Bush signs legislation urging World Bank reforms
Updated: 2005-11-16 10:02
Legislation to encourage greater transparency and accountability in the World
Bank and other international lending institutions has been signed into law by
President George W. Bush.
The reforms were contained in an amendment to the 2006 foreign operations
appropriation bill proposed by Indiana Republican Sen. Richard Lugar, chairman
of the Senate Foreign Relations Committee. Bush signed the bill on Monday, Lugar
The reforms resulted from an investigation into multilateral development bank
corruption launched by Lugar in 2003.
The reforms seek to encourage disclosure of personal financial holdings by
bank employees; to improve the quality and oversight of development bank loans;
and to ensure independent audits of bank projects.
A committee aide told Reuters the U.S. Congress cannot mandate the banks to
act, because they are multinational institutions.
But the new law does require U.S. executive directors on the banks' governing
boards to raise these specific reform issues and to seek adoption by the boards,
The United States is the largest donor to the multilateral development system
and has considerable clout over decision-making. Other countries are known to
support Lugar's reform proposals, said the aide.
The financial disclosure requirements cover all bank employees. But in
reality it will be up to each bank to determine which employees must comply and
exactly how much of their personal financial histories they must make public,
the aide said.
The new law also requires that the U.S. Treasury Department make publicly
available the positions on bank policies and significant projects taken by the
U.S. executive directors on the banks' governing boards.
Lugar said the new measures would "level the playing field so that honest
companies and innocent individuals are not disadvantaged by the corrupt."
In addition to the World Bank, the affected institutions include the African
Development Bank, the Asian Development Bank, the Inter-American Development
Bank and the European Bank for Reconstruction and Development.