AT A GLANCE: The World Bank Group’s Department of Institutional Integrity (INT) was established in 2001 as the independent investigative arm of the Bank. The Integrity Department investigates allegations of fraud and corruption in Bank-financed projects, as well as allegations of possible staff misconduct, and refers its findings to decision makers such as Regional Operations, the President, and the Bank’s Sanctions Board (for external cases); and the Human Resources Services Vice President (for staff misconduct cases) for further action. When appropriate, the Department also refers its investigative findings to the authorities of relevant member countries, in the event that INT uncovers information during an investigation that may indicate that a member country’s laws have been broken. INT closed a total of 301 cases in Fiscal Year 2007 (July 1, 2006 – June 30, 2007), including cases of fraud and corruption in Bank-financed projects and cases of alleged staff misconduct, an increase of 60 cases from FY06. In addition, the total carryover of open cases into FY08 was 232 cases, a decrease of 62 cases (21 percent) from the FY06 backlog and the lowest year-end total since Fiscal Year 2002. INT’s External Unit, which investigates allegations of corruption in Bank projects, closed 149 cases in FY07, one more than in FY06. The largest single source of allegations of fraud and corruption in Bank-financed projects in FY07 was World Bank staff and consultants, at 35 percent of all allegations, up from 32 percent in the previous two fiscal years. The nature of the allegations included procurement fraud, collusion, kickbacks and bribes, and the misuse of project assets, the report notes. On the basis of such investigations, INT made nine referrals of findings to borrower countries and other donors for their information or action in FY07.
The Integrity Department also completed 227 internal cases involving staff misconduct over the past two fiscal years. Of these, INT substantiated allegations in 77 of the cases involving 78 staff members. Equally important, after investigating the allegations, INT cleared the staff members of any wrongdoing in 44 internal cases. The remaining allegations were either unsubstantiated (46 cases), meaning the evidence was inconclusive, or referred (60 cases) to others in the institution for resolution. As a result of the substantiated allegations, the Bank terminated and/or barred from rehire 22 staff and disciplined 11 others for fraud and corruption; terminated and/or barred from rehire five staff members for sexual harassment; disciplined five for failure to comply with personal obligations; terminated and/or barred from rehire seven others for conflict of interest or other violations; and disciplined four others for conflict of interest or other violations. The remaining 24 staff brought themselves into compliance with their legal obligations as a result of INT’s intervention. It is important to note that the number of serious allegations involving Bank staff members represents less than 1% of the institution’s total workforce. One overarching finding from the investigations into fraud and corruption in Bank-financed projects is that the schemes devised by corrupt actors are broadly similar whether in Africa, Asia, Europe, Latin America, or the Middle East. This is a critical lesson learned, as it is allowing INT to devise common interventions on a Bank-wide basis. But while INT has now gained a deep and growing understanding of the nature of vulnerabilities to corruption in Bank-financed projects, knowledge of the frequency, scope and depth of the problem is less certain. This is partly because the allegations INT receives are only a subset of the entire universe of corrupt activities, but also because INT has a finite ability to actively investigate all the allegations it receives. In FY07, INT launched a new Voluntary Disclosure Program (VDP). The VDP gives firms involved in contracts related to Bank projects the opportunity to: cease corrupt practices; voluntarily and fully disclose information about misconduct that is sanctionable by the Bank; adopt a compliance program monitored for three years by a Compliance Monitor; and avoid public debarment for disclosed past misconduct. The firm obtains confidentiality in exchange for full and proactive cooperation. Another proactive diagnostic tool used by INT is the Detailed Implementation Review, or DIR. Conducted in cooperation with country offices, a DIR is designed to review Bank-financed projects by focusing on identifying irregularities or irregularity indicators of fraud, collusion, and corruption in the procurement and disbursement process, in contract management, and in the implementation stage of projects. Building on the experiences of DIRs, which have been in use since 2002, the Bank and the countries involved have identified remedial measures to lessen the incidence of fraud and corruption in Bank-financed projects. In FY07, INT undertook a DIR of five projects across the Bank Group’s health portfolio in India; this review was made public on January 11, 2008. The Integrity Department recently underwent an Independent Review, which was headed by Paul Volcker, former Chairman of the U.S. Federal Reserve. The Volcker panel’s detailed recommendations are now being implemented by the World Bank Group. INT maintains an independently staffed 24/7 international hotline (1-800-831-0463) to receive allegations of possible corruption, and reports also can be made to the INT team online, either through email: investigations_hotline@worldbank.org; or through the Department’s website: www.worldbank.org/integrity. A copy of Improving Development Outcomes: Integrity Report of the World Bank Group, Fiscal Year 2007 can be downloaded at www.worldbank.org/integrity.
-###- Updated March 2008 Contact:
David Theis, (202) 458-8626
dtheis@worldbank.org |
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