The fight against corruption: international organizations at a cross‐roads

Published date09 May 2008
Date09 May 2008
AuthorSteve Berkman,Nancy Z. Boswell,Franz H. Brüner,Mark Gough,John T. McCormick,Peter Egens Pedersen,Jose Ugaz,Stephen Zimmermann
Subject MatterAccounting & finance
The fight against corruption:
international organizations
at a cross-roads
Steve Berkman
Leesburgh, Virginia, USA
Nancy Z. Boswell
Transparency International-USA, Washington, DC, USA
Franz H. Bru
European Anti-Fraud Office (OLAF), Brussels, Belgium
Mark Gough
United Nations Investigation Division, Vienna International Centre, Vienna, Austria
John T. McCormick
Board of Governors of the Federal Reserve System, Washington, DC, USA
Peter Egens Pedersen
Svendborg, Denmark
Jose Ugaz
Benites, Forno & Ugaz Law Firms, Lima, Peru, and
Stephen Zimmermann
Inter-American Development Bank, Washington, DC, USA
Purpose – The purpose of this paper is to offer anti-corruption experts’ personal assessments of the
progress international organizations have made in fighting corruption.
Design/methodology/approach – This paper contains a survey of the viewpoints of a number of
anti-corruption experts who themselves are current or former staff of international organizations, or
who – from their positions within the private sector or in non-governmental organizations – are able
to offer a unique and distanced perspective on the key corruption-related issues and challenges facing
international organizations today.
Findings – It is agreed that international organizations today are at a cross-roads in their individual
and collective fight against corruption. International organizations must weather the corruption
scandals that have recently plagued several organizations, and must confront the question of whether
their staffs, boards, and member governments indeed have the ability, will, and commitment to fight
corruption. To addres s these challenges, intern ational organizations must adopt proactive
investigative strategies when combating corruption, seek greater cooperation with each other, and
must ensure that their respective investigation units have the necessary resources and independence to
effectively detect, investigate, and prevent corruption.
Originality/value The paper offers a realistic prognosis on the future of the anti-corruption
movement within and among international organizations.
Keywords Corruption, Fraud,International organizations,International banks, Monetary policy
Paper type Viewpoint
The current issue and full text archive of this journal is available at
Journal of Financial Crime
Vol. 15 No. 2, 2008
pp. 124-154
qEmerald Group Publishing Limited
DOI 10.1108/13590790810866863
By John T. McCormick[1]
On May 17, 2007, immediately following the public announcement by Paul D. Wolfowitz
that he would resign as President of the World Bank amid criticisms of his leadership
style and the way he handled salary increases for his companion, an employee of the
bank, Transparency International-USA issued the following statement:
With the change in leadership at the World Bank, it is time for those who care about
development to recommit to the Bank’s mission of improving the lives of the poor and to
removing corruption as an impediment to this objective. The Bank is at a crossroads where it
must promptly demonstrate that its own governance system is repaired and that its
leadership, both a new President and the Board, are fully committed to an effective
anti-corruption agenda.
While Transparency Internationals (TI’s) comments were directed at the World Bank
in the wake of President Wolfowitz’s resignation, those comments could just as well
have been directed at the entire community of international organizations engaged in
the fight against corruption. Beginning in the mid-1990s, those organizations – the
United Nations (UN), the European Union (EU), multilateral development banks
(MDBs) such as the World Bank, the European Bank for Reconstruction and
Development, the Asian Development Bank, the Africa Development Bank, and the
Inter-American Development Bank (IDB), and others initiated programs to
investigate and sanction individuals and companies engaged in corruption in projects
financed or administered by these organizations.
Now, some 12 years later, these international organizations are at a cross-roads;
many face criticism that they lack the necessary will and commitment to effectively
fight and reduce fraud and corruption within their organizations and projects. In
addition to the events that led to the resignation of President Wolfowitz, a number of
other significant controversies have recently shaken the international community,
including allegations resulting in the Iraq Oil for Food investigation at the UN, and
those surrounding the British Government’s decision in December 2006 to call off a
corruption inquiry into a multi-billion dollar arms deal between British aerospace
company BAE Systems PLC and Saudi Arabia, to name just two. Increasingly, some
global anti-corruption advocates argue that many international organizations turn a
blind eye to corruption, even when mounting evidence demonstrates that bribery and
theft are undermining the effectiveness of their lending programs. Other critics even
call into question whether the purpose of some of these organizations is still relevant,
or whether these same organizations have the will and ability to fulfill the original roles
and missions for which they were created.
This survey paper will seek to assess the progress of international organizations in
fighting corruption – both individually and collectively – and to offer a realistic
prognosis on the future of the anti-corruption movement within and among
international organizations. Many of the authors of this survey paper are current or
former staff members of the international organizations discussed herein, and are
uniquely qualified to offer their perspectives on the key issues and challenges facing
international organizations today. The other authors – given their positions in
non-governmental organizations (NGO) and the private sector can offer a more
distanced perspective given their vantage points outside these international
The fight against

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