(Washington, D.C.) – The Government Accountability Project (GAP) announced today that it believes two new World Bank programs will, together, penalize the victims of corruption while allowing guilty parties to escape real sanction. The new Bank policies do not address the Bank’s own role in stopping the spread of corruption, and they compare poorly to the more serious U.N. Convention against Corruption, ratified last week by the U.S. Senate.
Last Friday, September 15, the Senate Foreign Relations Committee approved the U.N. Convention against Corruption, which places a strong emphasis on the recovery of assets already stolen. In contrast to the U.N. policy, the Voluntary Disclosure Program (VDP), adopted six weeks earlier by the World Bank, allows corporations guilty of corruption to escape debarment from Bank operations, as well as avoid public exposure, if they confidentially reveal past wrongdoing to Bank officials.
When the Bank approved its Anti-Corruption Strategy (ACS) on September 18, it missed the target once again. Although the ACS does not impose real economic pain on corrupt enterprises, it allows the suspension of entire loans, including those that finance social programs for the poor.
“These programs allow the World Bank to keep its mistakes secret,” stated Bea Edwards, GAP International Program Director. “The real problem is that the World Bank, because of its blind preference for the private sector in all of its operations, actively promotes policies that encourage corruption, such as the privatization of public services and deregulation.”
Neither the ACS nor the VDP show any intention to change this. On the contrary, the ACS refers to national regulation repeatedly as ‘red tape.’
A comparison of the World Bank’s VDP and ACS with the U.N. Anti-Corruption Convention reveals the delicacy with which the Bank treats its corporate allies and the more impartial treatment given these same parties by the United Nations for similar transgressions. While the U.N. Convention devotes a chapter to prevention, it also addresses asset recovery and accountability. Restitution is cited as an essential principle of the Convention, recognizing that millions of citizens are poor because their national wealth and resources have been plundered. Under the Convention signers must facilitate the recovery of property or funds deemed stolen public assets by another country.
Under the World Bank’s VDP and ACS, guilty private enterprises and individuals are subject only to a three-year confidential monitoring program and an investigation that they design and fund themselves. The cost of these measures is assuredly minimal compared to the returns from bribery, tax evasion and the theft of public assets.
The World Bank argues that it is not positioned to recover stolen assets from corrupt officials and corporations. But the Bank is in a position to write off loans that did not produce the promised benefits and instead facilitated the stripping of public assets by well-connected private enterprises.
A side-by-side contrast between the approaches of United Nations and the Bank to corruption shows the relative even-handedness of the U.N. perspective and, ironically, the greater contribution that its strategy will have to poverty eradication and development. While the Bank cites “fighting poverty” as its mission, its solution to corruption does not include even an attempt to relieve poor people in poor nations of the debt they owe the Bank itself for the poorly-conceived and badly monitored loans that allowed private interests to steal their national wealth.
Contact: Bea Edwards, International Program Director
Phone: 202.408.0034 ext. 155
Contact: Dylan Blaylock, Communications Director
Phone: 202.408.0034 ext. 137, cell 202.236.3733
Government Accountability Project
The Government Accountability Project is the nation’s leading whistleblower protection organization. Through litigating whistleblower cases, publicizing concerns and developing legal reforms, GAP’s mission is to protect the public interest by promoting government and corporate accountability. Founded in 1977, GAP is a non-profit, non-partisan advocacy organization with offices in Washington, D.C. and Seattle, WA.