[Senate Report 110-35]
[From the U.S. Government Publishing Office]
Calendar No. 75
110th Congress Report
SENATE
1st Session 110-35
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TO PROVIDE THAT THE EXECUTIVE DIRECTOR OF THE INTER-AMERICAN
DEVELOPMENT BANK OR THE ALTERNATE EXECUTIVE DIRECTOR OF THE INTER-
AMERICAN DEVELOPMENT BANK MAY SERVE ON THE BOARD OF DIRECTORS OF THE
INTER-AMERICAN FOUNDATION
_______
March 9, 2007.--Ordered to be printed
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Mr. Biden, from the Committee on Foreign Relations,
submitted the following
R E P O R T
[To accompany S. 676]
The Committee on Foreign Relations, having had under
consideration a bill to provide that the Executive Director of
the Inter-American Development Bank or the Alternate Executive
Director of the Inter-American Development Bank may serve on
the Board of Directors of the Inter-American Foundation,
reports favorably thereon and recommends that the bill do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................2
III. Discussion.......................................................2
IV. Cost Estimate....................................................3
V. Evaluation of Regulatory Impact..................................4
VI. Changes in Existing Law..........................................4
I. Purpose
The legislation is designed to permit the President to
appoint the U.S. Executive Director of the Inter-American
Development Bank, or his alternate, to serve as a member of the
Board of the Inter-American Foundation.
II. Committee Action
S. 676 was introduced by Senators Biden and Lugar on
February 17, 2007. It is cosponsored by Senator Hagel. On March
6, 2007, the committee ordered the bill reported favorably by
voice vote.
III. Discussion
On January 9, 2007, the President nominated Hector Morales
to serve as a member of the Board of Directors of the Inter-
American Foundation. The nomination is pending before the
Committee on Foreign Relations. Mr. Morales is currently
serving as the United States Executive Director of the Inter-
American Development Bank, a position to which he was appointed
after receiving the advice and consent of the Senate in
November 2004. The position on the Board of the Inter-American
Foundation would be a part-time appointment.
By law, the Board of the Inter-American Foundation consists
of nine members. Of these, three members ``shall be appointed
from among officers or employees of agencies of the United
States concerned with inter-American affairs.'' (Section 401(g)
of the Foreign Assistance Act of 1969; 22 U.S.C. 290f(g)). It
is not clear that Mr. Morales would qualify for appointment
under this statute, if confirmed by the Senate, because the
U.S. Executive Director of the Inter-American Development Bank
is not considered a U.S. government officer or employee. Most
significantly, the salary of the Executive Director is paid by
the Bank, not the United States government. In fact, the
statute governing U.S. participation in the Bank prohibits
salary payments from the Treasury to the Executive Director
(Section 3(c) of the Inter-American Development Bank Act, 22
U.S.C. 283a(c)).
Other provisions of federal law support the conclusion that
the Executive Director is not an ``officer or employee of
agencies of the United States.'' To be an ``officer'' or
``employee'' under federal personnel law (title 5 of the United
States Code), one must have an appointment ``in the civil
service.'' (5 U.S.C. 2104 and 2105). The term ``civil service''
is separately defined as consisting of appointive positions in
one of the three branches of the federal government. (5 U.S.C.
2101(1)) Quite obviously, the Inter-American Development Bank
is a multilateral institution, not a branch of the federal
government.
Additionally, under a law enacted in 1970, U.S. Executive
Directors of international financial institutions are eligible
for ``all employee benefits afforded employees in the civil
service of the United States.'' (Section 51 of Public Law 91-
599; 22 U.S.C. 276c-2). It follows that if the Executive
Directors were U.S. government employees, such a provision of
law would be unnecessary.
To be sure, the Executive Director, and his alternate,
receive instructions from the Secretary of the Treasury. The
Inter-American Development Bank Act is filled with statutory
mandates compelling the Treasury Secretary to instruct the
Executive Director to take certain actions at the Bank. The
Executive Director is thus acting as a U.S. representative; but
doing so does not convert him to the status of a U.S.
government employee.
In sum, the committee believes there is a substantial
question whether the U.S. Executive Director of the Inter-
American Development Bank is an ``officer or employee of [an]
agenc[y] of the United States'' within the meaning of the
Inter-American Foundation Act. Accordingly, the committee
believes this legislation is necessary in order to permit the
Executive Director to serve on the Board of Directors of the
Inter-American Foundation. The legislation is drafted so that,
in the future, the President may also appoint the Alternate
Executive Director to the Board of the Foundation.
IV. Cost Estimate
Pursuant to Rule XXVI, paragraph 11(a) of the Standing
Rules of the Senate, the following cost estimate has been
provided by the Congressional Budget Office.
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
March 9, 2007
S. 676
A bill to provide that the Executive Director of the Inter-American
Development Bank or the Alternative Executive Director of the Inter-
American Development Bank may serve on the Board of Directors of the
Inter-American Foundation
AS ORDERED REPORTED BY SENATE COMMITTEE ON FOREIGN RELATIONS ON MARCH
6, 2007
The Inter-American Foundation is a government agency with a
mission to promote development, growth, friendship, and
democracy in the Western Hemisphere. Its board of directors
consists of nine individuals, three of whom are required to be
government officials who work in agencies of the United States
concerned with inter-American affairs. S. 676 would
specifically allow the United States Executive Director or the
Alternative Executive Director of the Inter-American
Development Bank to serve on the board of directors for the
Inter-American Foundation in one of the three slots reserved
for government officials. (The Inter-American Development Bank
is a multilateral bank that provides financing for a variety of
economic, social, and institutional projects in Latin America
and the Carribean.)
CBO estimates that enacting S. 676 would have no budgetary
effect. S. 676 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Sam Papenfuss.
This estimate was approved by Peter H. Fontaine, Deputy
Assistant Director for Budget Analysis.
V. Evaluation of Regulatory Impact
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VI. Changes in Existing Law
In compliance with paragraph 12 of Rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing proposed
to be omitted is enclosed in black brackets, new matter is
printed in italic, existing law in which no change is proposed
is shown in roman).
Foreign Assistance Act of 1969
* * * * * * *
PART IV--THE INTER-AMERICAN FOUNDATION ACT
Sec. 401. Inter-American Foundation.--(a) * * *
* * * * * * *
(g) The management of the Foundation shall be vested in a
board of directors (hereafter in this section referred to as
the ``Board'') composed of nine members appointed by the
President, by and with the advice and consent of the Senate,
one of whom he shall designate to serve as Chairman of the
Board and one of whom he shall designate to serve as Vice
Chairman of the Board. Six members of the Board shall be
appointed from private life. [Three members of the Board shall
be appointed from among officers or employees of agencies of
the United States concerned with inter-American affairs.] Three
members of the Board shall be appointed from among the
following: officers or employees of agencies of the United
States concerned with inter-American affairs, the United States
Executive Director of the Inter-American Development Bank, or
the Alternate Executive Director of the Inter-American
Development Bank. Members of the Board shall be appointed for
terms of six years, except that of the members first appointed
two shall be appointed for terms of two years and two shall be
appointed for terms of four years, as designated by the
President at the time of their appointment. A member of the
Board appointed to fill a vacancy occurring prior to the
expiration of the term for which his predecessor was appointed
shall be appointed only for the remainder of such term; but
upon the expiration of his term of office a member shall
continue to serve until his successor is appointed and shall
have qualified. Members of the Board shall be eligible for
reappointment. All individuals appointed to the Board shall
possess an understanding of and sensitivity to community level
development processes. No more than 5 members of the Board may
be members of any one political party.
* * * * * * *