The World Bank's anticorruption unit is suffering serious problems and should be stripped of key responsibilities and placed under new oversight, an independent review panel will report today.
The investigation, led by Paul Volcker, the former US Federal Reserve chairman, found "severe strains" between the unit and other bank departments which led to "counter-productive" relations with both rich and poor countries.
The findings of the report present Robert Zoellick, president of the World Bank, with one of his toughest challenges since taking over from Paul Wolfowitz, who was driven from office this summer in an ethics scandal.
Mr Zoellick's handling of the report risks inflaming internal divisions over the anti-corruption department, which became a target of criticism during the recent leadership crisis.
The unit was criticised at the time for what some staff perceived as politicisation of its role in investigating corruption in bank projects under Mr Wolfowitz, former US deputy secretary of defence.
Mr Zoellick said yesterday that he had read some of the report and that, despite its criticism of the unit, he wanted Suzanne Folsom, the unit's director, to stay on. - ( Financial Times Service )
