Corruption

World Bank chief denies corruption claims

World Bank president James Wolfensohn has dismissed United States allegations that billions of dollars of bank funding was misused as “frivolous.”

In his first public remarks since a US Senate Foreign Relations Committee hearing on May 13 that looked into corruption at multilateral agencies, Mr Wolfensohn said the World Bank was leading the fight against corruption in the development community.

“We have more investigators and more programs on corruption than I think the entire rest of the development community put together,” he told reporters at a briefing on the bank’s upcoming poverty conference in Shanghai, China.

“So the notion that we should be attacked on corruption is frivolous,” he added.

He said research by Jeffrey Winters, an associate professor at Northwestern University, that the World Bank had lost $US100 billion on corruption was an “incomprehensible assertion that is not soundly based”.

“I do believe that we should all focus on corruption but the bank is rated the number one in the fight against corruption.

“I cannot understand why someone is taking a shot at us when it’s a thing I pride us most on,” Mr Wolfensohn said.

Senator Richard Lugar, chairman of the Senate committee, commended Mr Wolfensohn for bringing more attention to corruption but said it remained a serious problem.

The Indiana Republican cited experts who calculate that between $US26 billion and $US130 billion of money lent by the bank for development projects since its inception in 1946 had been misused.

In 2003, the bank distributed $US18.5 billion in developing countries.

Mr Wolfensohn said the motivation for the hearing “might be political,” when asked if there was any basis for the hearing.

“I don’t know where this comes from and the assertions are whimsical but it could be politically motivated,” he said.

Like other United Nations agencies, World Bank officials are not allowed to testify in public forums.

However, senior bank officials gave lawmakers a private briefing on the bank’s work on corruption.

Mr Wolfensohn said the bank had black-listed around 150 companies and handed over suspected corrupt officials to authorities for criminal investigation.

“We’re looking very carefully at ourselves and very carefully at the odd person who is trying to make a fast buck,” he said.

ABC News, May 19, 2004

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