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This is an archived USAID document retained on this web site as a matter of public record.
Remarks by J. Brady Anderson,
The Anti-Corruption Summit and 15th International Financial Management Conference
USAID Administrator
September 21, 2000
Thank you Jim.
Before I begin, let me recognize and thank the conference sponsors:
The International Consortium on Governmental Financial Management -- which Jim Durnil heads up -- and the Americas' Accountability and Anticorruption Project, a project sponsored by the U.S. Agency for International Development.
I would like to recognize the Department of State and the World Bank for their broadcast of the opening session of this conference world-wide.
I'd also like to thank the conference chairmen for helping put this event together: Graham Joscelyne, Auditor General of The World Bank, William Taylor, Auditor General of the Inter-American Development Bank, and Everett Mosley, the Acting Inspector General of USAID.
We are here today to talk about one of the foremost development challenges of the 21st century: corruption.
Governments that are unaccountable to the people they serve are particularly susceptible to putting personal gains before the public good.
The gains in freedom that have occurred in the last decade are impressive. But in too many countries around the world, corruption still thrives.
Let me emphasize that corruption is not limited to developing countries. Every country in the world -- including our own -- has to grapple with how to counter opportunities and incentives for corrupt behavior.
But in developing countries, where resources are already so scarce, corruption has even greater power to rob people of economic opportunity and political rights.
For this reason, among others, the Clinton Administration has made fighting official and private corruption a priority all over the world.
USAID's first program explicitly designed to fight corruption was the 1989 Regional Financial Management Improvement Project, which is now named the Americas' Accountability and Anti-corruption Project (AAA) -- and, as I mentioned earlier, is one of the sponsors of this conference.
Over the past two decades we have learned a few things; foremost among these is that corruption is at root a development issue, borne mostly of inadequate or weak institutions.
Fighting corruption is therefore not only about enforcing laws. We must use a comprehensive strategy, which relies on strengthening government institutions -- particularly those related to rule of law and those charged with the stewardship of public funds.
Just as importantly, we must engage the people of the country, including civil society, the media, and the private sector.
Our fight against corruption begins with assuring the integrity of our own foreign assistance programs.
Auditing and law enforcement are key elements of any anti-corruption approach.
In the late 1970s, Congress expanded the authority of existing Auditors General and -- with the help of Deputy Secretary of Treasury Stuart Eizenstat -- established Offices of Inspectors General to perform audits and investigations of U.S. government agencies' programs and operations, promote agency economy, efficiency, and effectiveness, and help prevent fraud and abuse.
The Office of the Inspector General at USAID operates in over 80 countries on four continents. In addition to safeguarding our foreign assistance programs, the Office of Inspector General has embarked on a number of efforts to strengthen accountability of overseas partners.
Our work with Supreme Audit Institutions recognizes the importance of these institutions in both economic development and anti-corruption efforts.
I am pleased that USAID is working to improve accountability over U.S. government funds with the assistance of the Supreme Audit Institutions.
The Supreme Audit Institution in Tanzania recently audited nearly $9 million in USAID funds provided to the government. The audit report questioned over $160,000 in costs charged to the project.
The Supreme Audit Institutions in South Africa, Zambia, and Ethiopia are currently auditing USAID funds. The Supreme Audit Institutions in Honduras and El Salvador will also conduct audits of our funds in the near future.
All of this work is under the oversight of our Office of Inspector General and expands the oversight of U.S. funds flowing to these countries.
A recent successful investigation by the Office of Inspector General led to the prosecution of two multi-national corporations, which engineered a conspiracy to rig the bidding process on two USAID-funded construction contracts.
The investigation took more than four years and involved seven countries on three continents. As a result two corporations have been assessed criminal fines of almost $35 million.
Our Inspector General recently initiated a new anti-corruption training initiative that is gaining momentum. Auditors and investigators are providing Fraud Awareness training.
This training includes an explanation of the audit role and an overview of investigation functions and an in-depth presentation on fraud indicators. The emphasis is on what to do when such indicators are present.
The training program reaches non-governmental organizations working overseas, our own USAID employees, and contractors and grantees. This training has been conducted in Central America -- reaching over 2,000 participants -- and will soon be provided in other parts of the world.
Let me now turn back to how USAID's anti-corruption focus as reflected in its programs:
One thing we have learned over the years is that corruption is often a crime of opportunity-and the best way to fight it is by eliminating that opportunity.
So we work to reduce the size and scope of government bureaucracy, and to create an open market economy that fosters competition-because competition is the antithesis of corruption and cronyism.
When I was Ambassador to Tanzania, for example, one of the things USAID would do for American firms interested in investing in Tanzania was to walk them through the steps of setting up a business.
They had a flow chart stuck to the wall that showed all 75 steps and licenses and regulations you had to follow to be allowed to operate-each, unfortunately, a separate opportunity for bribery. USAID worked with Tanzanian government and non-governmental organizations, and today, those 75 steps have been reduced to 14.
USAID also supports privatization programs in developing countries, helping make governments more effective and transparent, and moving enterprises out of the government into the open market.
At the same time, USAID has strengthened regulatory bodies in banking, capital markets, energy and other areas, thereby increasing transparency and helping lessen fraud and corruption.
Accounting reform has led to much greater transparency in government, business, and financial sectors.
In countries where a culture of impunity exists, weak institutions are under siege. USAID's greatest contribution in this area has come in our investments in the rule of law.
Rule of law is the cornerstone of democracy: it ensures that all people, regardless of race, gender, religion, class, or position in government-are equal before the law.
USAID has worked to make judicial systems more independent, update outdated laws, and provide world-class training to justice personnel.
But perhaps USAID's greatest contribution to the fight against corruption is our ability to engage, promote, and foster individuals and organizations taking up the fight against corruption in their communities.
These are the groups that ground our efforts in local reality, the organizations that make our efforts sustainable, and the efforts that hold governments accountable.
USAID is particularly proud of our partnership with Transparency International, perhaps the premiere international anti-corruption organization.
USAID has been with TI since the very beginning, and today, with 70 chapters around the world, we look forward to working even more closely together.
We also work with local groups:
For example, in 1997, USAID helped a group of Philippine NGOs document corruption in a book called "Pork and Other Perks."
Through this project, local residents learned that roads they'd never heard of were officially listed as completed: they learned that money that was supposed to make their lives better was instead being siphoned off by corrupt officials.
So ordinary citizens came together and began gathering evidence and protesting to the national government in Manila.
Sometimes they were ignored; sometimes they were ridiculed, harassed and threatened. One young lawyer was assassinated.
And still they fought on, until they saw some of the culprits punished, discovered they had allies in government, and won national and even international recognition.
These are the kind of people and efforts we are so proud to say we support.
Without a broad effort on both of the fronts I've mentioned today -- institutional reforms and mobilizing citizen efforts -- we will face the real danger of pervasive corruption: that it diminishes citizens' confidence in their own government.
Let me say it clearly: corruption is a development issue. In order to confront it we at USAID has seized opportunities on all fronts as they emerge, and commit ourselves to a long-term fight.
President Clinton has said if citizens tire of waiting for democracy and free markets to deliver a better life for them, there is a real risk that democracy and free markets, instead of continuing to thrive, will begin to unravel.
As we enter the new era of globalization, and as more developing societies open up, I believe we all have a responsibility to ensure that everyone is given a fair chance to succeed in the new economy, and a fair chance to exercise their basic human rights.
Reducing corruption must be part and parcel of this goal.
There are few people today who understand that more than our next speaker:
Stuart Eizenstat, our Deputy Secretary of the Treasury, has been the guardian of integrity in government for many years now.
He also helped craft the Foreign Corrupt Practices Act of 1977, a legislative initiative in the fight against corruption.
It is my great pleasure to introduce Stuart Eizenstat, the Deputy Secretary of the Treasury.
Thank you.
This is an archived USAID document retained on this web site as a matter of public record.
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Last Updated on: July 12, 2001 |
