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Byline: Barrett Sheridan

A new report on corruption and the World Bank depicts an organization still struggling to find itself.

In a world of cheap credit and double-digit growth in China and India, the role of the World Bank had been a subject of some concern even before Paul Wolfowitz's brief and unhappy tenure as president. The scandal over Wolfowitz's perceived favoritism toward his girlfriend and his subsequent resignation served to expose those worries and cast an ironic note over the ongoing investigation into the Bank's anticorruption efforts. Paul A. Volcker, the former chairman of the Federal Reserve and the head of the Bank investigation committee, released a report last week that argued for greater transparency and a renewed push to prevent corruption in Bank projects. He spoke to NEWSWEEK's Barrett Sheridan about the report and the Bank's place in the world. Excerpts:

SHERIDAN: Many Bank staffers, including some on the board of directors, oppose fighting corruption. Why?

VOLCKER: I think the principal problem is that it's something [the World Bank] hasn't historically taken account of. I'm exaggerating a bit, but up until 10 years ago they did not officially recognize corruption. When it comes to corruption in their own programs, it's obviously an uncomfortable situation.

Wolfowitz made corruption a priority, but as your report indicates, corruption is a sensitive topic at the Bank. Do your findings vindicate his efforts?

There were great complaints and uneasiness about his operating style and the way he went about it, not just in corruption but in other areas. It was an unfortunate combination of circumstances where discontent with his management got all mixed up with the anticorruption effort.