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Sunil Chacko

Sunil Chacko

Posted: April 7, 2008 08:12 PM

A Potential Vice-Presidential Candidate Struggles with Legislative Dealmaking

Senator Evan Bayh is on the short-list of vice-presidential candidates for both Senators Barack Obama and Hillary Clinton -- so his effectiveness as the potential president of the Senate is a matter of some importance. Moving an ambitious legislative agenda forward is a core responsibility of the vice president of the US who is the sole constitutional officer bridging the Executive and Legislative branches of government and has offices in both the Senate and White House Office Buildings.

Having been a popular two-term Governor of Indiana, Evan Bayh also has that vital executive experience that both Senators Obama and Clinton lack, and to top it all, Indiana is a swing state, likely pivotal in the very closely fought electoral-college battle that we are predicted to witness later this year.

This is why I highlighted the dropping by the Senate-House conference of the GAO Study on accountability/transparency and anti-corruption at the World Bank that Senator Bayh had proposed. The entire Senate had approved the study unanimously, and the Senate bill containing the GAO study had been voted 81-12 in the Senate.

But somehow, the Senate-House conferees dropped the study from the final bill that became law. While it is generally not mandatory to have a legislative provision to undertake a GAO study, in the case of multilateral agencies it may well be essential. That is why the mystery of how the study got dropped, and who took the initiative to drop it becomes pertinent: An effective manager will be needed to shepherd through the Senate-House conference process that seeks to unify separate bills passed in each house.

The Senate Majority Leader and the Speaker appoint members of the Senate-House Conference Committee, who are generally the senior members for each party on the relevant subcommittees. For the Senate side, the key subcommittee chair is Senator Patrick Leahy, an Obama ally, and for the House of Representatives, Rep. Nita Lowey, a Clinton surrogate. Key staff directors are Tim Rieser for the Senate subcommittee and Nisha Desai for the corresponding House subcommittee.

What puzzles many is why and how a key provision that was unanimously approved in the Senate got dropped in that conference process that yielded the final bill, when both the Senate and the House subcommittees are run by Democrats. The questions that keep coming up -- and will be relevant in order to convert the soaring rhetoric of Obama and Clinton into flight-worthy legislation -- are questions that have been put to several offices, but without a clear answer:

-- Who dropped the ball on that legislation?
-- Did anyone from the House object or did no one from the Senate side actively pursue that GAO item?
-- Who takes responsibility for the failure to include that key item?

-- In a nutshell, who took the GAO study out of the joint bill -- staff or a Senator or Representative -- and if so, why?

Senator Bayh, who is not a member of the Appropriations Committee, is sending a letter to the GAO seeking to reinstate the study, according to Eric Kleiman, Bayh's Director of Communications. Kleiman himself confirmed this to me in writing, adding: "Senator Bayh is committed to getting this GAO study commissioned." It is unclear which other Senators are cooperating with Senator Bayh on the renewed push for the GAO Study on the World Bank. For instance, Senator Richard Lugar, the Ranking Republican Member of the Senate Foreign Relations Committee, also from Indiana, is known to be close to Senator Bayh and has pursued anti-corruption during the time he was Committee Chairman. Will he publicly back Bayh on this?

Ironically, Republicans are largely behind all efforts to ensure accountability and transparency -- hence inside observers say that the Democrats likely pulled the GAO study in the modern-day version of the "smoke-filled" room. This is why Senator Obama's call to put all proceedings of the legislature on C-Span makes sense, but may still not be sufficient for enhanced oversight as I pointed out here.

A massive 35% funding increase has been sought for the World Bank in FY09, among the largest percentage increases for a line item in the entire budget of President Bush. Can Senator Bayh make that increase conditional on the GAO study results now that the legislation was eliminated? What about a thorough vetting of all oversight matters by authorization committees, including the Foreign Relations subcommittee on International Development chaired by Senator Menendez (that has not scheduled a hearing on the subject since he took over as chair in January 2007), the Senate Finance Committee and indeed, Senator Bayh's own Banking subcommittee on International Trade and Finance. But meanwhile, the legislation that might have enabled course corrections has been eliminated. Are authorization committees merely talking shops and do only appropriations subcommittees count? And, is Senator Leahy too preoccupied with his important responsibilities as Chair of the Senate Judiciary Committee, where Ranking Member Senator Specter has threatened a shutdown of the Senate over the pace of appeals-court nominee confirmation hearings, to dedicate sufficient time and attention to the Appropriations Foreign Operations subcommittee?

SEC Chairman Christopher Cox has already indicated that sovereign wealth funds will invest heavily in developing countries, in addition to North America and Europe. Now, World Bank president Robert Zoellick has signaled that he will use the World Bank Group's resources to co-invest with sovereign wealth funds. That presents a scenario where the World Bank's investment arm that has been granted immunity will co-invest with sovereign wealth funds that too have sovereign immunities. That may well set up a possibility for doubling the multiple political and commercial risks, necessitating stronger oversight. But the top shareholder's oversight function was stymied, with the GAO, the investigative arm of the US Congress, probably unable to proceed with its study in the absence of legislation that ties future funding to the study results.

We hope Senator Bayh will clarify all those matters on the Indiana campaign trail for the presidential primary scheduled for May 6, and trust that Indiana-based local and national media will seek answers to those questions raised above, on an issue important for ensuring transparency and accountability at the top source of development financing. It is, after all, a test case of the avalanche of legislation that must follow the arrival of a new administration in January.