Thursday, January 17, 2008

Furor(?) over resignation of World Bank's antifraud chief

In what the New York Times is painting as the continuing battle of World Bank staffers against the fallen regime of deposed Bank president Paul Wolfowitz, Suzanne Rich Folsom has resigned her post amidst much speculated acrimony and tension.

She had been chief of the bank’s antifraud unit, and Wolfowitz, her former boss, had made the battle against corruption job one at the World Bank. Like her former boss, she was supposedly prickly and “overly aggressive.” Yet it was hinted that the Bank that was merely complacent?

New bank president Robert Zoellick believes corruption should remain a high priority, but like the way these stories always pan out, he is less “divisive” and “confrontational” about pursuing the issue. One wonders whether these boxes painted for Wolfowitz and his staffers – confrontational, divisive – and the one anointed for Zoellick – pragmatic, measured – is actually true or just makes for a more interesting tale.

One reason for her departure, buried in the story’s juicy final paragraph, is that Folsom was a “onetime activist in Republican Party politics” – where members of the bank tend to be liberal – and she was seen as just another conservative flak for mean Mr. Wolfowitz. Perhaps it’s just me, but the perception of the World Bank in every story like this is of an international institution where a large majority of staffers have nothing better to do than gossip and backstab. (This from a person who loves office gossip more than most anything.) Maybe if they spent less time worrying about…

My problem with gossip-laden stories is either you give us the goods or don’t mention the issues at all. Whether it can be blamed on the mantle of objectivity or just good taste, too many reporters want to take the high road – where no high road has been tread upon – and merely mention these issues of personality conflicts in passing. I say, if people talk smack about others enough to drive them away, a newspaper is the proper forum to air that dirty laundry. It may tell us something about the institution. (See previous paragraph.) AfricaFlak rule o’ journalism number 658: Don’t beat around the bush – that gets us nowhere. If you have something to say, say it.

Nonetheless, here’s some uninteresting, but useful tidbits.

Corruption is widely described as a problem in the bank’s $30 billion annual lending programs for poor countries, but the extent is in dispute. Last September, an outside panel led by Paul A. Volcker, the former Federal Reserve chairman, found weak management, distrust and internal resistance to combating fraud at the bank.

Mr. Zoellick, according to his aides, has sought to carry out broad changes in the way Ms. Folsom’s unit interacts with other bank officials, and to install procedures on competitive bidding, inspections and disclosure that would prevent corruption instead of just prosecuting cases after the fact.

“It’s all very well to talk about corruption and to have these reports,” said Ngozi Okonjo-Iweala, a managing director at the bank and former finance minister of Nigeria, who negotiated the India agreement. “Bob Zoellick is geared toward implementation, and how we sustain this and embed it in a country.”

Ms. Okonjo-Iweala negotiated the arrangement with India to set up ways to rid programs of fraud. By contrast, Mr. Wolfowitz abruptly suspended aid to India after accusations of fraud in 2005, and that suspension angered board members and helped pave the way for his downfall, many bank officials say.

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