HiddenMysteries: Protect Whistleblowers at World Bank

By Bea Edwards and Dylan Blaylock

Paul Wolfowitz’s resignation as president of the World Bank will mean little if that institution’s true underlying flaw is not addressed. The real problem is the lack of whistleblower protections for bank employees and the weak internal justice system that prevails.

The first indication that Mr. Wolfowitz had directed the vice president for human resources at the bank to effect salary increases and promotions for his companion in violation of bank rules, and then conceal them, surfaced more than a year ago. The Department of Institutional Integrity, which received the initial disclosure, operates under a Wolfowitz appointee who did nothing, and the ethics committee of the bank’s board was prohibited from taking direct action in personnel decisions.

Instead, action had to be taken by anonymous whistleblowers - at great personal risk. Although a whistleblower originally disclosed the corruption in January 2006, Mr. Wolfowitz was not obliged to resign until last week. When they determined that internal bank information was reaching outside organizations and the press, Mr. Wolfowitz, the Department of Institutional Integrity and the bank’s general counsel began an investigation to identify and punish the leakers.

In 2004, our organization, the Government Accountability Project, established a program to monitor whistleblower protection policies at multilateral development banks, including the World Bank. At issue were the damaging consequences of the lack of adequate protection for those who disclose fraud and corruption in bank projects, especially since the bank is not subject to national laws.

In August, GAP began working with the World Bank on a new whistleblower protection policy. The policy initially proposed by senior management was narrow in scope and ineffective in practice. GAP advised Robin Cleveland, a Wolfowitz aide, that the policy was unworkable and riddled with loopholes. Discussions then came to an abrupt halt.

In the absence of these protections, bank staff members confidentially sent us a series of disclosures evidencing misconduct by the bank president and his appointees. Some allegations involved Mr. Wolfowitz’s handling of actions in Iraq. We learned that he was negotiating a contract with a new country manager in Iraq, suggesting that he intended to expand bank-funded projects drastically in a country at war, despite the fact that the bank is prohibited from operating in a conflict zone. Later, we received word that an Iraqi consultant working for the bank had been shot and wounded in Baghdad. Senior management was slow to announce the shooting.

In March, payroll records for Mr. Wolfowitz’s companion, Shaha Ali Riza, arrived at our offices without attribution, showing the improper salary increases she received four months after Mr. Wolfowitz became bank president. The sender wrote that this information had been sent to the bank’s Department of Institutional Integrity for investigation the year before, to no effect. The allegation was later confirmed by the bank’s board of directors.

Disclosures kept coming. E-mails sent from bank staffers documented the collapse of no-interest lending to Africa. Documents showed the internal bank uproar over the inflated salaries of Mr. Wolfowitz’s closest aides. An e-mail trail revealed that a bank managing director ordered specialists to remove references to “family planning” from a strategy paper for Madagascar, a country that had urgently requested assistance with these services. The minutes of a meeting showed that the president’s office tried to weaken the bank’s stance on climate change.

At the height of the scandal, the bank offered to consult our organization again on a whistleblower protection policy, but the draft presented did not incorporate essential recommendations made almost eight months before. Thus, bank staff members still cannot openly come forward to make their cases. They cannot speak on the record to the press, or to us. If subjected to retaliation, they do not have access to legal counsel or a fair hearing in an impartial forum. If dismissed, international staff can be deported.

As the Wolfowitz debacle ends, it is worth remembering that bank staff who made disclosures about corruption remain vulnerable. Indeed, the internal hunt for “leakers” continues.

The World Bank now must establish a joint committee of internal and external governance specialists to propose reforms that truly shield staff members from retaliation. So long as staff remain unprotected and bank employees are subject to intimidation, harassment and dismissal because they try to address wrongdoing internally, real change - as the Wolfowitz case shows - will come only through a protracted public scandal.

Bea Edwards and Dylan Blaylock are, respectively, international program director and communications director for the Government Accountability Project, a whistleblower-protection organization based in Washington

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Protect Whistleblowers at World Bank

Wednesday, May 23 2007 @ 04:45 PM CDT