Carol Giacomo
Reuters
April 27, 2004

The Senate Foreign Relations Committee has begun a probe into allegations of corruption in projects managed by the World Bank and its affiliates, Senate sources said on Tuesday.

Committee staff members have been quietly looking into charges for some time but the first of an indefinite number of hearings is set for May 13. Projects under review include the Yacyreta Dam project on the Argentina-Paraguay border, the Lesotho Highlands Water Project and some projects in Cambodia, according to letters obtained by Reuters.

The probe was initiated by Committee Chairman Richard Lugar, an Indiana Republican, whose panel has oversight responsibility for international financial institutions receiving U.S. contributions.

“Senator Lugar strongly supports the goals and objectives of international development institutions, including eliminating poverty in the Third World and working to improve standards of living, such as providing clean water,” a committee staff member told Reuters.

“Having said that, the chairman has now undertaken an ongoing review of the international financial institutions as it relates to their success in combating corruption,” he said.

The aide said Lugar’s “long term goal is to bring about accountability in the system and this review is an opportunity for the banks to tell their story, what they are doing to fight corruption.”