The Government Accountability Project Says

Corruption Exposed At World Bank

GAP Again Calls for Adoption of Internal World Bank Whistleblower Plan After Four-Month US News & World Report Investigation Exposes Widespread Wrongdoing

“The Bank is uniquely placed to set the highest standards for accountability worldwide,” said GAP’s International Program Director. “Management can no longer Point the Finger at Borrowing Countries with lax protections as the source of the Devastating Cost of Corruption. The World Bank itself Fosters Fraud and Abuse Within its own organization by silencing many responsible staff members and Shielding those who Abuse the System.”

Washington, DC – Today, the Government Accountability Project (GAP) hailed a 10-page investigative report focusing on Сorruption at the World Bank. The article in the April 3 2006 edition of US News & World Report, which hit newsstands today, focuses on extensive internal problems at the bank including how “Kickbacks, Payoffs, Bribery, Embezzlement, and Collusive Bidding plague bank-funded projects around the world.” The report estimates that more than 20 percent of the loans distributed by the World Bank, or $4 billion annually are associated with corrupt practices. The report provides a blueprint for modernizing that institution’s inadequate whistleblower protections. If the Vaughn proposal had been in place at the World Bank during the article’s examples of corruption, many of the issues detailed by this groundbreaking report would have been brought to light sooner, and the resulting damage might never have occurred.

The thorough investigative report details numerous problems at the World Bank. These include the following:

• Staffers have traditionally been professionally rewarded for ensuring that projects go through as planned, but not for reporting corrupt practices. GAP has information that whistleblowers who report corruption are often punished for doing so.

• The bank’s Department of Institutional Integrity (INT) currently has a backlog of over 250 complaints, with only 22 investigators working on them. However, there is information that not all these complaints are legitimate, but are instead spurious efforts intended to Victimize Whistleblowers for Reporting Corruption. The INT is not independent of the World Bank. The Vaughn Report recommends that conflict-of-interest protocols be put in place to create greater independence.

The Vaughn Report, released publicly by GAP last month, contains the full recommendations of noted whistleblower law scholar Robert Vaughn of American University Law School. The report, commissioned by the World Bank but Kept Hidden from outside view, incorporates “best practices,” many of which have already been adopted by the United Nations. These practices have been approved by the Organization of American States to implement its Inter-American Convention Against Corruption, and were enacted by Congress last fall as U.S. policy to strengthen anti-corruption efforts at all multilateral development banks (MDBs).

During the upcoming annual board meetings of the World Bank and International Monetary Fund in April 2006, GAP will join other international non-governmental organizations to coordinate campaigns that Demand Bank Accountability and an End to Policies that allow Billions of Dollars to be Stolen from Deserving Impoverished People. Congress has repeatedly directed the Treasury Department to institute safe channels for reporting corruption, fraud, and abuse to protect America’s $32 billion investment in the World Bank and ensure that communities in poor countries are appropriately served.

The early warning of corruption provided by whistleblowers is a proven antidote – the World Bank has the ability to enact this reform easily and it’s Staff is Pleading for this action to be taken.

The full Vaughn Report can be viewed in pdf. through GAP’s Web site

Also - If you are thinking about 'Blowing the Whistle', you should read GAP's highly acclaimed 'Courage Without Martyrdom' - The Introduction is here