The Cops on the Bank Beat
Tougher oversight, increased disclosure are just the start
Sen. Richard Lugar, the genial Indiana Republican who chairs the Foreign Relations Committee, is keeping a close eye on the World Bank. Although he doesn't look much like a watchdog, Lugar sure talks like one when it comes to policing multilateral development banks. Indeed, Lugar has conducted a two-year examination of corruption at the World Bank and other such institutions, and last year he and other lawmakers pushed through legislation encouraging more openness and accountability in the institutions. President Bush signed the measure into law last November. Among other provisions, the law encourages the World Bank to monitor more closely the use of its loan proceeds on development projects and to improve its financial disclosure program for staff members. Lugar, who can't force the bank to adopt the reforms, says he nonetheless plans to keep the heat on, holding more hearings this year.
Sen. Charles Grassley, an Iowa Republican, also wants the bank to increase protections for bank staffers who blow the whistle on misconduct. "Good-faith whistle-blowers often face an uphill battle from the moment allegations are brought forth," he wrote the bank's president, Paul Wolfowitz, last September. Whistle-blowers, he added, "should be afforded the utmost protection during and after the review of any allegation."
Along those same lines, Melanie Beth Oliviero, who works for a whistle-blower advocacy group, the Government Accountability Project, worries that many bank staffers still refuse to come forward because they fear they will be retaliated against. She says that the bank needs to adopt procedures giving them the ability to report their allegations of abuse and corruption through a number of different bank channels. "With new management in place," she says, referring to Wolfowitz, "it is an opportune time for the World Bank to enact this plan."
Since joining the bank last June, Wolfowitz has embarked on an aggressive anticorruption campaign. Following up on the work of James Wolfensohn, his predecessor, he is pressing for companies to voluntarily disclose corrupt practices. He also has strengthened the bank's investigative unit and put in place, he says, stronger mechanisms for punishing corrupt companies.
This story appears in the April 3, 2006 print edition of U.S. News & World Report.
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