USIS Washington 

22 February 1999


(Says corruption denies people honest government)  (1170)

Washington -- U.S. Commerce Secretary William Daley has called for
strict monitoring and enforcement of the anti-corruption treaty of the
Organization for Economic Cooperation and Development (OECD) that went
into effect last week.

"Corruption hurts real people," Daley said in a speech to an
OECD-sponsored conference in Washington February 22 on the role of the
private sector in fighting corruption.

"When a contract is awarded based on a bribe, instead of fair
competition, it cheats people out of quality products and services.
More importantly, it cheats them out of a government dedicated to the
people," Daley said.

The OECD anti-corruption treaty went into effect February 15 in the 12
countries that have ratified it. Daley urged the 22 other countries
that have signed the treaty but not ratified it to make good on their
commitment. The treaty calls for criminal penalties to businessmen who
pay bribes to foreign officials.

Later this week, Vice President Al Gore hosts a conference of judges,
police and security officials from about 80 countries to press for
enforcement of anti-corruption measures.

Following is the text of the Daley speech as prepared for delivery.

(Note: "Billion" in text means 1,000 million)

(begin text)

Remarks by Secretary of Commerce William M. Daley
OECD Washington Conference on Corruption
Washington, DC
February 22, 1999
(As Prepared For Delivery)

Corruption is not an easy subject to talk about in public. It makes
people uncomfortable. Everyone knows it exists, but few people until
recently have wanted to talk about it openly, or frankly.

All that is changing. As we have seen with the Salt Lake City
Olympics, the world was shocked and disappointed.

But let me make an observation: the public is waking up to what the
global business community has known about bribery for many years. We
uncovered bribery in over 60 major international contracts valued at
some $30 billion. This was in just 12 months ending in mid-1998.
Corruption, obviously, is big business.

If there is a positive coming out of Salt Lake City, or the cronyism
in Asia, it is that costs have been attached to the corrupt acts. A
political price has been paid -- people are out. And it has shown that
no organization or country is immune from bribery.

Corruption infects both rich and poor nations. And no company is
immune, large or small. We are all in this together.

Later this week Vice President Gore will launch a global effort
against corruption at a forum here in Washington. Some 80 nations are
expected to participate. It will be the first conference of its kind
to focus on fighting corruption.

The fact is, corruption hurts real people. When a contract is awarded
based on a bribe, instead of fair competition, it cheats people out of
quality products and services. More importantly, it cheats them out of
a government dedicated to the people. Instead, you get a government
whose officials are lining their own pockets.

Corruption also discourages investment. It is an unnecessary tax on
doing business that should not be there. And business people tell me:
they do not want to be in a country where the government looks the
other way.

So, Vice President Gore's forum will build on something that many of
us have invested a good amount of time on: the OECD Anti-bribery
Convention. It took effect last week, I am happy to report. It focuses
on those who pay the bribes -- the suppliers. It makes it a crime for
citizens and companies to bribe officials of another country. And it
requires countries that allow tax deductions for foreign bribes to end
that outrageous practice.

The good news is, 12 nations have ratified it. The bad news is, 22
have not, including: France, Belgium, the Netherlands, and Italy. They
had promised to ratify it by the end of 1998. And I hope all 22 take
action soon to make good on their commitment.

The question now is: where do we go from here? We need monitoring. We
need enforcement. It is one thing to put a law on the books. But it's
another to make sure the law is implemented.

I am happy to announce we will use the power of the Internet to track
what is happening. We added an anti-corruption section to the Commerce
Department's Homepage. It reports anti-corruption initiatives here and
around the world. So I urge you to click on at:

We need to ask some other questions as well: what do we do in other
parts of the world? And what do we do to get at the demand for bribes?

It is important to look beyond the OECD, because bribery is
everywhere. On a recent trip, I asked 15 business people what the
biggest obstacle was to doing business in emerging markets. Eighty
percent said: corruption.

Our efforts have already started in three areas.

First, Latin America. Twenty-five countries have signed the
Inter-American Convention, negotiated within the Organization of
American States. It addresses bribery and corruption. And it would bar
government officials from seeking and taking bribes.

Second, Asia. APEC is making progress. It has issued principles on
transparency in government procurement. And there are guidelines for
best practices in open and competitive bidding. Now is the time for
further progress. APEC's leaders know transparency is key to restoring
growth and opening markets. We are working with the private sector on
an anti-corruption agenda. This includes a training program to help
companies in Southeast Asia improve their record keeping.

And third, the World Trade Organization. A WTO working group hopes to
conclude an agreement later this year. It would be a big step forward
in transparency in government procurement.

Let me say that as important as these agreements are the most
important thing a country can do is this: pass strong laws making it a
crime for government officials to solicit and accept bribes. And
remember: corruption can be reduced through deregulation and
privatization, too.

International organizations and groups like Transparency International
have a role to play. So does the private sector. I believe companies
should adopt codes of conduct. They should set up ethics offices, like
we have in government. And they should train employees to be on the
watch for bribes. All companies must take steps.

In closing, let me offer the opinion of Teddy Roosevelt. We have an
affinity for him because he signed into law the legislation creating
the Commerce Department. President Roosevelt believed people who bribe
were as wicked as those who murder. As he said: "the murderer takes
one life against the law. Those who bribe assassinate the commonwealth

He said this at the beginning of the century. And I am repeating it at
the end of the century. I hope with your help, 100 years from now we
won't be saying it again. Thank you.

(end text)