World Bank to beef up anti-corruption unit
By Lesley Wroughton
WASHINGTON, Jan 23 (Reuters) - The World Bank said on Wednesday it would adopt recommendations by a panel led by former Federal Reserve chairman Paul Volcker to beef up its main corruption fighting unit.
The World Bank, the globe's main poverty-fighting institution, has come under fire from member countries and U.S. lawmakers for not taking sufficient measures to root out corruption in development projects financed by the bank.
The bank said on Wednesday after an internal review that it agreed broadly with Volcker's recommendations, including the creation of a small independent advisory board to ensure the independence and accountability of the Department of Institutional Integrity, or INT.
The bank also said the department would work more closely with World Bank's main operations especially where there are early signs of wrongdoing, while cases involving staff misconduct would be placed under separate oversight.
It also said that the department needed to be more transparent about its policies and practices.
The Volcker panel was appointed last year by former World Bank president Paul Wolfowitz to examine the role played by the anti-corruption unit following criticism of its investigative practices.
The unit's head, Suzanne Rich Folsom, resigned last week to join the private sector. She was dogged by questions over whether her appointment in 2005 by Wolfowitz, former deputy secretary to the Pentagon, was tied to her association with the Republican Party.
Criticism intensified when her department became more aggressive in response to Wolfowitz's controversial anti-corruption campaign.
A World Bank spokesman denied last week that Folsom was forced out of the job.
"The work of INT is critical to the integrity of the World Bank Group and requires high level leadership," Zoellick said in a statement on Wednesday.
"That leadership will ensure these important initiatives are implemented so we can take stronger action against fraud and corruption and ensure money gets to the poorest people."
Zoellick has said he will seek a replacement for Folsom through a competitive process.
The decision to carry out Volcker's recommendations followed a review by an internal World Bank group and after discussions with the bank's executive board on Tuesday.
In a report to the board, the internal group said leadership and the "tone at the top" would be critical to pushing the bank's anti-corruption agenda forward.
It also said the fight against fraud and corruption would only be effective when all staff members were fully committed to the task. The group also said World Bank development projects should be designed in a way that deters and detects corruption. (Editing by Tomasz Janowski)
WASHINGTON, Jan 23 (Reuters) - The World Bank said on Wednesday it would adopt recommendations by a panel led by former Federal Reserve chairman Paul Volcker to beef up its main corruption fighting unit.
The World Bank, the globe's main poverty-fighting institution, has come under fire from member countries and U.S. lawmakers for not taking sufficient measures to root out corruption in development projects financed by the bank.
The bank said on Wednesday after an internal review that it agreed broadly with Volcker's recommendations, including the creation of a small independent advisory board to ensure the independence and accountability of the Department of Institutional Integrity, or INT.
The bank also said the department would work more closely with World Bank's main operations especially where there are early signs of wrongdoing, while cases involving staff misconduct would be placed under separate oversight.
It also said that the department needed to be more transparent about its policies and practices.
The Volcker panel was appointed last year by former World Bank president Paul Wolfowitz to examine the role played by the anti-corruption unit following criticism of its investigative practices.
The unit's head, Suzanne Rich Folsom, resigned last week to join the private sector. She was dogged by questions over whether her appointment in 2005 by Wolfowitz, former deputy secretary to the Pentagon, was tied to her association with the Republican Party.
Criticism intensified when her department became more aggressive in response to Wolfowitz's controversial anti-corruption campaign.
A World Bank spokesman denied last week that Folsom was forced out of the job.
"The work of INT is critical to the integrity of the World Bank Group and requires high level leadership," Zoellick said in a statement on Wednesday.
"That leadership will ensure these important initiatives are implemented so we can take stronger action against fraud and corruption and ensure money gets to the poorest people."
Zoellick has said he will seek a replacement for Folsom through a competitive process.
The decision to carry out Volcker's recommendations followed a review by an internal World Bank group and after discussions with the bank's executive board on Tuesday.
In a report to the board, the internal group said leadership and the "tone at the top" would be critical to pushing the bank's anti-corruption agenda forward.
It also said the fight against fraud and corruption would only be effective when all staff members were fully committed to the task. The group also said World Bank development projects should be designed in a way that deters and detects corruption. (Editing by Tomasz Janowski)
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