Source:
Bank Information Center
Thu Sep 13 2007
In a report released on Thursday 6th, the US NGO Government Accountability Project (GAP) finds that the World Bank's Department of Institutional Integrity (INT) is undermined by a conflict of interest at its top ranks and serious long-term problems. After that, a panel created to review the work of the World Bank's anti-corruption unit released its own 40-page report.
The Government Accountability Project (GAP), a whistleblower protection organization, released its review of the World Bank's Department of Institutional Integrity (INT) and its practices from 2005-2007. The GAP based its review on interviews with and documents provided by current and former World Bank staff members.
INT is the Bank's internal, anti-corruption unit and is responsible for investigating allegations of fraud and corruption in World Bank Group operations as well as allegations of staff misconduct. INT reports its findings to senior management, who in turn decide what measures should be taken.
And herein lies the problem. Suzanne Folsom, INT's Director is also a counselor to the Bank President. Her dual role presents a conflict of interest and undermines her credibility and actions, GAP asserts. Folsom must either be the head of INT and investigate allegations or worry about the political consequences, but not both.
Folsom has strong Republican Party ties and was an important ally of former Bank President, Paul Wolfowitz, according to the Wall Street Journal. GAP played a key role in revealing Wolfowitz's violation of Bank policies, which ultimately led to his resignation in May.
The GAP report also documents several other immediate and longer-term problems at the INT including:
* Routine breaches of confidentiality during ongoing investigations between 2005 and 2007;
* A complex personal, professional and financial network of relationships among INT, the International Republican Institute, and Diligence, LLC, a corporate intelligence firm;
* INT’s failure to comply with an authorized audit, which former Bank president Paul Wolfowitz suspended in March 2007;
* Suppression of a report prepared by an INT team that investigated corruption in three World Bank projects in the Democratic Republic of Congo; the report was suppressed for political reasons with the cooperation of the director of INT;
* Failure to investigate serious allegations of fraud in the Municipal Development Project in Yerevan, Armenia although evidence is documented and the fraud is both extensive and ongoing.
GAP also found that personnel decisions within INT are non-transparent and tend to favor Americans over other nationalities.
Despite a substantial increase in its budget in FY 2006, INT failed to generate an increase in cases investigated and resolved, but resulted instead in a dramatic drop in the number of cases closed, according to the GAP review. Interviewees told GAP that external cases are unpredictably prioritized and the lessons learned from investigations do not get incorporated into Bank policy. Nor are these lessons transmitted to national authorities according to predictable and respectful protocols.
Another report on the same issue
Few days after GAP's report, the panel created to review the work of the INT, headed by former chairman of the US Federal Reserve Paul Volcker, released its 40-page report.
The panel recommended that the Bank create an external advisory oversight board to help Zoellick and the executive board monitor INT. Volcker suggested a group of three to five people with strong representation for Europe, Africa, Asia and Latin America.
The Bank is seeking comments on the report through 31 October.
Related Information:
-> Volcker report finds Bank ineffective in addressing corruption, by Bank Information Center
-> Read GAP's full review report (pdf format)
-> Read GAP's press release
-> World Bank Panel urges anti-graft overhaul, by IPS
For ongoing discussion of the reports, their fallout and all the gossip see the blog on IFIwatchnet: Corruption at the World Bank
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