CONGO: New row over delay of Congo funds report

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

president.



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

possible.



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.

• 104 Globalization
• 106 Money & Politics
• 116 Human Rights
• 185 Corruption
• 194 World Financial Institutions