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In order to help promote accountability at the World Bank, GAP monitors the Bank’s lending and corporate practices closely by providing safe haven for World Bank whistleblowers. The Bank, like other international institutions, enjoys immunity from national laws as it pursues its goal of sustainable development in poor and middle-income countries. As a result, the Bank typically cannot be sued by its staff, and if subjected to retaliation after reporting corruption, fraud or misconduct, a whistleblower is without fundamental protection. Accountability at the Bank requires freedom of speech for staff members, without fear of reprisal. Without effective protection for those who report corruption and fraud, funds may be diverted and project goals ignored.
In 2008, the World Bank adopted Staff Rule 8.02: “Protections and Procedures for Reporting Misconduct.” The new rule represents an improvement over pre-existing rules and protections for whistleblowers, but problems remain. Since the adoption of the whistleblower protection policy, GAP has monitored the application and shortcomings of the measure and represents clients who have sought to shield themselves from reprisal by claiming protection.
After more than a decade of anti-corruption work, in 2009, the World Bank’s Independent Evaluation Group (IEG) released an unprecedented 700-page evaluation that found a “material weakness” in the internal controls at the International Development Association (IDA) – the arm of the Bank which provides assistance to low-income countries. The finding, which represents the most serious level of accounting flaws, indicates that a material misstatement of the financial status of IDA could occur. Thus, the likelihood of the loss of Bank resources through collusion, over-pricing, under-delivery, and bribery may be high.
GAP represents whistleblowers from the World Bank when their claims suggest that the institution has violated the public trust and operated in a manner contrary to the public interest. Allegations of corruption, fraud, discrimination in hiring, lack of due process and abuse of authority, have been examined and reported by GAP. We have also been prominently involved in exposing several ongoing or past scandals at the World Bank. These include:
- The Paul Wolfowitz Scandal: GAP received the whistleblower disclosure at the center of the infamous 2007 scandal that resulted in the president's resignation.
- Ongoing problems at the World Bank’s Integrity Vice Presidency (INT), which is responsible for the investigation of internal and external allegations of misconduct and fraud.
- Satyam & Cyber-security: In 2008, the Bank’s chief vendor for cyber-security, Satyam Computer Services of India, came under scrutiny as the IT system the company had designed appeared vulnerable. The facts that emerged about the scandal subsequently included a massive accounting fraud, an ineffective World Bank response to the emergency, and persistent questions about the integrity of the Bank and its actions. Satyam collapsed under the weight of the fraud in January 2009, and is now known as “India’s Enron.”
- The Cover-up of the Spread of HIV in India: In 2008, GAP client Dr. Kunal Saha came forward with evidence that World Bank funds had been used for years to purchase defective test kits designed to detect the presence of HIV/AIDS in blood samples. The kits, which had been procured by the Indian government and distributed to hospitals and blood banks across the country, gave ‘false negative’ readings at an alarmingly high rate. As a consequence, HIV-contaminated blood would appear to be ‘clean’ and suitable for distribution. After Dr. Saha reported these findings to the investigative unit at the World Bank, he faced a coordinated attempt to defame him and undermine his efforts to safeguard the Indian public.
GAP’s International Program has also released several reports based on whistleblower disclosures. These include:
- How the World Bank’s Peer Review Services Deny Staff the Right to a Fair Hearing (August 2011): This report evaluates recent reforms to the Bank’s Peer Review Services, the lower level of the internal justice system used by Bank whistleblowers and staff to challenge violations of their rights. The report finds that the Bank has created a deficient justice system that fails to comply with international human right standards and with recommendations made by experts who previously reviewed the system. Possible solutions to address these shortcomings are proposed.
- Lack of Security for World Bank Staff and Consultants (March 2010): This report documents the lack of security for World Bank staff and consultants, based on the experience of an International Finance Corporation (IFC) employee. In brief, the Bank is increasingly placing its employees in the line of fire without providing adequate safety protection and then, when accidents happen, evading responsibility for caring for injured personnel.
- Review of the Department of Institutional Integrity at the World Bank (September 2007): Reviews the World Bank's Department of Institutional Integrity (INT) and its practices from 2005-2007 and documents several immediate and long-term problems at INT.
- Racial Discrimination at the World Bank (June 2009): An investigation that documents evidence of racial discrimination against black professional grade employees at the World Bank. The report, which documents the treatment of these employees in recruitment, retention and internal judicial decisions, finds that a race ceiling exists at the institution, and that the Bank’s legal system fails to address racial discrimination adequately. (Annexes)
- Privatization & Corruption - The World Bank and Azerbaijan (August 2008): An exposé of the World Bank’s role in the widespread corruption surrounding privatization in Azerbaijan during the late 1990’s. The report shows that James Wolfensohn, then president of the World Bank, personally assisted a rogue financier in his (ultimately unsuccessful) efforts to gain control of the State Oil Company of the Republic of Azerbaijan (SOCAR).
- Plundering the Yerevan Water Utility (August 2008): An examination of allegations of corruption in the World Bank-funded Municipal Development Project (MDP) in Yerevan, Armenia. A whistleblower with access to internal documents about the MDP produced evidence showing that the General Director of the Yerevan Water and Sewerage Company (YWSC) in the capital and the international representative of the Italian company contracted to manage and modernize the YWSC were the same person. As a result of this conflict of interest, project objectives were changed without authorization, substandard materials were used, performance standards were lowered, and works to be completed were never undertaken, among other things.