After first being covered in the blogosphere, Bruce Tasker’s allegations of corruption in a World Bank project in Armenia have now hit international headlines with the U.K.’s The Observer carrying a story today. Interestingly, Tasker appro…

Sunday September 30, 2007
The Observer
Britain is urging the World Bank to investigate allegations of corruption and embezzlement in a $35m (£17m) water project in Armenia, which the Washington-based body says are only of ‘medium priority’. Bruce Tasker, a British whistleblower, says he has presented the bank with evidence of large-scale fraud in a project to improve the water supply in the Armenian capital Yerevan, but it has so far refused to carry out a full-blown investigation.
With its conciliatory new boss Robert Zoellick at the helm, the World Bank is keen to make a fresh start after the humiliating departure of Paul Wolfowitz earlier this year. Wolfowitz stormed into the bank promising to crack down on corruption, but ended up being embroiled in an ethics scandal of his own concerning lavish pay rises for his girlfriend, Shaha Riza.
Persuading the world’s richest countries that their taxpayers’ money is being well spent is a critical part of Zoellick’s job, but the Armenian case is just one of a backlog of allegations waiting to be examined by the Bank’s Institutional Integrity Department - or INT, as it is known.
INT wrote to Washington-based pressure group the Government Accountability Project (Gap), which is backing Tasker’s claims, saying the case was ‘rank ordered “medium” priority, and as such remains in a queue pending the availability of investigative resources’.
The British Ambassador in Armenia has written to the World Bank, urging it to carry out a full investigation.
‘We’ve run into a wall,’ said Gap’s director, Bea Edwards. ‘We have extensive documentation. It involves high-level government officers, a lot of money and basic services. What else do they want? They’ve been completely unhelpful.’
She says the Armenian case is important, because it could point to potential problems in the way other World Bank projects are run, particularly in the former Soviet Union.
Tasker is a British engineer appointed by an Armenian parliamentary commission investigating the Yerevan scheme. He claims that as soon as he began to examine the details of the project, it became clear that it was riddled with corruption, ‘from start to finish, from top to bottom. The fact is it was not an isolated case of a few thousand dollars here or there, it was tens of millions of dollars.’
The original purpose of the project was to repair Yerevan’s pipelines, and improve the water supply to households, but he says that by the time the work got under way it had shifted to installing water meters instead.
Tasker claims contractors were able to pocket up to $10 profit on the sale of each meter by charging customers for installation. His commission was told that the average number of water meters per customer was 1.5.
The bank’s failure to pursue the allegations underlines the critical findings of a panel chaired by former Federal Reserve chairman Paul Volcker, which revealed serious weaknesses in the way the way INT investigates allegations of wrongdoing. INT is run by a Wolfowitz appointee, Suzanne Folsom. Volcker’s team found that the unit had achieved ’some notable successes’, but warned of ’serious operational issues and severe strains in relations’ with other parts of the bank, and said its work had sometimes contributed to ‘counterproductive relations’ with both donor and recipient countries.
Wolfowitz’s critics had accused him of cracking down hard on alleged corruption in countries where the US has a political axe to grind, but turning a blind eye to problems in more friendly regions of the world.
Jeff Powell, of pressure group the Bretton Woods project, said it was still too often left to politicians to decide which allegations to pursue. ‘This case is indicative of the fact that senior management and the board of the World Bank have not taken seriously the issue of corruption,’ he said.
A World Bank spokesman said he would not comment on a specific case.

[rest of comment deleted by administrator]

Adminstrator Response: Hovik, because in my opinion it was meant as an insult and would have resulted in more personal attacks, something which you seem keen on provoking. However, as such responses basically disrupt discussion on important issues, this comment is also edited out because you once again attempt to insult me as well as display what seems like bigotry and racism as well as profound lack of insight into anything relating to Armenia.

You remain on permanent moderation and I ask that you restrict yourself to reasoned arguments rather than knee-jerk discriminatory statements which display your profound lack of knowledge about Armenia and I suspect, anywhere else for that matter. By all means argue against points made on this blog and also by others who comment. However, as it stands you seem to delight in just picking fights with others.

As this is now getting to the point where it is seems designed to prevent any meaningful discussion on Armenia, I don’t think it will ever be possible to remove you from the moderation list. You have been on moderation for some time now because you are both confrontational and disruptive. Meanwhile, I also request that Armen keeps within the standard etiquette for internet discussion.

Armen, you’re not always like this, but I have had no choice but to put you on moderation because of the comments left on this post. If you can avoid such responses in the future, you’ll be taken off moderation, but I need to see that displayed in future comments. However, if it happens again I will have to also stick you on permanent moderation as well.

Onnik,
With respect to your posting about the interim report, which refers to the profits made through the sale of water meters:
At the time of that presentation, 30th March 2004, the Commission did not know that the water meters should have actually been purchased and installed free of charge, paid for by the World Bank Municipal Development Project credit, which of course was extended to the people of Armenia.
The World Bank implementation completion report gives 277,000 as the number of subscribers provided with water meters, and assumes one meter per consumer.
The international operator, A. Utilities, provided slightly different figures of 289,000 subscribers to the commission, and added that on average each subscriber had 1.5 meters , which extrapolates to 433,500 meters sold.
Each householder bought their meters for about $15 each, and paid about the same amount for the installation, a total of $30 for each water meter installed.
433,500 water meters at $30 each is a total of $13,005,000 that Yerevan’s subscribers paid, which should have been paid by the World Bank credit.

That point is covered in detail on my blog, where I use the World Bank figure of 277,000 households, at

Yerevan’s Twelve Million Dollar gift to A. Utilities

http://better-not-wb-the-wb.blogspot.com/2007/08/yerevans-twelve-million-dollar-gift-for.html

Bruce

It’s not just a matter of insulting each other. It’s also the matter of allowing a verbal fight to take place which will likely prevent the involvement of others with something constructive to say. So, that’s gong to be how it’s played out from now until both of you can agree to comment within the rules of standard blogging etiquette.

ARN
Marco Grigor died of a heart attack at his home he was 82.
Take you lies somewhere else.
http://www.presstv.ir/detail.aspx?id=20996&sectionid=351020105

Why, you [deleted by administrator] are developing a real reputation for you and tolerance. Congratulations.

ARN
I am Armenian born in the US right outside DC and currently living in the US - Myrtle Beach, SC. Parents both born in Aleppo and mother raised in Bourg
Hammoud.

As for the World Bank and the IMF, they’re there to turn Armenia into one big sweatshop.

ARN
Whatever [deleted by administrator].

That’s what “integrating the Armenian economy into the world economy” means.

ARN
Integrating the Armenian economy into the world economy means making Armenia prosperous.

I’m sorry you don’t understand that, but then again provincials have never been know for their insight. Now why don’t you go spend some quality time with your favorite sheep.

ARN
Provincials? [deleted by administrator]

I said I wan`t gonna post here no more but this [deleted by administrator] started spreading preposterous lies that Marco Grigor “left Yerevan black and blue” and started to attack the Armenian Qughgahsi.

As for the World Bank and the IMF, they’re there to turn Armenia into one big sweatshop. That’s what “integrating the Armenian economy into the world economy” means. I’m sorry you don’t understand that, but then again provincials have never been know for their insight. [deleted by administrator]

ARN
You! [deleted by administrator]. I made my point [deleted by administrator].

By the Way, it might be interesting for you to know that with respect to INT priorities, I should consider myself fortunate, the ‘LOW’ priority cases are simply filed with no further action.

Maybe I do have some kind of hope that an investigation will be carried out, if I continue to keep the pressure on. But when that might be is any body’s guess

Well I don`t have a smile on my face, I got a smirk.

Free Conference Call and Q&A

Wednesday, September 12th, 6:00 - 7:00 PM eastern

Featuring Rick Piltz, Director of Climate Science Watch and federal climate science whistleblower,
& Tarek Maasarani, GAP staff Attorney and co-author of Atmosphere of Pressure and Redacting the Science of Climate Change.

To register for this call, email Richard Kim-Solloway at richards@whistleblower.org
To listen to our previous calls, visit http://www.whistleblower.org/template/page.cfm?page_id=188

In 2005, GAP helped Rick Piltz – formerly a senior staffer in the U.S Climate Change Science Program - blow the whistle on the White House’s improper editing and censorship of scientific reports on global warming intended for the public and Congress.

GAP helped Rick release two major reports to The New York Times that documented the actual hand-editing by Chief of Staff Philip Cooney – a lawyer and former climate team leader with the American Petroleum Institute – thereby launching a media frenzy that resulted in the resignation of the “former” lobbyist, who left to work for ExxonMobil.

With Piltz’ leadership GAP has launched Climate Science Watch, a GAP program that reaches out to scientists, helps them fight off censorship, and brings to light the continued politicization of environmental science. He is also featured in the award-winning documentary, Everything’s Cool.

GAP also represented Dr. James Hansen, one of the world’s top climate scientists, who blew the whistle on NASA’s attempts to silence him. Hansen’s disclosures led GAP Staff Attorney, Tarek Massarani, to conduct a year-long investigation that found objectionable and possibly illegal restrictions on the communication of scientific information to the media.

His findings, summarized in the report Redacting the Science of Climate Change, included examples of the delaying, monitoring, screening, and denying of interviews, as well as the delay, denial, and inappropriate editing of press releases.

GAP also released a joint Atmosphere of Pressure report with the Union of Concerned Scientists (UCS) that combined GAP’s investigative reporting and legal analysis with the results of a UCS survey of federal climate scientists. The reports received broad national attention and have already been presented in testimony at two congressional oversight hearings.

Wolfowitz Ally at World Bank Draws Flak
By Bob Davis

Wall Street Journal, September 4, 2007, Page A2

WASHINGTON — In a sign of the deep divisions that still hobble the World Bank, a watchdog group that works closely with staffers said the bank’s antigraft unit is undermined by a conflict of interest at the top and by arbitrary rules.

The report by the Government Accountability Project criticized the director of the bank’s Department of Institutional Integrity, Suzanne Folsom, for also holding the job of counselor to the World Bank president. According to GAP, investigation corruption charges should be separate from the political advice a presidential counselor is expected to offer.

If the bank finds corruption in a project in India, for instance, it must decide whether to act because it could affect relations between the bank and the country, and also hamper the World Bank president’s ability to fund-raise globally for poor nations.

The head of the institutional-integrity department should concern herself only with the validity of the allegations, not with the political ramifications, GAP said.

The GAP report didn’t cite any examples of Ms. Folsom putting politics first, but said her joint appointment weakened the department’s reputation abroad and with staffers who doubted the department’s impartiality. “The director shouldn’t be in the position where she has to take into account institutional fund-raising or political issues,” said Beatrice Edwards, a GAP official who focuses on international institutions.

A spokesman for Ms. Folsom rejected the allegations and said the dual slots give Ms. Folsom more clout at the bank on anticorruption issues. “The director [of the department] reports to the president in order to ensure the independence of [the department’s] activities,” the spokesman said.

The GAP report comes at a time when the bank is trying to recover from the tumult caused by the resignation of the bank’s president, Paul Wolfowitz, who allegedly flouted World Bank rules while favoring his girlfriend, a long term bank employee. GAP released one of the documents that made the controversy public and is seen by some bank employees to protect whistleblowers.

Ms. Folsom, who has strong Republican Party ties, was an important ally of Mr. Wolfowitz who focused on anticorruption issues. Her allies view GAP as a part of a campaign to knock off a Wolfowitz partisan.

The new World Bank president, Robert Zoellick, is trying to rework the bank’s anticorruption strategy, which has been criticized as being plagued by politics and favoritism. Next week, a panel headed by former Federal Reserve Chairman Paul Volcker is scheduled to deliver its review of the institutional-integrity department.

The bad blood between GAP and the department reflects divisions generally within the bank as to whether the department is legitimately pursuing corruption cases or is playing favorites — and even leaking sensitive material, to the detriment of employees. The GAP report said the department, which has a budget of $13 million, has used different standards in investigating India, Cambodia, the Democratic Republic of Congo and Armenia. In some cases, investigators froze employees out of investigations; in other cases it ignored their complaints, the report alleges.

It also points to a high level of negative employee ratings at the department and high turnover rate as signs of harassment.

To its critics, the World Bank is a cushy place to work where employees don’t have much accountability. An integrity department spokesman said the department is trying to use proper standards on employee reviews, and that a higher attrition rate reflects outside demand for corruption investigator. He also said the department followed proper procedures in its corruption reviews.

The GAP has its own conflicts, the spokesman alleged, as it represents an employee in a proceeding against the department over Armenia.

However, Tasker is not an employee at GAP although they are his legal counsel. Tasker’s response to the Wall Street Journal article follows:

Dear Mr Davis,

I read with interest your article in the WSJ - ‘Wolfowitz Ally at World Bank draws flak’.

I would like to comment on your last statement, that GAP represents an employee in a proceeding against the department over Armenia.

GAP does not represent an employee, it represents a member of the international community, who in 2004 was Senior Specialist for an Armenian Parliamentary Commission, who managed a study into a World Bank funded Municipal Development Project, and who exposed major fraud and corruption and the embezzlement of Armenian state funds.

And the proceeding is not ‘against’ the department, it is in ’support’ of the departments efforts to reduce the level of corruption in World Bank projects.

That member of the international community, referred to by Mr. Wolfowitz as an ‘Individual’, prepared to help the World Bank protect its funds by reporting fraud and corruption in World Bank funded projects, has been the subject of World Bank reprisals because of reporting the findings of his Parliamentary Commission study to the Bank, and he is very grateful to the Government Accountability Project (GAP) for its support to his claim - submitted to the INT with a request for the INT to carry out an investigation.

The full details can be seen on: ‘Blowing the World Bank Whistle’

Maybe, if the INT ever looks upon Mr. Wolfowitz’s ‘Individuals’ as supporters, rather than opponents of its work, then the effectiveness of the INT operations could start to improve - to the betterment of the real beneficiaries of World Bank funded projects.

Yours Sincerely,

Bruce Tasker
Senior Specialist
CGHA Commission
National Assembly of Armenia (2004)

Armenia is fighting corruption, and the corruption in Armenia in nothing compared to the scale of corruption in England.

Well, I’ll say this for you, Hovik, you always manage to make people laugh and certainly put a smile on their faces. Despite corruption being a plague that afflicts every country, let me just put it like this. In England, I have NEVER come across one case of corruption that affected myself or my friends and family in over 25 years of living there. In Armenia, after only 10 years, I have experienced it on a daily basis. It is everywhere from the schools to the highest levels of government.

No wonder then that the United Kingdom ranks 11th in the Transparency International index for corruption with a score of 8.6 and Armenia ranks 93rd with a score of 2.9. Just so you know, the higher the score out of 10 the less corrupt a country is. So you can compare, the United States is at 20th position with a score of 7.3. Anyway, that there is economic growth is undeniable — just as is the case in other former Soviet republics. How that growth is distributed and whether it is sustainable in the long term is another matter.

However, that is not the point. The fact is that a parliamentary commission revealed widespread corruption in a World Bank project in an interim report that was openly reported on. No other report was published that challenged those findings. Instead, government ministers who are allegedly part of the reported misuse of WB funds rejected the findings with only words and no evidence or documents to back them up. Moreover, the WB has yet to act upon the allegations made by Tasker and others such as GAP have studied his documented evidence and believe that it is “compelling.”

Personally, I think the answer to all of this is very simple. Given that the allegations were mentioned yesterday in a report by a Washington-based body that scrutinizes the activities of the WB’s INT, an investigation should be launched in the near future. If there is nothing wrong in their projects in Armenia the matter could be quite easily cleared up. Indeed, as I’ve said on the blog many times, this is the crux of the matter. A parliamentary commission reported illegalities and abuse of funds in 2004, and nothing has been done since. That doesn’t seem quite right to me.

ARN
It tells me what it`s about. Armenia is The Caucasian Tiger.
Ooo and another thing. Armenia is fighting corruption, and the corruption in Armenia in nothing compared to the scale of corruption in England.

For those interested you can buy the book here for $30.oo

http://www.amazon.com/Caucasian-Tiger-Sustaining-Economic-Armenia/dp/0821368117