The purpose of international investigations is not law enforcement—putting people in jail—, said Paul Volcker, Chairman of the Independent Inquiry into the United Nations Oil for Food Program, but to “get the facts out,” in other words, full transparency and openness. The former Chairman of the US Federal Reserve was addressing the Sixth Conference of International Investigators at IDB headquarters in Washington, D.C. Conference attendees included over 70 officials from numerous multilateral development banks, including the World Bank, the African Development Bank, the Asian Development Bank, the European Investment Bank and the International Monetary Fund, as well as European organizations such as the European Anti-Fraud Office (OLAF) and a host of United Nations specialized agencies and Interpol.
“Corruption is the enemy of economic development,” Volcker explained. International organizations used to have a clear role to play but now “corrosive cynicism” affects them. Although their prestige may be diminished, they still afford a certain platform and opportunity for cooperation with local governments, he added. Investigations into reports of fraud or corruption in international organizations bring the issues to “high ground,” demonstrating to the public that corruption is no longer being swept under the rug, he insisted.
In his keynote address, Volcker noted that international investigators may face the opposition of political authorities, reluctance from board members of their own organizations who could be more interested in getting the programs done, and uncooperative local authorities. Investigation requires professionalism and persistence, he said, plus diplomatic skills and clear support “from the top.”
Investigators should carefully select the cases they take on so as to have the greatest impact, Volcker advised, , the ones that will make corrupt officials worry about “who's next.” The Oil for Food Program, for example, involved some 4,000 contractors, many of which probably broke rules, said Volcker, but not all of which could be investigated. Investigators had to pick out the most egregious cases.
Clear institutional support is also key, according to Volcker. In the Oil for Food Program inquiry, for instance, he insisted that the United Nations Security Council pass a resolution on the investigation to give his committee “moral authority.” And the Security Council decision was a “big factor” in obtaining cooperation from some countries, he reported.
International investigators are in a strange position, Volcker noted, since although conceptually they are on the “side of the angels,” they are not always welcome because of the “natural bureaucratic resistance” to what they consider excessive oversight. However, staff should understand that investigators are working in the best interests of the organization, which needs to be recognized as “above suspicion.”
IDB President Enrique V. Iglesias opened the meeting, stating that “Corruption drains our institutions and undermines the economic foundation of sustainable growth. Corruption distorts the very rule of law, and it threatens our commitment to building democratic, prosperous, and equitable societies.” Iglesias described the IDB's multifaceted approach to tackling corruption and promoting integrity both within the Bank and in its borrowing member countries.
Iglesias highlighted the strategies implemented by the Bank to ensure that its staff works in an environment of trust, such as the soon-to-be-released updated version of the Code of Ethics. He also reasserted the Bank's commitment to answering inquiries and protecting whistleblowers. As for fighting corruption in the region, Iglesias cited the Bank's support for its borrowers in implementing effective public sector reforms to enhance their capacity to prevent corruption and promote the rule of law.
Steven Zimmermann, Chief of the IDB Office of Institutional Integrity (OII), which organized the conference, noted how the event has grown in six years. He attributed this growth to recognition on the part of international organizations of how important internal integrity and the fight against corruption are to the development agenda. The conference also helps build trust and improve practice, he added.
OII is the central unit responsible for receiving and investigating allegations of corrupt or fraudulent activities involving Bank-financed activities or misconduct by Bank staff. It also helps prevent corruption through education, training and policy recommendations based on lessons learned. OII is an independent unit within the Bank, whose Chief reports directly to the President. The OII recently published its Annual Report, entitled “ On Building Awareness, Investigation Allegations, and Taking Action against Corrupt Practices. ”
During the conference, panelists debated many of the key issues international organizations deal with in investigating and preventing corruption. The topics included case intake, witness protection, due process, whistleblower protection, regulations for anonymous allegations, financial disclosure polices, internal and external cooperation in investigations, case referral for internal action and to national authorities, and policies to ensure third-party accountability.