Today the Wall Street Journal details the corruption in five World Bank projects in India which former bank President Wolfowitz suspended and which anti-corruption chief Folsom has exposed to the Bank Board, to the enmity of the Bank members and staff who want to continue business as usual. [N]othing we've seen so far can compare to what has now been uncovered about five health projects in India, involving $569 million in loans. The projects were the subject of a "Detailed Implementation Review," a lengthy forensic examination undertaken by Ms. Folsom's Department of Institutional Integrity, known within the bank as INT. As of this writing the bank has not publicly released the review, though it's been shared with the bank's board. But we've seen a copy and are posting its executive summary on wsj.com/opinion and OpinionJournal.com (click here to see it). We are also posting photographs that show the real price that corruption in bank projects exacts on the poor. Here are some of the lowlights:
- In the $54 million "Food and Drug Capacity Building Project," for which money is still being disbursed, the INT found "questionable procurement practices, some of which indicate fraud and corruption, in contracts representing 87 percent of the number of pieces and 88 percent of the total value of equipment procured." That is nearly $9 of every $10 in aid funds[snip]
The report goes on in this vein for hundreds of pages. With the exception of Paul Volcker's investigation of the U.N. Oil for Food scandal, we can think of no comparable review of an international organization that has brought such damaging facts to light, certainly not one that was internally conducted.
The Journal is right. This is a disgrace as is President Zoellick's failure to anywhere credit Ms. Folsom for her outstanding work in exposing the failures of these programs.