The Wall Street Journal-20080114-World Bank Probe Finds Fraud
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World Bank Probe Finds Fraud
WASHINGTON -- The World Bank announced it has uncovered "serious incidents of fraud and corruption" in $570 million of health projects it has funded in India.
An internal review launched in 2006 turned up wrongdoing in five projects dating as far back as 1997, including efforts to curb malaria, AIDS and tuberculosis, the bank said Friday.
"The probe has revealed unacceptable indicators of fraud and corruption," World Bank President Robert Zoellick said. "The government of India and the World Bank are committed to getting to the bottom of how these problems occurred."
Investigators haven't yet concluded whether the corruption involves World Bank staff members, Indian government officials or other parties, such as companies bidding on contracts to supply drugs or other material for the health projects. The World Bank, owned by 185 member governments, provides loans and grants to developing nations.
The report comes after a 2005 investigation that found corruption by two Indian drug firms involved in implementing a bank-funded child- and reproductive-health project in India.
Those initial corruption findings led the bank's then-president, Paul Wolfowitz, to suspend health loans to India until it addressed concerns about procurement procedures. Mr. Wolfowitz's move created a stir at the bank.
Mr. Zoellick gave no indication that the new findings would lead him to slow lending to India. But he said outside reviewers will examine the bank's own anticorruption efforts and that the bank will address its staff's failures in project design, supervision and evaluation.
