As Much as $130 Billion in World Bank Funds Lost to Fraud, Experts Say
May 17th, 2004 • Posted in: NewsWASHINGTON
Corruption and kickbacks have siphoned off as much as $130 billion in World Bank funds earmarked for development projects since 1946, a U.S. Senate hearing was told last week.
Sen. Richard Lugar (R-Ind.) cited experts’ estimates that between $26 billion and $130 billion have been lost to fraud and corruption, instead of meeting the needs of poor nations, reported the Reuters news agency.
“In its starkest terms, corruption has cost the lives of uncounted individuals contending with poverty and disease,” Lugar said last week.
If misused funds from other multilateral development banks are included in the tally, the figure rises to about $200 billion, according to researchers such as Northwestern University associate professor Jeffrey Winters.
“The lion’s share of the theft of development funds occurs in the implementation of projects and the use of loan funds by client governments,” Winters told the hearing last week in Washington.
While the news is bad for the World Bank, which rejected the estimates as having “no basis in fact,” the organization won praise for president James Wolfensohn’s recent push to stamp out corruption, noted Reuters.
While World Bank rules prevented staff from testifying publicly at last week’s hearing, the institution’s Web site details some of its efforts, including a 180-strong roster of entities blacklisted from contracts due to past corruption.
Last week’s hearing — the first public accounting of fraud being examined by an ongoing Senate investigation — called for greater scrutiny and auditing of World Bank and others’ projects.
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