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  • Richard Bistrong

The World Bank: Confronting Poverty without Corruption

I was recently reading an article about a former UN consultant who was convicted and sentenced for conspiring to inflate prices for a UN contract to distribute pharmaceuticals to the DNC. As part of the investigation, e-mail was discovered in which the consultant wrote (link here), “Let’s make loads of cash now…Clearly, supplying small amounts of grossly overpriced drugs to dying and starving Africans is a very good start.” As someone who was charged with foreign bribery offenses including a UN defense contract, it is clear that aid agencies are not immune from corruption. As the e-mail demonstrates in the extreme, the illusion and distortion from the front lines of business, including my own when I was in the field, and where the UN actually saved money due to the bribe, is too often:  “corruption is a victimless crime.”

However, regardless of the financial consequences, the victims of corruption remain numerous, including the aid and development organizations which are then compromised in terms of process and resources, and in most cases, societies and communities at large. Aid and development organizations are tasked with lifting the standards of living in many regions where extreme poverty is the norm. We know that corruption robs those who need it most. Sub-standard products and services are often selected due to corruption, or prices are so wildly inflated that there is less of the actual product or service being procured, as the budget is now consumed by corruption; thus, less of the funding ends up in the hands of those who might desperately require such assistance.

Conversely, when funding and aid is granted, devoid of fraud and corruption, the beneficiaries are many, and this is something I will address on October 7th in a presentation, at the invitation of the Integrity Vice Presidency of the World Bank, titled “Why Break the Law: The Misuse of Public Assets and Development Resources.”

The World Bank has the responsibility of financing projects that are designed to further, economic development and deliver services with the ultimate goal of ending poverty. The projects are also designed to promote good governance and ensure that funds and services reach their intended beneficiaries. In other words, it serves as both a global finance institution and development agency.

As is the case with any global operation, the touch points of implementation multiply across the intersection of commercial entities, third parties, and public officials. Thus, the potential for corrupt conduct is not unrealistic, particularly when projects are implemented in high-risk  and/or weak governance contexts. In this mix of foreign officials, commercial entities and third parties, the corruption risks, and investigatory challenges multiply. And here we speak of corruption beyond bribery, as the risks include financial fraud, collision,  and coercion.

When I recently asked Steve Zimmerman, Director of Operations, at the World Bank Integrity Vice Presidency where he thought my experience and perspective might bring value to the work of his unit, he replied “Richard, our work is to protect the integrity of the projects we finance. Corruption in a development context steals from the poor, and I think sharing your perspective and your first-hand experiences from the front lines will help our organization raise awareness of how corruption actually arises. The Bank’s mandate is to support client countries in their efforts to end poverty but without simultaneously confronting corruption; our ability and that of client countries to achieve that goal is at risk.”

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