CAPITALISM'S ACHILLES HEEL Dirty Money and How to

252 CAPITALISM’S ACHILLES HEEL
Fighting corruption is a top-down exercise and must be if it is to succeed.
Heads of state and government and senior officials have to be clean and held
accountable before anticorruption efforts can take hold at lower levels.
For the World Bank, fighting corruption starts at home, in its own projects.
A senior Bank auditor said to me several years ago that most loan officers
thought that about 15 percent of their disbursements were lost to
corruption. His own estimate, combining what is stolen and what is wasted,
was 50 percent. Only half the Bank’s money in his experience does what it’s
supposed to do. 8
Matters have improved since 2000. Some 100 countries have lined up
for corruption assessments and suggestions on fighting the problem. Perhaps
only a few are serious about the effort. For its part, the Bank has published
an “ineligible list” of some 300 companies and individuals, most based in
developing countries, removed from bidding on construction and supplies,
resulting from violation of World Bank guidelines. 9 Western country representatives
at the Bank reportedly work feverishly to keep their companies off
the list.
The World Bank, to its credit, is finally attacking the problem. But by
now official corruption globally has a head start of several decades and will
be just that much more difficult to curtail.
The Bank’s slow, guarded approach to corruption hardly augers well for
attacking the much more damaging issue I am addressing: the flow of hundreds
of billions of dollars of dirty money permanently out of poorer countries.
This is the problem the Bank cannot bring itself to acknowledge.
FILLING WESTERN COFFERS: MUM’S THE WORD
For the World Bank and also the IMF, discussion of illicit cross-border
transfers is addressed almost exclusively to developing and transitional countries
and occasionally offshore financial centers but virtually never to western
banks and corporations. The United States and Europe, principal
owners and controllers of the Bank and the Fund, get a bye on any responsibility
for dirty money.
The IMF’s official chronology, for the first time since its founding in
1944, mentioned the words “money laundering” in 2002. A year earlier, in
an extraordinarily cautious policy paper jointly prepared by Bank and Fund