World Bank President: Review of institutional integrity: sudden progress, certain doubts. (Update).

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Review of institutional integrity: sudden progress, certain doubts. (Update). In February this year concerns about the functioning of the Bank's Department of Institutional Integrity (INT) provoked the Bank's president and board to establish an external review. Little has been seen or heard of this since, but an announcement late yesterday gave further details of timing and process. But GAP has accused the report chair of having a conflict of interest that should prevent him taking on this role and Bank staff have also raised complaints.

Wolfowitz announced the review to staff in a 16 February memo: "The Board of Executive Directors and I have agreed to convene an independent panel of experts to assess how INT can best contribute to the Bank Group's mission. While a challenging assignment, we agreed that a comprehensive review of INT's activities could provide guidance on striking the right balance between safeguarding the Bank Group from legal, fiduciary, and other risks while also ensuring that INT's work serves the interests of our staff and partners".

He continued that "Mr. Paul Volcker has agreed to lead this panel. Considered one of the most eminent Chairman in the history of the US Federal Reserve, Mr. Volcker is distinguished by his passion and deep commitment to public service. He is also known for his careful and effective leadership of the UN oil-for-food investigation, in which he demonstrated his capacity to manage a review involving a large, complex international organization with significant diplomatic sensitivities and the competing interests of multiple stakeholders".

Not all stakeholders seem convinced, though. One correspondent today has already pointed out some potential conflicts of interest relating to this review itself. The issue was pointed out in a 2 March release by the Government Accountability Project. According to GAP, "Volcker's professional connections are too close to ex-INT staff, who are currently employed by a firm with a questionable tie to INT. Subsequently, the agency claims that Volcker should not qualify as an independent evaluator". The firm in question is Diligence LLC and the person in question is Glenn Ware, a senior adviser in the Bank's Department of Institutional Integrity. The GAP website has the full story.

Commenting on the Wolfowitz Resign blog Bank staff welcome Mr. Volcker's update but find the timing curious. They also accuse Mr. Volcker of being "less than zealous in moving forward with his independent review" and cast doubts about the fact that "his independent panel members appear to work for Ms. Palacio, the Bank's Chief Counsel". (My correspondent this morning says this is a 'red herring', probably due to their short-term employment contracts for this review).

Their last gripe - which is amazing - is that no relevant Bank staff have yet been consulted by Volcker or his staff. Even the Bank's Staff Association has so far had their requests (since February) for a meeting knocked back. Volcker's memo of yesterday does, however, invite interested Bank staff to put in requests for meetings before 10 May.

It is not clear whether Volcker and his team will examine how the head of the Institutional Integrity is hired and whether the current incumbent has proved too close to key US politicians to be able to exercise sufficient judgement when sensitive cases are brought before her. Here at www.worldbankpresident.org we are hearing convincing reports that some key figures in the Bank seem to be protected to the extent that complaints to INT yield nothing. And, as hinted yesterday, we are not just talking about the Riza affair.

In February Wolfowitz promised results of this work by July, but Volcker yesterday announced that he now plans to report "not later than 15 September 2007". That will be too late to be relevant for the current saga but hopefully with important lessons to avoid such problems in future.

The review panel

The people announced yesterday as panel members are the following:
- Mr. Gustavo Gaviria, (currently listed in the World Bank directory as working for Ana Palacio) who has worked since 1974 in the coffee and finance industries in Colombia. Mr. Gaviria is third generation in the coffee industry of Colombia and is founder and President of Industrias Aliadas S.A. and founder and chairman of Coffeecol, Inc. Mr. Gaviria is founder and President of Vision de Valores S.A. Since 2004 he has served on the Board of Ecopetrol, the largest Colombian company, where he heads the Committee on Corporate Governance. From 1999 to 2004, he was a Senior Advisor in the Executive Director's office at the World Bank.

- Mr. John Githongo, (currently listed in the World Bank directory as working for Ana Palacio), a former journalist who investigated fraud and bribery in his home country, Kenya. In 1999, he founded the Kenya chapter of Transparency International, and in 2003, President Kibaki appointed him Permanent Secretary of Governance and Ethics, a position from which he resigned in early 2005. He is currently a Senior Associate Member of St. Antony's College at Oxford University in the UK.

- Ben W. Heineman, Jr., who is a Distinguished Senior Fellow at Harvard Law School and a Senior Fellow at Harvard's Kennedy School of Government, where he is teaching and writing in the area of governance. He spent much of his early career in private practice and in government in Washington, D.C., including as law clerk to Supreme Court Justice Potter Stewart, and he now maintains an association with WilmerHale as Senior Counsel. From 1987 to 2005 he was Senior Vice President and General Counsel, and then Senior Vice President for Law & Public Affairs, for The General Electric Company where he dealt with matters directly relevant to maintaining high ethical standards in an international organization.

- Mr. Walter Van Gerven, (currently listed in the World Bank directory as working for Ana Palacio) who is a distinguished EU legal author and law professor at Leuven (Belgium) and Tilburg (the Netherlands) Universities with visiting fellowships at, a. o., Chicago, Stanford, Michigan, Paris II, and King's College London. Between 1962 and 1967 he was an associate in the Brussels office of Cleary, Gottlieb, and a founding partner in 1970 of a leading Brussels law firm which was subsequently acquired by Linklaters. From 1982 to 1988, he served as the President of the Belgian Banking Commission; from 1988 to 1994 he was Advocate-General in the European Court of Justice; and in 1999 he served as one of five members of the Committee of Independent Experts investigating allegations regarding fraud, mismanagement and nepotism in the European Commission, and formulating recommendations resulting in various reforms.

- Sir John Vereker, who is the Governor of Bermuda, an overseas territory of the United Kingdom. Briefly a staff member of the World Bank (from 1970 to 1972), he has spent most of his career in the UK government, including a three-year period in the Policy Unit of the Prime Minister's Office (from 1980 to 1983). In 1994, he became the Permanent Secretary of the UK's Overseas Development Administration and its successor the Department for International Development (DFID), a position that he held until becoming Governor in 2002.

Wolfowitz's February note said the panel will engage with civil society organizations and others outside the Bank. If you're doubtful about this or have something you want to say to these eminent reviewers now, you can find most of these peoples' contact details on the Wolfowitz Resign blog. That site also carries the full memos cited above.

Alex Wilks ~ April 24, 2007

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The Washington Post

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