The World Bank’s INT Snubs Volcker

In September 2007, after a study that lasted several months, and including a highly distinguished panel of experts, Paul Volcker released the report of his Independent Panel Review into the World Bank Group Department of Institutional Integrity (INT). The review was in response to increasing criticism of the INT, through its first 8 years of operation, and recommendations in the Volcker’s report gave some level of hope to claimants who had increasingly become INT fodder.

On the 27th November, after having submitted evidentiary documents relating to a counterfeit Project Management unit stamp on the World Bank Municipal Development Project sub-credit agreement, and evidentiary documents relating to a $100 million dollar manipulation of Yerevan Water and Wastewater Company (YWSC) company finances by the Municipal Development Project’s Authorized representative, GAP's Director of International Programs wrote to the INT:

In the interests of expediency, Mr. Tasker requests that INT respond more clearly to the documentation he has already provided. Because of the complexity of the matter and the quantity of material, it also seems necessary that any review of Mr. Tasker's documentation by INT would require consultation with Mr. Tasker and a number of his witnesses in Yerevan. If such a step is acceptable to INT, we will be pleased to arrange it with Mr. Tasker.

On the 31^st January, Mr. Shapiro replied and wrote:

We would like to have an opportunity to review that documentation, in order to continue our efforts into your client's allegations.

Please note that INT will not provide any information regarding its investigative methodology as a precondition to receiving information on allegations of possible fraud or corruption. What I can state is that your client's allegation will receive a full objective review on the merits.

In September 2007, Mr. Shapiro wrote to GAP and advised that the claim had been categorized ‘Medium’ priority. Fortunately the Volcker report was published soon after that message, in which Clause 43 stated: “INT periodically reviews the "medium" priority cases in the event that additional evidence develops to warrant a higher ranking, but normally these cases are not otherwise investigated”.

That effectively meant the people of Armenia were not to benefit from an INT investigation into multi-million fraud, corruption and embezzlement, even though it was exposed by a Parliamentary Commission and had been detailed and formally submitted by the Government Accountability Project to the INT in a 62 page ‘Demand Letter’

The Shapiro message goes on with - Similarly, I will tell you that going forward we will not be engaging in a continuous back and forth negotiation with your client about what evidence he provides.

One Volcker Panel Review recommendation can be found in Clause 120 of his report, which states:

“INT should furnish regular updates to complainants and victims on the general status of an investigation and promptly respond to specific queries from complainants and victims, INT should develop written guidelines to ensure that its investigators adequately communicate with complainants and victims of alleged staff misconduct.”

It is quite clear that the INT has no intention of paying attention to Volcker.

The Shapiro message then included an interesting phrase that “If your client chooses to provide this information, we will safeguard it as we would any evidence which INT receives”.

It is not clear what Shapiro means by ‘safeguard’, but if the commitment is similar to the INT commitment to safeguard confidentiality of claimants, who are foolish enough to answer the World Bank call and submit information to the INT, then I have little reason to be encouraged. On the 31^st July 2004, in response to this claimant’s initial inquiry to the INT confidential hotline, the INT Integrity Officer wrote: “I will forward your request to the Task-Manager of the project in the Bank for his information and to the Country Manager”. The Country Manager is one of the persons Tasker accuses as being centrally involved in the fraud and corruption.

Of course, together with GAP, we are most willing to provide ALL the evidentiary material to the INT. But in the light of our experiences through the past 10 months, when the INT has given absolutely no indication that it has any intention whatsoever of carrying out a worthwhile investigation in response to this claim, we will be submitting evidence on a scheduled basis. And at the same time, the evidence will be published through this blog, so that the internet community will know the details of how the World Bank drives fraud and corruption in developing countries, and how the INT prefers to defend the corrupt integrity of the Bank to investigating claims of fraud and corruption.