Contact Person:
Caroline Anstey (202) 345-3387 or (202) 473-1800
Canstey@worldbank.org
WASHINGTON, December 6, 2000--An internal World Bank investigation has disclosed that three Bank staff members engaged in corrupt activities in connection with funds administered by the Bank. Investigators from the Bank's Corruption and Fraud Investigations Unit as well as the Office of Business Ethics and Integrity were alerted to the activity through a call placed to the Bank's hotline for reporting fraud and corruption. The hotline was established in 1998 as part of a series of anti-corruption measures the Bank put in place.
The investigation revealed that the staff members were paid or agreed to receive kickbacks by two separate groups of Swedish companies in exchange for steering certain Bank contracts to those firms. In other instances the contracts were awarded for ineligible activities. The three staff members involved have been fired.
The World Bank contracts were financed by various consultant trust funds that the World Bank administers on behalf of member governments. The World Bank will reimburse the trust funds for the value of all the contracts that were used to fund ineligible activity or that were awarded as a result of kickbacks or other corrupt actions. The value of the contracts tainted by corruption or ineligible activity totals just under $900,000.
In 1998 the Bank also established a process through which companies found to have engaged in corrupt activities could be debarred from future work with the Bank or in connection with Bank-financed projects. The Bank considers the misconduct uncovered to be serious and intends to refer the companies involved to the Bank's debarment process. If debarred, the names of the companies will be made public. (Since 1998, 53 companies have been debarred by the Bank--their names are posted on the Bank's external website at http://www.worldbank.org/html/opr/procure/debarr.html).
The Bank also intends to pursue the matter through all available means including referral to criminal authorities in the United States and Sweden. If prosecuted, the names of the individuals concerned will be made public. The Bank has already taken measures to improve the control environment for trust fund management and will continue to do so. |
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