Washington: Sen. Richard Lugar, R-Ind., said the
184-nation lending organization has tried to end corruption but the
problem persists. In a speech at the start of hearings on the
multilateral development banks, Lugar quoted expert estimates that
between $26 billion and $130 billion in bank loans has been misused
since 1946, when the organization started lending. “In its starkest
terms, corruption has cost the lives of uncounted individuals
contending with poverty and disease,” Lugar said. He said those who
support the work of development banks must ensure they do everything
possible to prevent and expose corruption involving the institutions,
borrowing governments and contractors. Other institutions under review,
Lugar said, include the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank and the European Bank
for Reconstruction and Development. The United States contributes more
than $1 billion a year to these organizations. The majority of the
funds go to the World Bank’s low-interest lending program for
developing countries. “It is critical that every development bank
dollar reaches its intended recipient,” Lugar said. Unfortunately that
is not happening.” He said the World Bank itself has identified
corruption as the single greatest obstacle to economic and social
development. Under bank president James Wolfensohn, the institution has
brought greater resources to bear on the corruption problem, Lugar
said. Wolfensohn and Enrique Iglesias, the head of the Inter-American
Development Bank, both Washington-based, were asked to testify before
Lugar’s committee but declined. They cited their practice of not
appearing before legislatures of their member countries.

Harry Dunphy, Los Angeles Times, May 13, 2004