Friday, February 23, 2007

World Bank: "Over the two years covered by this report (which ended on June 30th last year) the department fully investigated 236 allegations of corruption in the bank's projects. It was able to make charges stick in just 71 cases (and dismissed them in another 53). Those two years saw 58 firms and 54 people barred from getting bank money. The blacklist included a couple of big names, including Thales Consulting and Engineering of France, which got a wrist-slapping one-year ban. The department also turned its lens on its colleagues, fully examining 92 allegations of fraud and corruption against the bank's staff, and substantiating 33. Some cheats fiddled taxes; others doctored expenses. One staffer charged phone-calls from one place, while claiming to attend training in another. The investigators still cite the “cancer of corruption” denounced by James Wolfensohn, an ex-president of the World Bank, in 1996. Since then, they have gained a better fix on the malignancy, they say: the same scams pop up everywhere. But they do not know their extent. Fraud may well be rare among bank people, but endemic in its projects. Many invite bids for a contract to build a road, say, or provide tractors. The bank stumps up the cash, but the borrowing government picks the winner. In a paper published in 2005, Nathaniel Hobbs, a political scientist, shows how bids were routinely rigged. His sources had handled about 90 bank contracts, worth $90m in total, for firms in over 20 countries. In every contract, one source said, local officials sought a kick-back, typically of 10-15%."