The World Bank Featuring
Suzanne Folsom, Counselor to the President and Director of the Bank’s Integrity Department, answered your questions about how the Bank responds to allegations of corruption in its projects, as well as how the institution deals with complaints regarding possible staff misconduct.
I joined the Bank at the request of former President Jim Wolfensohn, who asked me to be a Counselor to the President. I accepted the President’s request because I know first-hand, from my work with the UN and the time I spent in the developing world – including a great deal of time in the beginning of my career in Africa as well as a fair amount of time in the Middle East – that an organization like the Bank can make a big difference.
Having been on dozens of delegations for my own government, I also learned that the key to making that difference is partnership. In the past, that’s something the Bank wasn’t as good at as we could have been, but I think we’re better than ever – and we keep working on it.
Rather than saying the Bank is supporting developing countries, I like to think we’re helping those countries help themselves. The countries are in the drivers’ seat.
As for conditionalities, that’s something that the Bank and its partners are always trying to improve. It’s not my area, but I do think – from where I sit – that conditions designed to make sure the money goes where it belongs are a good thing.
Taking an example of Funding for Forestry Projects what is your estimate of loss to the project by way of corruption / fraud ?
But one big finding from our investigations is that those schemes that the corrupt actors come up with are really quite similar across the world – in any country, anywhere. Corruption is corruption. This finding is helping us to design common risk mitigations Bank-wide.
Is this happening because of shortcomings in our education systems?
Can we impart the much needed wisdom systematically as a subject to develop an impersonal vision in people?
But education about the problem on a global level is important. That’s why I’m here today.
a How aws the audit and ambit of the inveastigations carried out
b On wahr basis did teh areas of corrupion cover did it check total funds apllication against total disbusrement , if not how did it arriev at its overview that has been given
Dis it audit the projects i.e check standard of work total goods procured and applied and total costs.
Did it check those suspected of corrupion and receiving fees and their bank accounts , did tehy check large muti or reduced withdrawal of money where it was given and why.
Having recently completed considerable work and given a formulae for Ghana o use indigenous assets linked with Financial acumen and audited with an independent body conducting reporst I really cannot accept that the inveastigations coudl have been carried out in all areas of recipt of total funds and their overall appliaction in monies expended on Projects although until I receive a reply to the areas targeted and requested I am unable to formulate an overview of the investigations carried.
All i see is the projects are sometimse never completed due to the funding running out or disappearing .
Perhaps if a separate body controlled the funsd in Trust and set up an auditing programme and costings and Bankign surviellance of the money then we may see the poverty reduced and the cildren of Africa have a better life style
How we specifically conduct a single investigation is based on the nature of the allegation – but let’s remember: these aren’t criminal investigations, they’re administrative. We don’t have law enforcement powers here in INT. We just conduct fact-finding, through a combination of document review, witness interviews, forensic accounting, as well as other standard investigative tools. We then turn the facts we find over to others for their decisions.
Your suggestions seem to look toward changing the way the Bank does business, and I can’t begin to address that – it’s above my pay grade.
As for “checking” the corruption of specific ministers – that’s outside our mandate. If we do receive allegations regarding a minister involved in one of our Bank projects, we will refer that information to the Government for criminal investigation – again, our investigations aren’t law enforcement, they’re administrative.
How can you be both a counselor to the World Bank President and Director of the Bank’s Integrity Department – are those two positions inherently in conflict, as on the one hand you’re scrutinizing the Bank and yet you’re counselor to the Bank’s President??
As per INT’s board-approved Terms of Reference, the head of the department reports directly to the President – just like a Counselor does. Since the President isn’t staff, INT has no ‘jurisdiction,’ for lack of a better term, over him. I’m an ethics lawyer, and have done quite a bit of work on Conflicts of Interest – my titles pose no such conflict.
I should add, incidentally, that being Counselor to the President – the title, I mean – is actually important externally, in this line of work. When you’re meeting with Ministers and cabinet-level officials, you carry a bit more weight if your title shows you have the ear of the President. This is a hierarchical world (and Bank) – access matters, especially for women.
Second, we have a quarterly briefing to the Audit Committee of the Board – we have a dotted-line reporting to the shareholders themselves.
Another measure we’ve taken in the past year or so is to require everyone in INT to sign a strict confidentiality agreement, which calls for termination from the Bank if anyone discloses unauthorized information outside the institution. We’re trying to hold ourselves to a higher standard.
Finally, I have to say that we only hire the most dedicated professionals – people who have spent their entire careers in the front-lines in the fight against corruption. We have seasoned fraud investigators, white-collar crime prosecutors, criminologists, labor and ethics lawyers, and forensic accountants, all of whom have made it their life’s work to take on corruption. It’s a great department – I’m proud to be a part of it.
The Bank has sanctioned 338 firms and individuals – and let me tell you, the firms put up a fight, because they know that losing that business, combined with having your name on a list saying, “this company was corrupt,” is a very hard thing to swallow. But it’s the right thing for the Bank to do. You’re absolutely right: prevention is much better than finding out afterwards that money went into someone’s pocket.
We’re often asked why we don’t publicly name Bank staff who are terminated for fraud and corruption as well. The Bank’s rules don’t allow such disclosures….
My department is also responsible for investigating other types of misconduct, such as harassment or discrimination. I should note, though, that the number of serious allegations involving Bank staff amount to less than 1% of our total workforce at any given time.
It’s still a struggle, though, to be honest. There are still a small number who don’t value the work of this department. But I think we’re making progress.
There’s a great quote from Adam Smith in “The Wealth of Nations” that my department is fond of citing: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
As far as results, we’ve seen 26 criminal convictions around the world as a result of INT referrals. That may not sound like a lot, but it’s a young department, and we’re seeing some encouraging trends emerging.
” many countrys taking loan from world bank. But this loans was not spending properley?, that projects was taking very long time, with in the time the governments of that consern states was changing very fastley, but projects was not compleating in time why?
And do you ascribe to the contention that, politicians in Tanzania, from the second face government to present, have failed to tuckle corruption?
Several NGOs were create by politians just to get the money that goes to Brasil, Civil Society don’t have any participation at all! Everything is stage!!
This is still occuring in Addis as we speak and I know that the World Bank is aware of the of this fact. What do propose to do about this? I also need the Ehtiopian Adminstrator from the World Bank so I can present my evidence in detail. Thank you
We are suppliers of Medical Products from India and have been supplying these products for World Bank Projects through Tenders awarded to different Organisations. One of such Organisations, has committed some Fraud with us and we would like to have your views on how to bring it to your notice and what help we can get from World Bank on this.
It’s particularly hard to recruit people from developing countries, because the people fighting corruption in their own countries are usually very dedicated to that fight and don’t want to leave. I respect that position, but it makes it more difficult for us to attract their talent. We’re trying, though.
I believe we’re over time. Thanks for all the questions – sorry I couldn’t answer them all.
Thank you all for taking part in the discussion. For more information on the Department of Institutional Integrity and its work, please visit: www.worldbank.org/integrity