward.