Officials at the World Bank are expanding their anti-corruption efforts, but the procedures used by the bank are often not clearly understood by lawyers who represent clients in overseas fraud cases, according to John Oberdorfer, a partner at Patton Boggs LLP.
Oberdorfer helped pioneer the firm’s global anti-corruption practice and represents companies in Foreign Corrupt Practices Act cases. He will be one of the panelists at a Dec. 2 conference at the World Bank that will focus on the bank’s expanding anti-corruption and sanctions program.
In the video interview below, Oberdorfer says the World Bank’s emphasis on corruption has intensified in recent years as part of overall international efforts against fraud. Donor nations have also prodded the bank to combat corruption. Now, he says, the bank has declared itself to be fully committed to aggressively rooting out fraud in bank-financed projects.
“We would expect, for large international corporations, that they’re going to be much more in focus than perhaps before,” he said.
Penalties for contractors on bank projects can be harsh, including debarment, in which a company accused of fraud can be prohibited from working on any bank-financed project. The bank can also publicly disclose the identity of a company engaged in misconduct, which he said could be a “death knell” for companies in some circumstances. In addition, the bank makes referrals to prosecuting authorities in the United States and other countries, which have their own anti-corruption laws.
“They have always been able to disbar or to disqualify a company from future contacts,”‘ Oberdorfer said. “They now have amplified that ability to try and require disgorgement of the monies that have been provided to the contractor. And they have linked up with other multi-lateral development banks, so if there is a debarment by the World Bank it is effective at the Inter American Bank and at the Asian Development Bank.”
The conference, Oberdorfer said, will focus on how the World Bank investigates allegations, adjudicates cases, decides on sanctions and coordinates with other regional development banks entities and prosecuting agencies.
The panelists, who include Pascale Dubois, the bank’s sanctions, evaluation and suspension officer and Stephen Zimmerman, director of operations in the bank’s integrity vice presidency, are also likely to explain and assess the bank’s procedural rules that govern the bank’s internal handling of corruption cases.
The World Bank created the integrity unit, its investigative arm in 2001 and since then has gradually broadened its role. The unit has debarred more than 400 firms and individuals, though some watchdog groups have complained the Bank has not been aggressive enough.
The conference is the first of three anti-corruption events in a series that Patton Boggs called the “Trilogy of Perils.’’ The second in mid-January will center on the FCPA and the new anti-bribery law in the United Kingdom. The third session will focus on the mitigation of risks for companies investing in countries where there is a high risk of encountering corruption.