Senator Richard Lugar’s Office
November 15, 2005
U.S. Senate Foreign Relations Committee Chairman Dick Lugar announced that reforms to bring greater transparency and accountability to the five multilateral development banks (MDBs) were signed into law by President Bush yesterday, November 14, 2005, as part of the FY06 Foreign Operations appropriations bill. The reforms, contained in Lugar’s amendment S.A. 1293 that passed the Senate by unanimous consent, apply to the World Bank, the African Development Bank, the Asian Bank, the Inter-American Bank, and the European Bank for Reconstruction and Development.
“This legislation benefits U.S. taxpayers as well as beneficiaries of MDB loans. We all gain when developing countries rise out of poverty, and we are all hurt when MDB funds are lost, or projects fail, because of corruption,” said Lugar. “These measures are an important step toward leveling the playing field so that honest companies and innocent individuals are not disadvantaged by the corrupt. When projects intended to boost economic development are derailed by corruption, the poorest suffer and are cheated of projected benefits in quality health care, clean water and education.” Specifically, Lugar’s reforms include measures to seek financial disclosure by development bank employees similar to that required for U.S. government officials and members of Congress; to improve the quality and oversight of development bank loans; and to support the integrity of the development banks and strengthen whistleblower policies; and to support the independence and efficacy of the audit functions. It also requires that the Treasury Department make publicly available the positions taken by the U.S. Executive Directors on policies and significant projects.
In 2003, Lugar’s staff received information from credible sources within the MDBs alleging corruption on various fronts. To date, he has chaired four hearings to examine ways that the U.S. can contribute to anti-corruption and anti-fraud efforts at the multilateral development banks and sent letters of inquiry regarding individual projects to the bank presidents. Committee staff has interviewed scores of NGO representatives, bank insiders, academics and others, and have visited problem projects in six countries.
The mission of the development banks is to encourage economic development and reduce poverty. Incremental improvements of greater transparency among the banks have already taken place as a result of the Committee’s ongoing work.
To link to the text for the Multilateral Development Bank Law:
Categories: Africa, Odious Debts
Leave a Reply