Even More on World Bank Security

The head of Satyam Computer Services, which has been at the center of the World Bank cyber-security mini-scandal, recently revealed that his company has been involved in a massive accounting fraud. This has caused a developing financial crisis in India.

GAP has been critical of the World Bank’s slow response in alerting other organizations about the company’s then-known problems. From the Wall Street Journal:

As early as 2006, the World Bank told the U.S. Justice Department it suspected Satyam may have been involved in bribery, according to bank officials. In February 2008, it temporarily suspended Satyam from bidding on new contracts, and then in September formally made the firm ineligible to bid on future contracts.

But it didn't announce the ban, called a debarment, until Dec. 23 -- and then only after press reports about it. "The bank should have been more responsible about reporting publicly on what they knew to be misconduct at highest levels of Satyam," said Bea Edwards, international reform director at the Government Accountability Project, a Washington, D.C., watchdog group.

This issue is a big deal for India, so much so that the Indian government is talking about a billion dollar bailout just for that company, which employs 53,000 people.

GAP will be monitoring the Satyam deal with the World Bank and trying to figure out the age-old question: What did the World Bank know, and when did it know it?

-- Dylan Blaylock