WASHINGTON, January 13, 2004 — The World Bank welcomes Monday's decision of the district court in Huddinge, Sweden, to convict two individuals of bribery in connection with the misuse of World Bank trust funds. This verdict should serve as a clear warning that the World Bank is strongly committed to fighting fraud and corruption, and that we will ensure, to the best of our ability, that any such incidences are fully prosecuted.
We have vigorously pursued this particular investigation since the allegations were first reported to the World Bank's Fraud and Corruption Hotline in 1999. In 2000, the World Bank terminated the employment of three of its own staff members involved in the matter, and referred this case to the U.S. and Swedish authorities. The World Bank has cooperated fully with the authorities, and a World Bank staff member testified at the trial in Sweden at the request of the prosecution. Two of the former staff members had already plead guilty to charges in U.S. district court, and now two individuals in Sweden who were involved in the firms that received World Bank contracts - financed by Consultant Trust Funds - have been convicted of making payments to the former staff members.
In 2001, the World Bank permanently debarred seven Swedish firms, one Dutch firm, and two individuals from future business with the World Bank. In addition, the World Bank reimbursed the Swedish Development Agency for all the Consultant Trust Funds affected by this case. After an internal audit and an external review of the World Bank's administration of trust funds, the World Bank implemented significant policy and procedural reforms to enhance administration of the monies entrusted to its care.
The World Bank expresses its appreciation for the efforts of the Swedish prosecutor, Mr. Christer van der Kwast, in bringing this case to closure.