Fraud tops list of cases handled by World Bank’s sanctions office – report

by Stella Dawson | | Thomson Reuters Foundation
Thursday, 26 June 2014 17:42 GMT

A man walks past an exchange bureau advertisement showing images of the U.S dollar, in Cairo March 10, 2014. REUTERS/Amr Abdallah Dalsh

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Only 14 pct of cases and settlement handled by office were corruption

LONDON (Thomson Reuters Foundation) – The bulk of anti-corruption cases handled by the World Bank’s sanctions office over the past six years were for fraud, led by the forging of documents to win development contracts, a new report shows. 

From fiscal year 2008 through 2013, 224 firms and individuals were punished by the Office of Suspension and Debarment for fraud, bribery or corruption on World Bank contracts, the office said in releasing data for the first time on its caseload. 

While big corruption cases such as the $2.9 billion Padma Bridge project in Bangladesh capture headlines, corruption represented only 14 percent of the caseload sent by investigators in the World Bank’s Integrity (INT) division to the sanctions office.   

Eighty-six percent of cases were fraud, it said. Fraudulent invoices, forged bank and securities documents, and lying about experience and ability to deliver on projects were the most common types of offences that led to sanctions, the report said. 

World Bank President Jim Yong Kim said issuing the data is part of the development bank’s effort to improve transparency and build a more efficient and effective anti-corruption system. 

“This same information will inform and empower citizens to advocate for greater integrity and accountability in the use of public funds, no matter their source,” Kim said in an introduction to the report. 

Most of the punishments meted out to companies or individuals mean that they are banned from receiving World Bank-financed contracts from governments.  They also are cross-debarred from other development banks. 

Lucinda Low, lawyer at Steptoe and Johnson who specialises in foreign bribery cases, said it is not surprising that most of the cases were for fraud.  It is an easier crime to prove than grand corruption. She said she would like to know whether the 38 percent of cases that get sent back to investigators for insufficient evidence are the more complex ones such as corruption cases. 

Transparency International, the leading civil society organisation that combats corruption, welcomed the report and called on the World Bank to devote more resources to its fight against graft.   

“The World Bank’s sanctions process is critical to eradicate fraud, corruption and collusion from the projects it finances,” said Huguette Labelle, chair of Transparency International, in a press release.

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