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CONGO: New row over delay of Congo funds report

by Dino MahtaniFinancial Times
May 8th, 2007

The World Bank has withheld the findings of an inquiry into alleged
mismanagement of bank funds in the Democratic Republic of Congo, raising fresh
questions about the anti-corruption strategy of Paul Wolfowitz, the bank's

An audit by the integrity department, which answers directly to Mr Wolfowitz,
was launched more than a year ago in the wake of allegations of corruption in
Congolese government agencies handling hundreds of millions of dollars in
postwar reconstruction aid. The inquiry raised hopes in Kinshasa that officials
alleged to have misused donor funds would be exposed.

Bank insiders say a draft report was completed in the autumn when the country
was in the midst of its first contested election, which cost donors about $500m.
But at the time the bank was reluctant to cause ructions by publicising the
report. It has since been kept private.

In its rush to re-engage with Congo as it emerged from civil war, some experts
contend that the World Bank failed to exercise sufficient oversight in lending.
In line with bank policy "not to punish the poor twice when there is government
corruption", officials have argued that if normal procedures had applied to
Congo, where the state was in advanced collapse, no funding would have been

Mr Wolfowitz has spearheaded a tough but controversial anti-corruption policy,
which some donor nations argue has been applied selectively.

The bank has committed $3.6bn (2.6bn, 1.8bn) to Congo since 2001, and
disbursed at least $1.2bn. In March it approved a fresh grant of $190m for
emergency reconstruction. It is set to discuss a further $290m project for the
rehabilitation of the Inga hydroelectric dam later this month.

Some diplomats, UN and reformist Congolese argue the inquiry should have been
disclosed - at least to concerned creditor nations - before the release of new
funds. Failure to do so, one senior UN official in Congo's peacekeeping mission
told the FT, risked "undermining transparency efforts".

One bank official said there was "considerable frustration" within its Africa
and Congo teams at the prolonged delay. The bank told the FT this week it hoped
to share the details with the Congolese government this month. A bank official
said one reason for the delay was an internal debate over the bank's legal
authority in probing Congo's budget as part of the investigation.

The controversy has thrown into question the bank's own record on transparency,
at a time Mr Wolfowitz is under pressure to resign over his role in the
promotion and salary increase of his girlfriend.
In another sign the scandal in Washington is undermining the bank's credibility
abroad, a senior European diplomat and a Congolese government appointee said
from Kinshasa this week that they believed the report was being held back to
avoid Mr Wolfowitz losing the personal support of senior Congolese government
officials. Some African leaders support Mr Wolfowitz for his focus on Africa and
do not want to see him resign.

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