World Bank turns anti-corruption effort inward
01:53 a.m. Jul 16, 1998 Eastern
By Andrea Shalal-Esa
WASHINGTON (Reuters) - The World Bank, which has led a drive against
corruption in borrowing countries, said it had hired outside auditors to
investigate possible embezzlement and kickbacks involving its own
officials.
World Bank President James Wolfensohn sent out an internal memorandum
saying he had set up an special internal fraud team and hired the global
accounting firm PricewaterhouseCoopers as well as two outside
specialists on fraud matters.
He said he had no reason to believe there was a widespread problem but
one investigation sparked by the internal probe had already led to a
civil lawsuit against a former bank official and other formal
investigations were under way.
''The trigger for these investigations was my decision ... that if the
bank were going to campaign against corruption in our borrowing
countries, we had to be absolutely certain that we held ourselves to the
highest standards on the inside,'' Wolfensohn said in the memo.
One source familiar with the investigation said the amount suspected in
kickbacks was low compared with the bank's annual lending of some $22
billion to developing countries.
''We're not talking about millions of dollars but rather tens of
thousands,'' the source said.
Wolfensohn said he was in ''constant personal contact'' with the
internal anti-corruption team and promised that the bank would pursue
the investigation ''vigorously and without fear.''
To aid in the probe, an outside firm will establish within the new few
weeks a hot line that staff members can call with concerns or
information about possible embezzlement, he said.
He encouraged all bank employees to come forward with any information
about possible wrongdoing and to cooperate with the investigations
already under way.
Bank spokesman Klas Bergman declined to comment on any specific
investigations that had started.
The bank's office of ethics issued a brief statement saying the bank
would not comment on current investigations and noting that the new
Oversight Committee on Fraud and Corruption had no direct connection to
any one investigation.
''The committee is merely one of many efforts undertaken by the bank to
combat fraud and corruption both within the institution and in
connection with bank projects throughout the world,'' it said, adding
that the bank made ''every effort to ensure that public funds are
properly disbursed.''
The Washington Post quoted a senior bank official in its Thursday
editions as saying that projects in Russia, Japan and Indonesia were
among those that had come under scrutiny.
The internal World Bank corruption probe comes against the backdrop of
stepped-up efforts by the bank and its sister organization, the
International Monetary Fund, to stamp out corruption in borrowing
countries.
Last September the bank warned that if a government was unwilling to act
against corruption, then the World Bank would have to curtail its level
of support to that country.
Last year the IMF suspended a $215 million loan to Kenya on the grounds
of poor governance and corruption. The World Bank then decided to
suspend direct budgetary support to the country.
The Post said a civil lawsuit had been filed against former bank
official Fritz Rodriguez, seeking to recover ''tens of thousands'' of
dollars in kickbacks the bank believes he took from a contractor on a
water utility project in Algeria.
Rodriguez, who retired last year, has denied the bank's allegations in
court filings, it said.
Copyright 1998 Reuters Limited |
