Institutional Integrity at World Bank?

Opinion Journal:

...

Mr. Zoellick's first test will come early. As we go to press, sources inside and outside the bank tell us that a follow-up to the putsch against Mr. Wolfowitz is being engineered by Managing Director Graeme Wheeler and Staff Association Chair Alison Cave against Suzanne Rich Folsom, who runs the bank's Department of Institutional Integrity, or INT. Ms. Folsom, an ethics lawyer brought in by former president Jim Wolfensohn and promoted to her current job by Mr. Wolfowitz, has been aggressively pursuing corruption investigations, much to the alarm of some at the bank.

Prominent among those investigations is one concerning an Indian health project. Irregularities in the project, including indications of bid-rigging and bribery, led Mr. Wolfowitz to veto further loans to India in 2005 while the investigation unfolded, despite fierce protests from the project's managers. Now that the INT is about to issue a report about the project, Mr. Wheeler has been lobbying the bank's executive directors to place Ms. Folsom on administrative leave, and for the INT's oversight responsibilities to be radically diminished. Among Mr. Wheeler's responsibilities at the bank is oversight of its works in South Asia. Mr. Wheeler and Ms. Cave were among the most outspoken bank employees calling on Mr. Wolfowitz to resign.

Mr. Zoellick can hardly allow this putsch to go forward if he means to safeguard the bank's integrity. Ms. Folsom was bound to make plenty of enemies by the very nature of her work; allowing her to be pushed out sends the signal that the job is a poisoned chalice to anyone who takes its work seriously. Mr. Zoellick must also insist that the INT get the funding that Mr. Wolfowitz requested last year from the bank's board of directors (he was turned down), and that the recommendations from a forthcoming report on the INT by former Fed chief Paul Volcker be heeded.

...
There is much more. If the people running this bank had integrity they would never have treated Wolfowitz so shabbily and nor would they be trying to undermine the person in charge of an Institutional Integrity investigation. They seem to be more about giving away money than following sound lending practices.

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