The Wall Street Journal-20080118-World Bank Purge
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World Bank Purge
The World Bank on Wednesday announced the resignation of Suzanne Rich Folsom as director of its anticorruption unit, or INT. "She was not forced out, she was not asked to leave," said external relations chief Marwan Muasher. That's one way of putting it.
Ms. Folsom is, in fact, leaving the bank of her own accord for a private-sector job, having recently completed a devastating report on $569 million worth of corrupted bank projects in India. But this is a story of a resignation by a thousand cuts. Along with her top deputies, Glenn Ware and Allison Brigati, Ms. Folsom departs having survived years of relentless vilification by a bank staff and even senior leadership determined to undermine her anticorruption efforts.
In recent months alone, bank bureaucrats sought to put Ms. Folsom on administrative leave and curtail the INT's mandate. Failing that, they colluded with an unofficial "review" of the INT, intended to force Ms. Folsom out, by a left-wing shakedown operation called the Government Accountability Project. That failed too. Then in December, they seized on an anonymous email against Ms. Folsom to launch an inquiry into whether, for example, her department was too severe in its performance reviews of junior employees and similar "managerial" transgressions.
All of this might seem farcical were the stakes not so high. If the India report and others we've disclosed are anything to go by, at least some of these loans will go to projects in which nine of 10 dollars are either squandered or stolen by corrupt officials and middlemen, and where filthy, half-built hospitals are certified as completed to project specifications. That ought to matter to a "bank" that purports to have the interests of the world's poor at heart and whose annual lending portfolio tops $30 billion.
Yet rather than seek to better monitor their own projects for signs of fraud, bank officials have repeatedly colluded with aid recipients to hush up corruption findings and continue to lend to miscreant governments. An official review of the INT last year by former Federal Reserve Chairman Paul Volcker explained the dynamic: "There is a natural discomfort among some line staff, who are generally encouraged by the pay and performance evaluation system to make loans for promising projects, to have those projects investigated ex post, exposed as rife with corruption, creating an awkward problem in relations with borrowing clients."
In his review, Mr. Volcker gave "high marks" to Ms. Folsom and her team and urged that INT be "nurtured and maintained as an exemplary investigative organization." Instead, the INT has now been gutted with the departure of Ms. Folsom and her top aides. President Robert Zoellick has appointed an interim chief and the bank promises a search for a capable successor. But that search will be all the harder because Mr. Zoellick failed to provide Ms. Folsom with covering fire in recent months, refusing even to acknowledge her by name in last Friday's self-congratulatory press release on the India report.
That press release promised a list of actions to fight corruption in India, including "enhanced transparency" and "community score cards." These are essentially the same promises the bank always makes when its projects are exposed as corrupt, usually to zero effect. Speaking of transparency, we're pleased the bank has finally seen fit to release the India report, albeit in a link buried in its Web site. Some in the press reported yesterday that the bank had released it last Friday. That's false. The India report became public only after we obtained a copy and posted the executive summary on our Web site on Monday.
Mr. Zoellick has also pledged that the Volcker report on INT "points the way towards what has to be done." He would have more credibility on this score had he not permitted his own bureaucracy to blow up the INT, thereby sending the message that whoever seeks to lead the anticorruption office will be treated like an alien invader who must be purged if he does his job.
Mr. Zoellick would also have more credibility if bank employees see that the officials responsible for the Indian and other corruption debacles are held accountable. That includes Praful Patel, who has been running the bank's South Asia operations since 2003; Managing Director Graeme Wheeler, who until recently oversaw Mr. Patel's work; and James Adams, the vice president for East Asia who gave a pass to corrupted projects in Cambodia and the Philippines.
At least Ms. Folsom, Ms. Brigati and Mr. Ware leave the World Bank with their honor intact.
