All Things Whistleblower: A GAP Blog

GAP Hosts Successful Discussion About Racial Issues at the World Bank and IDB

Last night GAP hosted a discussion at Busboys and Poets about racial issues at the World Bank and Inter-American Development Bank (IDB). There was a full house, with standing room only and more than 70 people in attendance, including representatives and employees from the IDB, World Bank (as observers), civil society and the U.S. government.

Round table participants included Bea Edwards, GAP International Program Director; Tina Tinde, Diversity Advisor at the IDB;  Andrew Morrison, Chief of Gender and Diversity Unit, IDB; Gilberto Amaya, D.C. Representative of the Central American Black Organization (CABO, ONECA);  Vince McElhinny, Manager of the Bank Information Center’s BICECA project; Joia Nuri, Chief of Staff at TransAfrica Forum; Carlos Quesada, Latin America Regional Program Director at Global Rights; Wamara Mwine, White House Correspondent for Politics in Color and author of a National Examiner report about racial discrimination at the World Bank; and Aisha Brown, Founder and CEO, Global Awareness Project Consulting.

Bea Edwards discussed the findings from GAP’s reports about discrimination at the World Bank and IDB.

Tina Tinde pointed out that many more people suffer the effects of discrimination than actually bring formal complaints about it. Ms. Tinde discussed the outcomes of IDB’s recent Leadership in Diversity Conference and initiatives that the IDB plans to take to improve its diversity, including a focus on recruiting Afro-descendants and indigenous peoples, succession planning, and launching a self-identification process in 2010 that will help the IDB set targets for improving its diversity.  

Andrew Morrison agreed with some of the findings from GAP's report including the necessity of addressing the needs of communities that suffer from racial and ethnic discrimination in country dialogues and strategies; improving the data collected by the IDB on race, ethnicity and poverty; and improving the IDB’s tracking of projects that benefit Afro-descendant and indigenous communities, including infrastructure projects. Mr. Morrison said that the Bank plans to look at the state of social exclusion in Latin America every two years.

Gilberto Amaya discussed a recent Declaration adopted in December by the General Assembly of ONECA, a network of Afro-descendant organizations from Central America that works to promote economic development and social inclusion for Afro-descendent communities. The resolution states that, having learned about GAP’s report on racial discrimination at the World Bank and IDB, the Assembly resolves to “prepare an action plan to strengthen a relationship working with these entities and make its team available to them to support the design proposals that respond to the demand for our communities in terms of capacity development and investment promotion.” ONECA challenged the Banks to have clear, measurable goals in their projects and partnerships with Afro-descendent and indigenous communities and to commit to having an external organization measure the Banks’ implementation of these goals.

Vince McElhinny said that there has been no causal association between the IDB’s lending and a reduction of inequality in Latin America and stated that the IDB is not even in the ballpark of targeting enough lending to address social inequality issues. He stated that now is the opportune time to discuss these issues, as the IDB is in negotiations for its Ninth Replenishment, in which taxpayers from donor countries will be asked to contribute significant capital resources to the IDB. He discussed the failure of the IDB in general to set targets and urged the Bank to have “less talk and more targets.” He said that if those targets are not met, someone high-up at the IDB should lose their job, a statement that received an ovation from the audience.

Joia Nuri stated that something is systemically wrong with the International Financial Institutions and their lending practices, including the conditionalities that they impose on the developing world. In that sense Ms. Nuri pointed out that more lending is not necessarily the answer to development issues. Ms. Nuri also observed that often people are afraid to complain about discrimination.

Carlos Quesada stated that discrimination is also a problem at the Organization of American States. He encouraged the IDB to join an inter-agency consultation on race and ethnicity and encouraged the International Financial Institutions to have a human rights approach to development. He also urged these organizations to apply affirmative action in the hiring process and to have a multi-professional environment that employs less economists and more people from other fields, such as human rights experts and sociologists.

Aisha Brown urged the Banks to look at discrimination against Afro-descendants particularly, rather than lumping different groups together. She urged the Banks to partner more with Afro-descendent communities. She also pointed out that there are many qualified Afro-descendents in the United States, Canada and Europe and that recruiting them should also be a priority for the development banks.

Wamara Mwine discussed his investigation into discrimination at the World Bank. He said that many World Bank employees expressed their concerns about discrimination to him, but feared coming forward publicly. He summarized an incident that he investigated at the World Bank, in which someone spray painted a racial slur and a derogatory message outside the Bank’s Legal Affairs Offices.  Mr. Mwine stressed the importance of having a system to punish those who engage in such discriminatory acts. He also urged the Bank to create a system to hire and then track the retention and promotion of African-Americans.

There was a lively question and answer session with thoughtful discussion. Among other things, participants discussed recent comments made by the President of the IDB in which he implied that the Bank would sacrifice the quality of its operations if it recruited more diverse personnel. A suggestion was made that the IDB rethink its mandate and also create a staff incentive structure that rewards employees who promote diversity in the workplace or projects. The need for a human rights based approach at the World Bank and IDB was discussed, as was the need to address the needs of Indigenous populations.

GAP encourages people who attended this event to post comments to this blog entry. 

GAP International Program Director Bea Edwards (right) addresses round table participants Aisha Brown (center), CEO of Global Awareness Project Consulting, and Wamara Mwine (right), White House Correspondent for Politics in Color.

A participant from a multilateral development bank asks a question during the question and answer session.

Discussant Wamara Mwine, White House Correspondent for Politics in Color, takes questions from the audience.

Round table participant Carlos Quesada, Latin American Regional Program Director at Global Rights, responds to a question from the audience.

Investigating Project Corruption No Longer Priority for UN

A new report has found that the United Nations (UN) has stopped investigating cases involving the possible theft or misuse of millions of dollars and scaled back on self-policing over the past year. The world body shut down the task force that had been responsible for investigating corruption since after the discovery of the oil-for-food corruption scandal last decade. Since the UN shuttered the task force, not a single noteworthy fraud or corruption case has been fully investigated and completed, compared with an average of 150 cases a year in the past.

Investigations that have not been completed include:

$1 million a day flowing out of a safe in a UN project office in Kabul - part of $850 million intended for Afghanistan's rebuilding and elections between 2002 and 2006.

Evidence that a U.S. firm padded its charges by $1 million in Afghanistan

Evidence that UN staff stole millions of dollars from Afghan elections, roads, schools and hospitals,

No action has been taken on a task force finding that about half of $350,000 in U.N. funds aimed to start a radio station for women in Baghdad was used to pay off "personal loans, a mortgage, credit card bills and taxes."

Evidence of major corruption involving more than $200 million in transportation contracts for UN peacekeeping throughout Africa. The case has since been dropped.

The UN refused to fund the task force for another year at the end of 2008, following complaints from Russia and Singapore about investigations of their citizens or companies, although the UN Board of Auditors concluded the task force acted impartially and helped to discourage fraud and corruption. Since the inception of the task force in 2006, its work has led to "at least four convictions, millions of dollars in restitution orders, misconduct findings against 17 U.N. officials and the banning of 47 U.N. contractors due to fraud, other illegality or rules violations." From the article (A.P.)

The Government Accountability Project, a Washington-based nonprofit law firm that defends whistleblowers, says the U.N. quashed the task force, buried its cases and retaliated against an investigator trying to protect some probes' computer files. "We did talk to investigators. They were concerned that investigations which were substantial and which had accumulated credible evidence of wrongdoing had not been zealously pursued since the task force was disbanded," said Bea Edwards, the firm's international program director. "It appears there was political pressure brought to bear that may have been instrumental in delaying or stopping (task force) investigations."

In another move to undercut oversight of billions of UN dollars, Michael Dudley, the acting head of the permanent investigation division, wrote in a memo that "employees of a third party" (including 6,600 contractors as well as other employees) are beyond his division's responsibility and cases involving former staff "should be reassessed to determine whether the matter should be closed without further investigation." Thus, UN staff could avoid investigation for any fraud, embezzlement or theft that they actually committed by simply quitting.

Edwards, who interviewed top U.N. officials for her whistleblower probe for the Government Accountability Project, said Dudley spoke about changing the mandate, keeping the number of investigators to a minimum and closing cases when the officials involved leave the U.N.

"He told us that he felt that if someone who was charged with misconduct had retired or left the organization, there was no point in investigating since the person was beyond sanction by the U.N.," she recalled. "He told me and my assistant that. There were two of us there. We were absolutely astonished."

Countries Skeptical of World Bank Handling Climate Funds

Developing countries and non-governmental organizations are determined to keep the administration of new climate funds for developing countries away from the World Bank because of the structure and management of the Bank's environmental fund, the Global Environment Facility (GEF). A key stipulation of the recent Copenhagen Accord provides a fund for global warming adaptation in developing countries, which is likely to be structured similarly to the GEF. However, the GEF is often criticized because of the control of donors over how money is spent, its cumbersome administration and red tape, and the alleged usage of its funds as political tools.

This skepticism of the World Bank's management capabilities is well justified, following the scandal that has unfolded involving Indian IT behemoth Satyam Computer Services (now known as Mahindra Satyam). Satyam was banned from providing services to the World Bank for eight years as a penalty for giving improper benefits to staff members at the Bank and for collecting on undocumented invoices. This banning of Satyam was also apparently never communicated to the company's board or the SEC in the US.

Click here for more information on the Satyam scandal.

UN Installs Cameras that Monitor Journalist-Whistleblower Meetings

A room that journalists in the United Nations have been moved to during a renovation has been fitted with video cameras, the footage from which can be used by that organization’s Office of Internal Oversight Services (OIOS). The OIOS investigates disclosures to journalists by UN staff to outside parties, including the press. This is a direct attempt to stifle whistleblowing disclosures by an orgaznaition that is continually hampered by waste and fraud in some of its projects.  

A day after Inner City Press first reported on the cameras (earlier this week), a U.N. spokesman told the press that the cameras would be moved. However, the cameras are still in place.

GAP Findings Reinforced by the UN High Commissioner for Human Rights

During a recent trip to Brazil, United Nations High Commissioner for Human Rights Navi Pillay noted that Afro-Brazilians and indigenous groups face serious discrimination and are “mired in poverty.”

The High Commissioner’s comments echo those made by GAP in a recently released report about discrimination against Afro-Latinos and indigenous peoples in Latin America and the failure of the Inter-American Development Bank (IDB) – the most important multilateral lender to Latin America – to address it. GAP’s report found that:

In Brazil, differences in income by race are dramatic: nearly 70 percent of the extremely poor in Brazil are Afro-Latino, and Afro-Latinos earn 44 percent less than their white counterparts. The same pattern prevails in neighboring Colombia, where 80 percent of Afro-Colombians live in conditions of extreme poverty. (p. 10)

Commissioner Pillay noted the continued marginalization of indigenous and Afro-Latino groups in Brazil. She said that most of Brazil’s indigenous people, “are not benefiting from the country’s impressive economic progress, and are being held back by discrimination and indifference, chased out of their lands and into forced labour.”

Similarly, GAP’s report found that Afro-Latinos and indigenous peoples – which together make up more than 40 percent of the population of Latin America and a majority of the region’s poor – are significantly underrepresented in IDB operations and projects designed to address poverty. Data released by the IDB show that the institution allocated a paltry 0.13 percent ($58.3 million) of its total lending and grants (approximately $45 billion) between 2001 and 2005 to projects that incorporated components benefiting Afro-Latino and indigenous communities directly.

Weak Prescription for Improved World Bank Governance

This post was written by GAP International Reform Director Beatrice Edwards for her Daily Kos Blog.

On October 20th, the High Level Commission convened to assess governance at the World Bank transmitted its report, "Repowering the World Bank for the 21st Century," to World Bank president Robert Zoellick. The report concluded (more or less verbatim) that:

• Current mechanisms for strategy formulation are not adequate for setting priorities and guiding operations;
• Mission creep is endemic, weakening accountability and increasing the risk that resources will be misallocated;
• The decision-making process is perceived as too exclusive;
• Insufficient institutional accountability for results weakens the World Bank’s effectiveness and legitimacy;
• The Bank’s resource base is insufficient.

The 'accountability' concerns of the commission, headed by former Mexican president Ernesto Zedillo, are profound. Among other things, the commissioner's wrote, the Executive Board lacks the independence necessary for effective oversight.  The appointment of the president is "opaque and excludes most of the membership."  The conduct of the Bank president is unsupervised, executive directors are not necessarily competent or qualified, and accountability functions are a patchwork of ad hoc assignments.

Unfortunately, the commission produced only superficial recommendations to address all this.  Much of the suggested improvement consists – literally – of rearranging the chairs (on the board).  Board chairs would be switched around and reduced in number.  The president of the Bank would no longer sit in the chairman’s seat.  He would also be subject to a performance review (by the board).  A council of advisors would be established to counsel the president, but its composition "would mirror that of the Board."  The methods to be used to choose council members are unspecified.

To strengthen accountability, additional reviews will be conducted, presumably by similar High-Level Commissions confronting similarly defective arrangements.

This is not serious.  In 2007, cronyism was exposed in the office of the World Bank president: Paul Wolfowitz had installed a network of overpaid and underqualified advisors with carte blanche to intervene anywhere they pleased.  As a result, they wreaked havoc.

During his tenure, Wolfowitz established a position for his romantic partner at a ‘foundation’ putatively run by the US Department of State, paying the woman approximately $70,000 more per year than the salary earned by  the Secretary of State.  And, just as the dust settled from these adventures, his General Counsel took it upon herself to obliterate the autonomy of the Bank’s Ethics Office.

At the same time, emails surfaced suggesting that the Bank would defang its anti-corruption program after  push-back from the government of China.  Meanwhile, longstanding, widespread corruption came to light in Cambodia, the Philippines, India, Kenya and Viet Nam.

A year later, the General Services Division at the Bank was forced to disclose that its three principal IT vendors had been debarred for fraud and corruption.  One of them had bribed the Bank’s Chief Information Officer, who was also (nominally) debarred, and then compensated in the amount of $25,000 by the Bank for damage done to his reputation by the whole affair.

This year, the Bank’s Vice President for Institutional Integrity was exposed in the press for politicizing a high-level investigation in South Africa, an ethical lapse that directly affected the outcome of the recent presidential election there.

At the same time, the Independent Evaluation Group concluded that the inadequacy of internal controls regulating the Bank’s concessional lending rose to the level of a material weakness.

These problems will not be addressed by switching the seats around the table, nor will they be addressed by adopting the second of the commission’s recommendations: "Strengthening the WBG’s Reource Base," i.e. dumping more public money into the same pockets.  Greater taxpayer funding to finance the dubious actions of many of these people (and their friends, relatives, colleagues and cronies) sitting in brand new chairs is not the answer.

U.N. OIOS: Watchdog or Lapdog?

In honor of the 15^th anniversary of the United Nations Office of Internal Oversight Services (OIOS), the UN University hosted a panel today entitled “Watchdog or Lapdog? Maximizing the Value of Internal Oversight for a Better United Nations.” Cheers to the organizers for concocting this witty title; jeers to them for sugarcoating the topic.

Although the event – which included an opening address by UN Secretary-General Ban Ki-moon and a panel with Under-Secretary-General for Management Angela Kane (who has been accused of misconduct for publicly retaliating against a whistleblower) – seemed to present OIOS as an effective watchdog (albeit with room for improvement), GAP’s sources beg to differ. A preponderance of the evidence shows that the OIOS Investigations Division (OIOS/ID) – the unit that is supposed to investigate misconduct – is in many cases failing to do so and is also avoiding the implementation of much needed steps to improve its capacity to serve as an effective watchdog:

Exhibit #1: The Secretary-General stated during his opening remarks that the establishment of the UN’s Ethics Office was a significant accountability advance. What he failed to mention was that according to the Ethics Office’s August 2009 report to the General Assembly (para. 66), OIOS/ID failed to investigate a case of whistleblower retaliation referred to it by the Ethics Office, even though OIOS is tasked with conducting such investigations (para 5.5). Several whistleblowers have also approached GAP with complaints about OIOS’ failure to investigate their retaliation claims. How can OIOS expect witnesses to come forward with misconduct allegations when it refuses to protect them from retaliation for doing so? GAP submitted this question to the panel (via email) but the moderator failed to raise it, opting instead to end the panel 20 minutes early for a milk and cookie break. 

Exhibit #2: As alluded to by panel member Inga-Britt Ahlenius, Under-Secretary-General for Internal Oversight Services, OIOS/ID has been without a permanent director for more than two years, despite the nomination of qualified candidates, such as former head of the UN Procurement Task Force Robert Appleton. The fact that OIOS/ID lacks a permanent director who is protected from pressure and retaliation deprives the organization of a needed resource and deterrent to corruption, as pointed out in paragraph 22 of OIOS’ 2009 annual report. GAP also submitted a question regarding this situation, which the moderator once again failed to raise.

Exhibit #3: External reports have found that OIOS-ID is broken. A 2007 review by a UN consultant found that there appeared to be “something fundamentally awry with ID, its operating procedures and its underlying culture.” A separate assessment found similar problems and stated that: “the lack of effectiveness and high quality work of ID/OIOS is of critical importance because it affects the overall functioning of the Organization. First, it is detrimental to the Organization’s ability to manage and detect corruption, fraud and other serious offenses, which has in recent years damaged the reputation of the Organization and has engendered a sense of mistrust. Second, it impedes the ability of the Organization to combat and prevent future instances of wrongdoing.” OIOS has also come under fire from a former OIOS investigator who accused the office of whitewashing a report about wrongdoing committed by UN peacekeepers in the Congo.

Exhibit #4: As reported by the UN’s Independent Audit Advisory Committee, OIOS (especially OIOS/ID), has an extremely high vacancy rate, as more than 27 percent of its authorized posts are unfilled. Meanwhile, sources report that many OIOS/ID investigations into significant cases of fraud, such as one involving the misuse of USAID money by UN agencies in Afghanistan, are languishing. The rumor is that OIOS/ID is not conducting a single external investigation at the moment despite ongoing allegations of serious corruption. The General Assembly has requested that the Secretary-General fill these vacancies as a matter of priority. But instead of filling these positions, OIOS/ID is reportedly trying to reduce its mandate by claiming that it does not have the authority to investigate external contractors or former staff members accused of misconduct. But if they don’t, who will? 

Until OIOS/ID addresses these problems, it will be unable to effectively conduct its vital watchdog mission.