Reuters AlertNet Lite - Whistle-blower group takes aim at World Bank unit

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Whistle-blower group takes aim at World Bank unit

06 Sep 2007 23:36:56 GMT
Source: Reuters

WASHINGTON, Sept 6 (Reuters) - A whistle-blower protection group said on Thursday the World Bank's anti-corruption unit had lost focus and its investigations lacked transparency.

The Washington-based Government Accountability Project said the Department of Institutional Integrity, which probes corruption and fraud in World Bank-financed projects, had become isolated from bank employees and its own staff felt intimidated.

The Government Accountability Project, known as GAP, was prominent in leaking documents from World Bank insiders related to a high-paying promotion for the companion of former bank Paul Wolfowitz, who resigned on June 30 as a result of the ensuing scandal.

The group said in a report it had launched a review of the World Bank's anti-corruption unit after it was approached by a number of confidential whistle-blowers who were "reluctant to trust the capabilities of INT."

The report comes a week before the release of findings by former Federal Reserve Chairman Paul Volcker and a panel of experts commissioned by the bank to review the activities of the bank's anti-corruption department.

GAP said it had interviewed current and former World Bank staff and people associated with the development lender during its investigation. It did not release their identities.

The anti-corruption unit is headed by Suzanne Folsom, an ethics lawyer who is also counselor to the bank's president. She was given the position of counselor by former World Bank President James Wolfensohn in 2003 and then appointed to head INT by Wolfowitz in 2005.

Folsom's second appointment raised questions because of her ties to the Republican party. It came at a time Wolfowitz, the former U.S. deputy defense secretary and an architect of the Iraq war, was under fire for relying on an inner circle of advisors from the Pentagon and White House.

Folsom's dual status represented a conflict of interest and "compromised her credibility and actions," GAP said, adding that there were also concerns among bank staff about the anti-corruption unit's investigative practices.

"They contend that breaches of confidentiality, lack of consultation with staff or affected government counterparts, a presumption of guilt in some cases and suppression of evidence in others ... all combined to undermine the confidence staff might have had in the department's capabilities," the report said.

World Bank spokesman David Theis said the allegations were based "solely on unfounded rumors and baseless insinuations."

"While the GAP has done important work in the past, it is deeply unfortunate that they are coloring their report with unwarranted personal attacks," he said.

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Last updated:Thu Sep 6 23:37:32 2007