Senators Lugar & Leahy Win “Best Practices” Mandate for Banks
(Washington, DC) – The Government Accountability Project (GAP) today praised breakthroughs in whistleblower protection included as part of greater accountability and transparency standards signed into law Monday, November 14. The reforms are included in the FY06 Foreign Operations appropriations bill for multilateral development banks (MDBs) such as the World Bank. The new policies echo provisions of legislation by Senate Foreign Relations Committee Chairman Dick Lugar (R-In.). A bi-partisan team headed by Senator Patrick Leahy’s staff championed the appropriations victory.
The legislation sets policy for U.S. Executive Directors at MDBs, whose votes are of great importance as the largest or second-largest stakeholder in each institution. The whistleblower provisions were an unqualified victory for reform advocates. Mandated transparency reforms protecting free expression and access to information include:
  • Protection for employees and “affected persons” to publicly bear witness against wrongdoing.
  • Free speech rights for all relevant parties to challenge any misconduct threatening a bank’s public service mission, elevating the bar beyond institutional self-interest.
  • Modern, fair, legal burdens of proof to govern whether reprisal victims win their cases.
  • Access to independent, external adjudicative parties or forums for alternative dispute resolution – those bearing the power to hold those who retaliate accountable.
  • Cancellation of all direct and indirect consequences of reprisal when whistleblowers win, such as lost income, responsibilities and threats to residency.

GAP International Program Director Melanie Beth Oliviero gave the measure qualified praise, stating “These new policy commitments are a signal that the United States is prepared to lead other governments to similarly endorse protections for whistleblowers serving the public interest. Now the challenge begins: Convincing the banks to honestly implement this paper victory.”

GAP Legal Director Tom Devine noted, “The current MDB policies are little more than institutionalized gag orders routinely used to fire whistleblowers. Congress has mandated state-of-the-art whistleblower protection. If implemented, they will be a transparency revolution at institutions where corruption has been as much a tradition as secrecy. ”

Other reforms include financial conflict of interest disclosures, publication of loan terms, tighter procurement controls, debarment as accountability for violating anti-corruption rules, and reinforcement of internal watchdog units as well as inspection panels for those aggrieved by the activities.

The legislated reforms reflect the recommendations by GAP and other organizations in last year’s Ford foundation-financed studies of MDB whistleblower policies: Challenging the Culture of Secrecy. They also mirror the “best practices” cornerstones for whistleblower protection approved by the Organization of American States in 2000 after it commissioned GAP’s Devine and American University Law Professors Robert Vaughn and Keith Henderson to draft model law approved to implement the Inter-American Convention Against Corruption. This spring Vaughn completed a still-unreleased internal report for the World Bank recommending an analogous overhaul for its whistleblower program.

The five MDBs are the World Bank, African Development Bank, Asian Bank, European Bank for Reconstruction and Development, and Inter-American Bank. GAP’s International Reform program is committed to advocating for stronger whistleblower protections at MDBs and other international bodies. GAP has led the campaigns for passage of nearly all U.S. national whistleblower laws, and has been relentlessly pushing for international freedom of expression to be a cornerstone of globalization.