Remarks of
AMBASSADOR WILLIAM T. PRYCE
Vice President, Washington Operations
Council of the Americas

PERMANENT COUNCIL OF THE ORGANIZATION OF AMERICAN STATES

MARCH 31, 2000

Enhancement of Probity and the Fight Against Corruption
In the Hemisphere
 

Good morning. I am delighted to be here today in this beautiful building to discuss the important topic of combating corruption in the hemisphere.

I am Bill Pryce, Vice President of the Council of the Americas in charge of our Washington operations. The Council is a leading business organization dedicated to promoting regional economic integration, free trade and investment, open markets, and the rule of law throughout the Western Hemisphere. The Council's membership consists of over 200 major multinational U.S. companies with business interests in the region.

I appreciate being asked to join this panel to talk about the issue of corruption and discuss how addressing this once taboo subject is critical to ensuring the progress and development of Latin America.

I first want to commend the dedicated efforts of the OAS and particularly of Peru’s Ambassador to the OAS, Beatrice Ramacciotti, the Probity Working Group Chair, for advancing the cause of combating corruption in the Western Hemisphere.

Last May, at the State Department, the Council held its 29^th Washington Conference which brought together government and private sector leaders from throughout the Americas to discuss the topic of hemispheric integration. Participants discussed hemispheric trade relations and the prospects for monetary union within the Americas, but also discussed how social and political issues are critical to advancing the development of the region. One topic that was noted repeatedly was the subject of corruption and its corrosive influence throughout the Americas.

World Bank President James Wolfensohn, who spoke at the conference, talked about the growing interrelation of countries in the new economy and discussed the importance of sound fiscal and monetary policy. Mr. Wolfensohn spoke of the need to develop and maintain a solid macroeconomic framework. However, he noted that in examining what were the root causes of the instability of the global economy, the debate turned from the financial to the non-financial. Citing four principal issues that are central to the financial architecture of the hemisphere, Mr. Wolfensohn placed corruption as the top of the list.

Last year, at a Global Forum on Fighting Corruption, Wolfensohn stated "that the major inhibiting factor to investment and to consistent development; the major factor which affects the lives of poor people in terms of equity and in terms of their opportunity, is corruption." Our member companies have consistently mentioned this as a major negative factor when considering whether to invest in a country.

Another speaker from last year’s Council of the America’s conference who broached the topic of corruption was Secretary of State Madeleine Albright who discussed how corruption must be addressed if democracy and prosperity are to endure and be broad-based. She cited the Inter-American Convention Against Corruption as a major initiative that responds directly to the gaping inequality in the hemisphere. Without attention to topics such as corruption, she warned that economies could stumble and threaten stability.

While corruption is a political and social issue, it is also very directly an economic issue. Corruption discourages foreign investment and disrupts normal business practices. Each year, the Council assists its member companies in addressing disputes over questionable contracts and business practices with governments and business leaders from throughout the Americas. Corruption undermines respect for governmental institutions and fosters organized crime.

There are serious costs of corruption for companies. These are very hard to quantify. Information on missed opportunities is not easy to come by. But we don’t need these numbers to know that corruption negatively impacts companies. I think it is fairly intuitive that companies are weary of investing their funds in countries where there is not respect for the rule of law. Time and again, both in my present position and previously as an Ambassador and deputy chief of mission in embassies, companies have told me that corruption was a factor in their reluctance to invest.

It wasn’t that long ago that corruption was an unspoken problem. Now, there are conferences on the subject and a growing recognition that the topic must be addressed. I also think it is clear that we have made good progress. The climate of opinion is changing. It wasn’t that long ago that industrialized countries offered tax deductions for bribes. The OECD Bribery Convention was a strong step forward in recognizing and obliging industrial countries to discourage the giving of bribes. It was not long ago that businessmen bragged privately about their illicit business practices. Although the practices are not eliminated, there is a much greater sense that corruption is wrong.

The next step is the Inter-American Convention Against Corruption. Although the United States has not yet ratified this, I am confident that we will soon do so. The Council intends to work actively to achieve this goal. But we must also look beyond full ratification. To fully realize this convention we need to focus on implementation and the establishment of consistent rules. Multilateral follow-up is required to ensure that the damaging effects of corruption of and by public officials are eliminated. This conference is a significant step in that direction, and I want to thank once again all who worked so hard to bring it about.