Mind the GAP
Why are some World Bank officials trying to discredit a report that hasn't come out yet?
BY BRET STEPHENS
Tuesday, September 4, 2007 12:01 a.m. EDT
We are about to find out what sort of president of the World Bank Robert Zoellick intends to be.
On Thursday, the Government Accountability Project, (GAP), a self-described public interest law firm, will release an unofficial report on the Department of Institutional Integrity, the World Bank's anti-corruption unit known internally as the INT. Next week comes a second, official report about the INT from a panel of worthies led by former Federal Reserve Chairman Paul Volcker. By the end of the month the INT intends to release its own report on the Bank's health-related projects in India, where there is evidence of corruption running into the hundreds of millions of dollars.
That third report is what the first two are really about. But whether its conclusions are ever acted on--or so much as shared with the Bank's funders, including the U.S. Congress--will depend on whether Mr. Zoellick has the courage to confront his entrenched bureaucracy.
Some background: In February, then-World Bank President Paul Wolfowitz named Mr. Volcker, who had previously led the inquiry into the U.N.'s Oil for Food scandal, to conduct the INT review. Like Mr. Wolfowitz, Mr. Volcker is outspoken about the evils of corruption, which puts both men at odds with Bank bureaucrats who tend to think of it as the acceptable price of "doing good" in the developing world. The Volcker Panel's remit is to find ways to improve the INT, a relatively new and small unit within the Bank tasked with investigating everything from complaints about sexual harassment to evidence of bid-rigging, bribery, mismanagement and fraud in the Bank's $23 billion annual lending portfolio.
It wasn't long before Mr. Wolfowitz became embroiled in the controversy over his girlfriend's pay raise, based on information leaked first to GAP and then to the media. Mr. Wolfowitz was soon gone, but the Volcker panel soldiered on. Then, in mid-June, bank staff arrived at their desks to find an email from Beatrice Edwards, GAP's international program director.
"At the suggestion of various World Bank staff members," wrote Ms. Edwards, "we are conducting [a review of the INT] as an effort parallel to the work of the Volcker Panel." After requesting her correspondents' participation in GAP's review, she added that "never in our practice has a witness' identity been revealed without that person's express permission." Notably, the GAP review was slated to be released a week before Mr. Volcker's, raising the question of whether the two were operating in parallel or at cross-purposes.
Ms. Edwards' letter raised other questions, too. Who among the "World Bank staff members" would wish to undermine the Volcker panel, and why? Why involve the GAP? Is it a credible outfit? Are its promises of confidentiality good?
An answer to the first question came a few days later in an internally circulated memo written on behalf of the Bank's "senior management team," then led by Managing Director Graeme Wheeler. While noting that the Bank "fully supports the work of the Volcker Panel" and "[reaffirming] the importance of the existing standards of disclosure," the memo simply acknowledged the GAP study while doing nothing to dissuade bank staff from participating.
It isn't surprising that Mr. Wheeler, who led the staff coup against Mr. Wolfowitz, would support the GAP review: The New Zealander is widely seen within the Bank as an enemy of Suzanne Rich Folsom, the American ethics lawyer who runs the INT. Mr. Wheeler also oversees the Bank's activities in South Asia. In late 2005, Ms. Folsom released a devastating INT report on the Bank's health-related projects in India. Now her team is completing a follow-up study on India that may prove even more embarrassing to Mr. Wheeler and his deputies.
It also isn't surprising that GAP would be enlisted to discredit the INT and Ms. Folsom. According to a 1990 article in the Washington Monthly, GAP is a child of "the unapologetically leftist Institute for Policy Studies," and Ms. Folsom is considered the last Wolfowitz holdover at the Bank (though she was initially hired by former President Jim Wolfensohn, himself a Clinton appointee). The GAP campaigned openly and aggressively for Mr. Wolfowitz's resignation, and in a telephone interview Ms. Edwards makes little secret that the report--leaked last week to sympathetic journalists--will call for Ms. Folsom's dismissal as well. "Quite frankly, many people have voiced concerns about her," she says.
That's true, though one has to wonder whether Ms. Folsom's accusers might also be targets of her corruption investigations and thus have a motive to see her discredited. Also true is that many people have been voicing "concerns" about GAP for many years. In a sharply worded letter to GAP from December 2004, Scott White, the bank's deputy general counsel, cut off all cooperation with a previous GAP "study" of the Bank's whistleblower protection policies when it was discovered that GAP was simultaneously representing Bank staff in suits against the institution. "Since GAP has taken on an adversarial role in matters pending with the Bank, GAP is no longer in a position to conduct an independent review . . . and has severely compromised its own credibility," wrote Mr. White. In essence, he was accusing GAP of being a shakedown operation.
Yet that may be as nothing next to what GAP is now attempting. Contrary to Ms. Edwards' assurances, Bank staff who "participate" in GAP's review by divulging confidential information are not automatically entitled to an attorney-client privilege. As former Justice Department official David Rivkin notes, "an attorney is not a confessor," and "the public interest" is not a client. By making promises she can't keep, Ms. Edwards, who is not a lawyer, may be misleading World Bank staff.
Which brings us back to Mr. Zoellick. Bank sources say that Mr. Wheeler has been actively lobbying his boss to meet with Ms. Edwards and take the GAP report seriously. Surprise, surprise. What Mr. Zoellick chooses to do will tell us whether "integrity" has any future at the World Bank.
Mr. Stephens is a member of The Wall Street Journal's editorial board. His column appears in the Journal Tuesdays.
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