Friday, April 27, 2007

Anti-graft experts warn Wolfowitz

Anti-graft experts warn Wolfowitz
By Krishna Guha in Washington
Copyright The Financial Times Limited 2007
Published: April 27 2007 00:35 | Last updated: April 27 2007 00:35

The crisis over Paul Wolfowitz’s leadership of the World Bank is destroying the bank’s credibility on governance and anti-corruption, virtually the entire team of bank managers working on these issues said on Thursday.

The warning came in a ­letter to Mr Wolfowitz and the bank’s board of directors from 46 senior bank officials, including Daniel Kaufmann, one of the world’s leading governance experts, and Sanjay Pradhan, director of the bank’s public sector governance board.

“The credibility of our front line staff is eroding in the face of legitimate questions from our clients about the bank’s ability to practise what it preaches on governance. In these circumstances, we cannot credibly implement the governance and anti-corruption strategy,” they wrote.

They stopped short of explicitly calling for Mr ­Wolfowitz’s resignation, but demanded that the bank’s governance standards be “upheld and enforced impartially...even when they touch the highest levels of this institution”.

Mr Wolfowitz is under pressure to step down over revelations that he arranged for a large pay rise for his girlfriend, a bank official, as part of a secondment.

Anti-corruption policies have been a priority for Mr Wolfowitz and many of those who signed the letter have championed them against sceptics within the bank.

The signatories include virtually all the career officials who drafted the bank’s contentious governance and anti-corruption strategy.

They said: “We believe that the governance and anti-corruption strategy is an essential part of the bank’s overall mission to reduce poverty.”

But they warned that “to implement the governance and anti-corruption strategy effectively, the bank needs to be recognised by all stakeholders as an institution maintaining the highest standards of integrity and governance”.

One bank official told the Financial Times that this meant not just getting rid of Mr Wolfowitz but also revamping weak governance arrangements at board level.

The letter referred to “reports from field offices of concrete cases where the bank’s policy dialogue and operational work on governance and anti-corruption are being undermined”.

No specific cases were listed in the letter but two bank officials told the FT that a bank staffer in Aceh, Indonesia, was mocked when he raised concerns about the use of rural housing funds. In another, two officials said, a staffer was asked by a policeman in the Democratic Republic of Congo whether reports about the president’s girlfriend’s pay were true.

Other officials said they were not being taken seriously by developing country governments when they raised governance issues.

Mr Wolfowitz’s spokesman could not immediately be reached for comment.

The letter came as the bank’s board and Mr Wolfowitz and his lawyer sparred over how and when he would testify before an investigating panel.


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