Senator Mark Kirk, who won President Obama's Senate seat, is the only Senator who has been on the staff of the World Bank Group. In the broadcasted Q&A session of his speech at the AEI a few years ago, I asked him about the oversight of the Bank, and he replied that the Congresses of the past "had greater knowledge about the functioning of the World Bank than the Pelosi Congress, and that is too bad" (audio is here and video is here). The Report I refer to, and not acted upon and indeed not followed-up on by Congress, that was requested by Rep. Pelosi and Senators McConnell and Leahy is here. Now that Mark Kirk is in the Senate and instantly treated as a potential presidential or vice presidential candidate down the road, everyone will be watching to see what Senator Kirk does vis-à-vis oversight on an area he alone in the Senate has special knowledge and insight on.
Why Oversight?
There are parts of the Bank that are non-functional misnomers and therefore do much more than harm, because they lull already lethargic oversight bodies:
"Department of Institutional Integrity" has a head who has been accused of gross misconduct in his previous position, but presumably because of his immunities at the World Bank, he has not been proceeded against. However, it is obvious that with the Damocles Sword hanging over his head, he has no independence. A very uncertain fate awaits him back home in South Africa should he be dismissed from the Bank, and there is therefore nothing he can do to stand up to the Bank's management. How can he possibly assure institutional integrity? For more on that department and the reported suppression of key information, see here and here.
The "Independent Evaluation Group" is headed by an individual who has not worked outside the World Bank for about 30 years. What independence can be expected from such an individual? Everyone in the department is on the payroll of the very institution that they are supposed to pass judgment on. How is that possibly an "independent evaluation" group? It is no wonder that everyone on the Senator Kirk panel wanted proper independent evaluation done. That might have been possible with the Bayh Amendment, but its deletion by a Senate staffer -- in effect who single-handedly overrode the entire U.S. Senate, an unprecedented macabre display of a staffer's power -- has put an end to that, and even the request to the G.A.O. from Senators Leahy, Lugar and Bayh, now over 2 years old, has not resulted in anything.
Yet, the US Congress is all set to hand over about $14 billion in paid-in and subscribed capital, or about 16 percent of the $86 billion capital increase for the World Bank, without even the request of its own Senators and Representatives for a GAO study having been allowed by the Bank. And, is all that funding really needed? Over a hundred senior managers are paid more than President Obama. Who among them is doing work that is more arduous and more complex than Obama's?
Further, Senator Lugar, the Ranking Member on the Senate Foreign Relations Committee put out a press release and a lengthy report indicating that there would be no such funding until reform, but his statement itself seems to have been trampled upon in the stampede to appropriate.
Disappearance of "Merit-Based Selection for the President of the World Bank" Between the Toronto G-20 in June 2010 and the Seoul G-20 in November 2010
Merit-based selection for the next President of the World Bank taking office in July 2012 was alive and well in the Toronto G-20 documents in June 2010, but when the G-20 reached Seoul in November 2010, that concept disappeared from the communiqué (see Toronto communiqué here and Seoul communiqué here). It has little to do with Korea itself, a rising nation making waves in Asia and the rest of the world, but rather the deviousness of various individuals and interests at the meeting. It is particularly egregious because a high-level commission appointed by the World Bank itself had recommended merit-based selection of the next World Bank President.
It was reported by Simon Johnson, a fellow columnist at the Huffington Post, that the Summit was a complete disappointment for the U.S. Treasury meaning Secretary Geithner and Under Secretary Lael Brainard. The Treasury has largely been asleep at the wheel. Meanwhile, Robert Zoellick, who functioned as chief of staff for the year 2000 George W. Bush Florida Recount operations, who has never lived worked or studied in developing countries, is currently making tea-party-lite commentary, while campaigning for President Obama to nominate Zoellick for another term in office. If that happens, it will be seen by Obama's base as yet another slap in their face, especially as the G-20 Toronto Summit's "merit-based" approach has already been apparently thwarted by the back-room machinations. Further, the negation of reforms by Zoellick should equally concern conservatives, especially those who led the bipartisan efforts to reform the World Bank and IMF through the Congressional Commission on International Financial Institutions, many of whom are back in power now.
The World Bank Group can be a significant force for change, but without reform its effectiveness will undoubtedly continue to be suspect.