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Fighting Corruption: Making Development Work

Leonard McCarthy's picture

 


The World Bank has a clear vision:  A world free of poverty.  When integrity prevails, projects deliver and the poor benefit.  When they fail, development is set back and the poor suffer. That‘s why at the World Bank, we take the position that Rule of Law equals Development.  In the Bank’s pursuit of results, openness and accountability, we assert integrity in our operations, without reservation.  At the heart of our strategy is a commitment to remove the conditions that dent international security and make corruption flourish.

And our results show.  We completed 117 investigations in FY10, with 45 debarments of firms and individuals for engaging in wrongdoing. Our investigative findings have been referred to the relevant authorities, including governments, to correct, pursue, investigate and report back. Hundreds of sanctions applications have been brought before our sanctions tribunals. 

Companies fear debarment because it taints their reputation and deprives them of business.  We also meet those defendants who are in a confessing state of mind, through our Voluntary Disclosure Program, provided they are honest and the outcome is equitable. 

The World Bank is also shifting the corporate temperature, by entering into settlements with companies who adopt a pragmatic approach by admitting wrongdoing, accepting punishment and undertaking to clean up their business. These settlement agreements in Siemens, Macmillian Ltd., and Lotti speak for themselves: they all included a significant period of debarment and one included a significant payment of restitution.

Public sanctioning is a critical tool in deterring corruption. The Bank has been a lead force, pushing for the adoption of the Cross Debarment Accord, and urging other leading international financial institutions to expand and harmonize the efforts to combat corruption.  Through our work in the last 2 years, we have assisted the Bank in preserving hundreds of thousands of dollars through suspended disbursement; securing significant returns in repayments, in addition to the $100m settlement with Siemens and the $350,000 restitution payment by Lotti.

Topical as the subject is, corruption hunters committed to hunt for and forfeit what belongs to their people, will find a strong ally in the World Bank’s Stolen Asset Recovery (StAR) initiative.  As its name suggests, StAR focuses on the recovery of stolen assets by freezing, preserving and returning ill-gotten gains.  Money is a great equalizer. If the unjustly-enriched are deprived, our world seems a fairer place.

Within African lore there is this maxim:  “Do not follow the path.  Go where there is no path; to begin the trail.”  That’s why Bank President Robert Zoellick convened an alliance of 286 law enforcement officials last December.  And why today, as part of the Bank-IMF Spring Meetings, we are engaging with six of the world’s top law enforcement officials about how to change societies through resilient investigations and hard prosecutions.  We do this because for us, effective law enforcement is central to development.

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Comments

Submitted by Ram on
Great indeed to find such a move from World Bank. Project spendings that run into $billions go waste in each and every development plan just owing to the greed and corruption of a few people. The Indian public recently have raised their stern voice against ongoing high level corruption by the political system. Your step is highly admired in the global context to reach the genuine benefits to the poor.

Submitted by Myron Duncan Bu... on
It was and remains a positive move on the part of the World Bank to elevate its fight against corruption and anti-money laundering to the status of vice presidency. More importantly is its decision to appoint someone with an appetite to fight this societal evil and who has an unquestionable integrity such Adv. Leonard McCarthy to lead its Integrity Vice-Presidency. We as society need to support this effort by actively participating in the eradication of corruption. We must ensure that development takes place for the improvement of the living conditions of poor. We need to actively advocate the need to close the economic gap between rich and poor, to bring about an based on human dignity and integrity where business is contracted honestly and legally. Governments need to actively pursue and prosecute those guilty of corruption and the misuse of international funds intended to benefit those most in need of, namely the poor.

Submitted by Leonardo Liebhard on
To publish the extensive information we possess on a concrete case of fraud and corruption, in which the higher responsible for the public administration of a certain argentinean province are involved, under the current conditions of insecurity in which we are, would be dangerous for our physical integrity and that of the members of our family. We want to know how to proceed to avoid fatal consequences for mentioned people, since we cannot trust neither in the police forces, neither in the justice by no means in the organisms of security of the state. We would need some type of international external support to be able to communicate, with all the available details, the results of a non professional investigation on facts belonging to the enormous system of the prevailing corruption in the mentioned province, in which national funds are involved, partly coming from credits granted to the argentinean national state by diverse international institutes in the past. We appreciate very much your kind answer.

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