GAP: STOP Bailouts for International Development Banks

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No International Bank Bailouts without Whistleblower Protections!

Dear GAP Supporter:

Last December, while US taxpayers were doing their holiday shopping, Congress quietly approved more than $35 billion in bailouts to international development banks. These multilateral development banks (MDBs) are immune from national oversight and laws, both here and abroad. They are riddled with corruption and blatantly resist any meaningful internal governance reform. Experts estimate that $26 – $130 billion have been lost to corruption at the World Bank alone since its founding, to say nothing of the other MDBs.

Fortunately, Congress hasn't issued a blank check. According to a federal law that was passed in December, before the US can contribute tens of billions of dollars in cold cash and guarantees to the World Bank, the Inter-American Development Bank and the African Development Bank, the Treasury Department must report that each institution is making substantial progress toward implementing certain reforms – including best practice whistleblower protections. That's where you come in.

Please sign our petition to demand the Treasury Department to conduct – and release for public comment – a credible review that details the implementation of the MDB whistleblower protections!

The Treasury Department is required to submit a report to Congress about the MDBs progress on these reform measures. Without oversight from the American people, Treasury is expected to quietly issue a report that rubber-stamps MDB practices that have condoned retaliation against whistleblowers. The report may well approve the bailouts, although the Banks have yet to even adopt best practice whistleblower protections, let alone implement them.

A comprehensive survey of more than 5,400 executives worldwide found that whistleblowers detect more economic crimes than corporate security, internal audits, fraud risk management and law enforcement combined. And why wouldn't they? Workers on the inside are often the only individuals with knowledge of corruption who aren't involved in the scheme. Strong whistleblower protections are crucial to ensuring that economic crimes are detected and that the billions of American taxpayer dollars flowing into them are spent appropriately. Together, we can ensure that before another penny of taxpayer money is distributed, the MDBs are held accountable for implementing strong whistleblower protections.

Please sign our petition to demand the Treasury Department to conduct – and release for public comment – a credible review that details the implementation of the MDB whistleblower protections!

This petition is a joint project of GAP and the National Taxpayers Union.

World Bank Tribunal Affirms Privacy and Free Speech Rights

The World Bank Administrative Tribunal released a far-reaching decision last month that gives employees of the Bank significant new protections from both excessive punishment for revealing information to the press and sweeping searches of their computers.

In the case John Y. Kim v. IBRD, whistleblower and GAP client Kim challenged the Bank's decision to fire him for providing information to Fox News about conflicts between former Bank President Paul Wolfowitz and the Bank's Board of Directors. Kim's termination followed 25 years of service at the Bank with a discipline-free employment record. This decision will have a lasting effect for years to come.

GAP was heavily involved in publicizing the concerns of Bank whistleblowers in 2007, which led to Wolfowitz'forced resignation.

A Cloud Over Turkish Candidate’s Chances to Lead I.M.F.

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By LANDON THOMAS Jr.

Published: May 19, 2011

LONDON — On paper Kemal Dervis would seem to be the perfect candidate to succeed Dominique Strauss-Kahn as leader of theInternational Monetary Fund.

Currently a vice president at the Brookings Institution, he was Turkey’s economy minister from 2001 to 2002 and was widely credited with bringing Turkey out of a severe financial crisis by privatizing state assets and slashing budget deficits amid fierce political opposition.

He speaks fluent French, German and English and is a veteran of I.M.F.-style bureaucracies like the World Bank and the United Nations. Earlier this week, London bookmakers were giving Mr. Dervis the second-best chance to get the I.M.F. job after Christine Lagarde, the finance minister of France.

But, Mr. Dervis, it turns out, has a secret that could disqualify him from being considered for the job. Years ago, while a senior executive at the World Bank, he had an affair with a female subordinate who now works at the I.M.F., according to a person with direct knowledge of the affair.

This person’s account was confirmed by Stanislas Balcerac, a former World Bank staff economist who worked on the same floor with Mr. Dervis and the woman.

In a brief interview Thursday, Mr. Dervis declined to discuss the details of his personal life. But after Mr. Strauss-Kahn’s departure over allegations of a sexual assault, questions of past impropriety could be enough to hurt a candidate’s chance.

On Friday, after word of the affair was reported, Mr. Dervis issued a statement through Brookings saying, in part, “I have not been, and will not be, a candidate” for the I.M.F. job.

Mr. Dervis, 62, was not married at the time of the affair, but the woman was, according Mr. Balcerac, who says he bears no ill will toward either person. In fact, he praises Mr. Dervis as one of the brightest, most adept and bureaucracy-beating executives at the World Bank at the time.

“He was not your standard bureaucrat,” he said. He made “decisions quickly and was extremely dynamic.”

Indeed, the professional talents of Mr. Dervis are a reason he has been widely mentioned this week as a possible candidate for the top job at the I.M.F. He would represent a potential bridge between the European establishment from which the I.M.F. chief has traditionally been chosen, and the emerging-economy countries that are now demanding to play a bigger role in global financial institutions. Turkey, with its 9 percent growth rate last year and its ambition to become a major regional actor in the Middle East, would certainly fit that bill.

Most intriguingly, perhaps, Mr. Dervis is a close friend of George Papandreou, the prime minister of Greece, whom he has been informally advising over the last two years.

The two men became acquainted in 2001 when Mr. Dervis was in charge of the Turkish economy and Mr. Papandreou was foreign minister for his government. Since then, Mr. Dervis has provided counsel in a variety of ways.

He has been an active participant in Mr. Papandreou’s annual summer ideas conference held on different Greek islands each year. He has huddled with him at the Brookings Institution in Washington. And he has, insiders say, shared many late-night phone calls with the Greek prime minister.

And Mr. Dervis has many professional admirers.

“He is the man for the job,” said Dani Rodrik, an expert on globalization and development at the John F. Kennedy School of Government at Harvard. “He would be a truly meritocratic appointment.”

But Mr. Dervis said on Thursday that he was in no way prepared for this sudden burst of publicity. “Look, I have not put my name forward, nor has anyone called me about the job,” Mr. Dervis said. “I am flattered, of course, but that is all I can say at the moment.”

In his Friday statement, indicating he would not be a candidate for the I.M.F. post, Mr. Dervis said, “I am fully engaged in, happy with, and focused on my global work at the Brookings Institution and look forward to continuing my research and policy work, including work on Turkey.”

No doubt, the affair in question is very old news. Mr. Balcerac points out that years ago the culture at the World Bank was looser and it was not uncommon for senior executives to have affairs with those working for them.

All of this changed in 2007, when the World Bank had its own, more minor scandal: Its president at the time, Paul D. Wolfowitz, promoted a woman he was involved with.

The I.M.F. has not said publicly who it is considering to succeed Mr. Strauss-Kahn.

John Lipsky, an American, has taken control as acting managing director and while there had been an expectation that Mr. Strauss-Kahn would leave before his term ended in October 2012 to run for the French presidency, it is not clear what type of short list, if any, the fund board has drawn up.

Another member of Socialist International (Kemal Dervis) could be heading International Monetary Fund

a former communist later turn socialist from Turkey, a non-Eruopean country, seem to be in line for the highest post of International Monetary Fund.

Kemal Dervis, former Administrator of UNDP who was "let go" by Ban Ki Moon following the scandals in North Korea (DPRK), seem to be willing to consider entering the race to replace Dominique Strauss-Kahn.

WSJ today said: "If Mr. Dervis were to put himself forward, he'd be a strong candidate - but he'd also present German Chancellor Angela Merkel with a tough test of whether she believes a Turk counts as European".

Looking at IMF history, since 1946, the post was held by only europeans, mostly members of Socialist International.

Immunity for British IMF chief over 'wife assault'

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The British head of the International Monetary Fund in Islamabad has been accused of assaulting his wife by having her removed from the family home but he cannot be charged due to his “diplomatic immunity” status.

By Rob Crilly in Islamabad 10:30PM BST 02 Jun 2010

Deena Shehata, 28, claims she was “manhandled” and forced from her home by her husband Paul Ross, but police were unable to do anything because of her husband’s job status.

The couple married in July 2007 and moved to Pakistan a year later when Mr Ross, 51, from Wembley, was appointed the IMF’s Resident Representative in Pakistan, in charge of an $11 billion (£7.5 billion) economic stabilisation programme.

Holders of such posts usually carry a United Nations diplomatic passport.

The couple’s marriage allegedly broke down and Miss Shehata said she returned to their home — a smart two-storey villa, protected by guards and barbed wire, in an area of the city popular with wealthy expats — on Friday to collect some of her belongings. She alleges that her husband grew impatient before forcing her out of the house.

“I was humiliated as my husband asked our guards to remove me from my own home,” she wrote in a statement for police.

A doctor’s report detailed bruises, cuts and grazes and concluded she was “mentally depressed over [the] trauma, she is feeling helplessness and is scared.”

Miss Shehata, a British-born academic, said she was desperate to leave Pakistan as soon as possible.

She said she was disappointed at the way police handled the case, and that appeals for help to the IMF had not helped her find justice.

“The best solution they have is to get me out of here quickly and safely,” she said, adding that the system seemed to want her removed from the scene like a “broken toy” rather than questioning her husband.

Sub Inspector Abbas, the police officer dealing with the case said that as soon as they found out that Mr Ross had diplomatic status they abandoned the case. He said they took a statement from Miss Shehata and did not investigate any further.

Miss Shehata’s supporters said yesterday that they would take the case to Pakistan’s ministry of foreign affairs.

Asma Jahangir, a human rights lawyer, said: “This is an issue where there must not and should not be immunity for diplomats or any man.”

Paul Ross said: "I am saddened by the allegations made by my wife, which are untrue, and I look forward to an independent investigation that will establish the true facts."

IMF Head Held on Sexual Assault Charge

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David Steven

Extraordinary news here in New York where the IMF’s Dominique Strauss-Kahn was this afternoon hauled out of the first class cabin of an Air France plane at JFK airport to be arrested for – allegedly – sexually assaulting the chambermaid in his room at the Sofitel Hotel.

According to the New York Times, Strauss-Kahn fled to the airport after the attack, leaving his mobile phone in his room, but was apprehended just 10 minutes before the plane was due to depart.

Strauss-Kahn, who had been expected to run for French President, was embroiled in asex scandal back in 2008, when he slept with an IMF employee at Davos, and was then accused of ushering her into a new job outside the Fund. Unlike the World Bank’s Paul Wolfowitz, who was forced out for giving preferential treatment to his partner, Strauss-Kahn kept his job.

Ironically, it was only on Friday that the Guardian ran an article by French journalist,Melissa Bounoua, lauding the open-mindedness of the French voter, who she claimed would happily have Strauss-Kahn as President, even if he were a serial shagger for whom consent wasn’t that big a deal.

Is Dominique Strauss-Kahn, current head of the International Monetary Fund, a “queutard” – literally, a man who makes extensive use of his intimate parts?[...] Strauss-Kahn (widely known as DSK) had an affair with Piroska Nagy, a Hungarian economist, while working at the IMF in 2008…

That wasn’t the only scandal. There was a fuss last year when a young French author, Tristane Banon, described her encounter with him. She explained that she had interviewed him for a book about public figures and their missteps, and claimed she had to fight him off physically…

“Personally, I doubt this side of DSK’s life would have any influence on how he would run the country,” Ms Bounoua claims in an article that makes all the usual excuses for the sexual proclivities of the powerful and is hailed, rather breathlessly, by the Guardian’s Jessica Reed as giving readers “sex, power, politics AND… a new French word: queutard.”

One wonders how Ms Bounoua and the Guardian will react to this new ‘fuss’…

Update: It’s worth remembering that ugly, if unproven, rumours have swirled round Strauss-Kahn for many years. Here’s Felix Salmon – now with Reuters, and one of the best financial journalists around – discussing the Frenchman’s ‘lower half problem’ in 2007 before he took over at the IMF.

Salmon quoted French journalist Chris Masse’s account of a previous Strauss-Kahn ‘fuss’:

A cable TV show (“93 Faubourg Saint Honoré”, on Paris Premiere, hosted by Thierry Ardisson) invited a young (and unknown to me) French actress. I don’t remember her name. She said that she had a bad encounter with Dominique Strauss-Kahn. Here’s what happened. She was asked to come in a little apartment he had in Paris, and then the next thing, Strauss-Kahn jumped on her and tried to undress her and more. She yelled, and told him that that was a rape, but the word “rape” (“viol” in French) didn’t seem to perturb him. She said that he was like “a gorille en rut” (a gorilla in rut).

Paul: IMF Implicated After Chief Arrested on Attempted Rape Charge

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The leader of the International Monetary Fund now embroiled in a criminal assault case in New York City was cleared in 2008 of harassment charges after an affair with an IMF economist.

But it's that kind of behavior that should make the world wonder about trusting the IMF, Rep. Ron Paul said Sunday.

The 2008 Republican presidential candidate told "Fox News Sunday" that Dominique Strauss-Kahn, who was pulled off an Air France flight moments before take-off from New York Saturday and arrested on charges of a criminal sex act, attempted rape and unlawful imprisonment, said the whole course of events "is a bit ironic."

Paul, who makes no secret about his disgust of IMF policies, said Strauss-Kahn demonstrates why the Fund has problems.

"These are the kind of people that are running the IMF and we want to turn the world finances and the control of the money supply to them," Paul said. "That should awaken everybody to the fact that they ought to look into the IMF and find out why we shouldn't be sacrificing more sovereignty to an organization like that and an individual like he was."

Strauss-Kahn, 62, is scheduled for arraignment Sunday after being accused by a 32-year-old maid at the luxury Sofitel hotel near Times Square of an attack on her in his suite on Saturday afternoon.

The IMF chief, who is considered a frontrunner in challenging Nicolas Sarkozy for the French presidency, "denies all the charges against him," his attorney, Benjamin Brafman, said Sunday.

A State Department press officer said she had no comment on last night's arrest. Though a New York City police spokesman said Strauss-Kahn does not have diplomatic immunity, the officer could not say with certainty whether that's accurate, but said the department is reviewing his status.

The IMF also said it's not commenting on the arrest but issued a statement saying, "The IMF remains fully functioning and operational." The Wall Street Journal reported that John Lipsky, Strauss-Kahn's first deputy, has been in the acting managing director role since Strauss-Kahn left D.C. for New York.

It's not the first time that the thrice-married Strauss-Kahn has been in trouble for his relationships. In 2008, an outside lawyer hired by the IMF to investigate three complaints made about Strauss-Kahn's behavior concluded that he did not force an ex-lover to accept a payout from the IMF and move to another organization.

The executive board at the IMF took no action against Strauss-Kahn but warned him about behavior toward female staff. Strauss-Kahn reportedly offered an apology to the board. His wife, French newswoman Anne Sinclair, wrote it off as a "one night stand."

At the time, French commentators claimed the investigation's timing was suspicious since it coincided with the IMF push toward a global currency.

"It's very odd that it comes just at the moment when people are talking about the IMF and its head taking a lead role in creating a new global financial order which will not necessarily be to the advantage of wealthy, right-wing Americans," a French economist and government adviser told Britain's Observer newspaper.

But Paul said the IMF's moves toward a world currency are "a threat to us."

"I would like to go to a sound American currency, but others want to go to a world currency. They want to use the IMF," he said.