WASHINGTON: For years rumors of corruption surrounded an ambitious World Bank project for a system of reservoirs and water tunnels in the mountains of Lesotho in southern Africa. In 2002, the project director was convicted of graft and sent to jail.
But it took the bank another four years to bar two engineering companies that had been convicted of bribery from getting future contracts. During that time they collected $14 million in fees from the bank.
Combating corruption was a signature issue for Paul Wolfowitz in his two stormy years as bank president. Last year he hailed the belated blacklisting of the firms on the Lesotho project as helping to ensure "that precious public resources go to help the poor, for whom they are intended."
But the corruption issue was also been a source of anger at the bank that contributed to Wolfowitz's forced resignation last month amid charges favoritism. Some bank officials fear, and others hope, that with his departure the issue would fade.
All indications are, however, that his successor, Robert Zoellick - who won the unanimous approval of the World Bank's board on Monday - would not let that happen.
"Corruption is a cancer that steals from the poor, eats away at governance and moral fiber and destroys trust," Zoellick said. "The challenge is how best to clean corruption out. That's what the World Bank must diagnose, determine and execute in concert with developing and developed countries."
Zoellick has vowed in private meetings to press an anti-corruption agenda but also avoid Wolfowitz's mistakes, like cutting off money and punishing poor people dependent on bank programs in countries that happen to be poorly governed, bank officials say.
Zoellick, a former top trade envoy and deputy secretary of state under President George W. Bush, said he realized that much of the controversy under Wolfowitz had occurred because corruption was sometimes identified by him as more important than fighting poverty.
In addition, the head of the department of institutional integrity, Suzanne Rich Folsom, a Wolfowitz appointee and a Republican, has drawn fire for her management style.
Under Folsom's leadership, the department has gotten a 50 percent increase in funding and an expanded mandate to investigate corruption cases. Folsom's defenders say that it was inevitable that she would be unpopular, while critics say she has trampled on employee rights and been selective in her inquiries.
"There are definitely tensions in the system," Zoellick said. "What I've found is a high degree of distrust over the real purpose of the anti-corruption campaign. Our challenge now is to find real guidelines that can restore everyone's trust and assure governments that the bank is not wasting money."
How much corruption exists is a matter of conjecture. A former top official, requesting anonymity because of the sensitivity of the subject, estimated that it might affect, at least in small ways, as many as 40 percent of bank projects. Others say the money lost to graft may not be more than a few percentage points of bank lending.
No one disputes that in its six decades of existence, the bank did not do much about corruption until a decade ago, when its then president, James Wolfensohn, declared that something must be done to combat it.
The department of institutional integrity was established only seven years ago. It has barred 148 individuals and 190 firms from doing business with the bank. In an institution that employs 10,000 workers, 74 employees have been cited for cases of fraud and corruption.
In recent years, the bank has gone beyond specific cases and undertook systemic investigations into pervasive corruption problems in Vietnam, Indonesia, Kenya, Cambodia and India.
In India, for example, the investigation persuaded Wolfowitz to slow down three big projects worth nearly $700 million combating tuberculosis and providing maternal and child health care because of bid-rigging in procurement of pharmaceuticals that appeared to have been condoned, or to have involved, top officials in the government.
But when Wolfowitz's suspended funding for these programs, some bank officials and officials in the British development office, which was co-sponsoring the health projects, charged that innocent sick people would suffer. They forced a rewriting of the rules curbing the ability of the bank president to suspend funding unilaterally.
Wolfowitz also angered colleagues at the bank when he suspended funding for Uzbekistan over allegations of human rights abuses, with some officials charging that he was influenced by Uzbekistan's decision to bar American warplanes for its airspace.
In Vietnam, the bank's integrity division decided to investigate pervasive corruption problems after a scandal last year involving charges of theft, bribery, nepotism in a road-building project. Vietnamese prosecutors charged that road-building money lined the pockets of officials and also went to pay for gambling and prostitutes.
No comments:
Post a Comment