The Whistleblowers' Tale
The real disgrace at the World Bank.
BY BRET STEPHENS
Tuesday, May 8, 2007 12:01 a.m. EDT
In the summer of 1997, two senior World Bank officials published an academic article under the cheerful title, "Africa on the Move: Attracting Private Capital to a Changing Continent." The authors, Jean-Louis Sarbib of France and Callisto Madavo of Zimbabwe, were responsible for the bank's work in Africa, and they took an optimistic view. "A new spirit of social and economic progress has energized much of the region," they wrote, "and gradually the rest of the world is beginning to take notice."
Among the bank's own contributions to this African Renaissance, as it was then being billed, was something called the Niger Health Sector Development Program. It had been approved by Mr. Sarbib the year before with the stated objectives of improving the quality and coverage of basic health services, expanding the population's access to generic drugs and reforming the health sector. The plan anticipated expenditures of $275 million over five years, starting with an initial grant of $40 million--big sums for a small, highly indebted and politically unstable country.
Months before the project was formally approved by the bank's board, however, doubts about its size, nature and prospective efficacy were being raised by a midlevel bank officer named Bahram Mahmoudi. An Iranian-born economist with extensive field experience in Africa, Mr. Mahmoudi had been in Niger in April 1996 on a separate project. But he had seen enough of the health program to share his misgivings about it with its manager.
Why, for instance, were most of the program funds being allocated to construction projects when the World Bank's own "assistance strategy" to Niger emphasized rural and preventive care? Why were 13 staff members--more than double the usual size--assigned to the program? Why--despite two years and nearly $1 million worth of "concept development"--had there been no adequate financial and economic analysis of the program's feasibility? Did Niger have the institutional capacity to handle such large investments? And was it appropriate for team members to be using their time in Niger to take their spouses on sightseeing tours?
None of these observations went down well with the management. Mr. Mahmoudi made himself even more of a nuisance at the bank in 1998, when he raised a flag with Messrs. Madavo and Sarbib over the dismissal, ostensibly on budgetary grounds, of a dozen employees, mostly from developing countries, and their subsequent replacement with a dozen mostly European ones. In July 1999, an independent investigation by the law firm Dewey Ballantine concluded this was not, as Mr. Mahmoudi believed, a case of racial discrimination, although it did cite "significant management problems."
Yet by the time that conclusion was reached Mr. Mahmoudi had left the bank, having ended a 20-year career with a sharp downward turn in his performance reviews and a pink slip. A review given a year prior to his criticism of the Niger program praised Mr. Mahmoudi's work in Africa for its "dynamism and perspicacity." By contrast, a review from 1997 notes that his work in Niger, "which initially received favorable comments from peer reviewers . . . was not endorsed by the management team which felt he had moved too quickly without carrying out sufficient dialogue."
Convinced he had been sacked for his whistleblowing, Mr. Mahmoudi appealed his termination to the bank's administrative tribunal. In May 2000 the tribunal agreed he had been wrongfully dismissed--albeit on procedural grounds--and ordered his reinstatement. In an extraordinary step, the bank cited presidential discretion to refuse reinstatement and instead offer compensation of 18 months salary.
Given usual bank practices, Mr. Mahmoudi was lucky to have gotten even that much. "Keep in mind that nobody is truly independent at the Word Bank," says former bank official Anthony Van Vugt. "Not the ethics officers, not the judges, not the staff association. The managers are very severe about anyone who speaks out."
The Dutch-born Mr. Van Vugt has his own bitter experience as a whistleblower. In 1995, he discovered that $100,000 had been misappropriated by his managers from a trust fund intended to finance water-sector reform in the Philippines. At his retirement that year, he submitted an audit certificate for the project making note of the misused money. Several months later he requested a copy of the certificate. "What I found," he recalls, "was a substitute statement that was signed in my name. The qualification [regarding the $100,000] that I had included in the original statement had disappeared."
Mr. Van Vugt then filed an ethics investigation. "I made the point to quite a few people that $100,000 had been used improperly, and that made people uncomfortable. Eventually, I find a piece of paper that says that Tony Van Vugt mismanaged his project and for that reason he shall be denied any future employment with the bank." The ethics investigation went nowhere.
For Mr. Van Vugt, that note foreclosed the often lucrative consulting opportunities many retired bank officials enjoy. For midcareer officials, the bank's hex can be absolutely devastating. It can make its enemies unemployable. A foreign national who loses his job can have his U.S. visa revoked. The result is a culture of conformity, silence and fear. "As soon as you're seen blowing the whistle," says Mr. Van Vugt, "your own colleagues won't even sit next to you in the cafeteria."
As for Mr. Mahmoudi, a vindication of sorts came several years later when the bank quietly released a report assessing the Niger health program. The program, on which $50 million was ultimately spent, was rated as "unsatisfactory" for bank performance, borrower performance, sustainability and "quality at entry." A comparative analysis of project performance across six regions shows that during the tenure of Messrs. Sarbib and Madavo, Africa had the highest number of projects yet the lowest likely sustainability percentage, the lowest satisfactory percentage for bank performance and the lowest satisfactory borrower performance at implementation.
Mr. Sarbib was subsequently promoted to senior vice president before retiring last year. Mr. Madavo is a visiting professor at Georgetown. Both men recently signed a public letter calling on Paul Wolfowitz to resign for damaging the bank's reputation.
Mr. Stephens is a member of The Wall Street Journal's editorial board. His column appears in the Journal Tuesdays.
opinionjournal.com |
