World Bank Corruption Scandal
Although the media here refused to cover this story when given the chance to some months ago, blogs were responsible for exposing allegations of corruption in World Bank projects in Armenia long before others did. In particular, allegations of corruption were first documented by British whistleblower Bruce Tasker on his own blog, Blowing the World Bank Whistle, and then here on Oneworld Multimedia.
Tasker set up his blog when news outlets here refused to cover the story at the beginning of the year although the former finally did so only after this blog brought the alleged scandal to greater public attention. Eventually, some media outlets here did follow suit, but many publications here and abroad were hesitant in taking material from yours truly when I approached them. Nobody wanted to get on the bad side of the World Bank.
However, New Internationalist published my short piece on Tasker and his battle with the World Bank at the end of October. Now, RFE/RL reports that the scandal has hit the big time in Yerevan. However, the World Bank continue to deny any wrongdoing. Time will tell.
A U.S. anti-corruption watchdog joined on Thursday a British whistleblower in accusing the World Bank of covering up what they see as gross misuse of a $30 million loan that was meant to upgrade Armenia’s battered water infrastructure.
The loan was part of a 1999 World Bank project designed to quickly improve supplies of drinking water in Yerevan. The Armenian parliament formed in 2003 an ad hoc commission to investigate the effectiveness of these and other large-scale infrastructure projects financed by Western donors.
In its first report made public in March 2004, the commission headed by deputy speaker Vahan Hovannisian concluded that the water scheme has failed to achieve its main objectives due to mismanagement and corruption among government officials and private firms. The report also deplored the fact that 27 percent of the World Bank funds have been spent on project management, overheads and logistics.
The World Bank dismissed the claims at the time, insisting that the project’s implementation has been a success. Earlier this year it was again put on the defensive by Bruce Tasker, a Yerevan-based British engineer who had participated in the 2003-2004 parliamentary inquiry as an expert. Tasker detailed those allegations on his website and effectively implicated the World Bank in the alleged corruption.
The allegations were picked up by the Government Accountability Project (GAP), a Washington-based group that specializes in whistleblower protection and scrutinizes World Bank projects around the world. It urged the bank’s Institutional Integrity Department (INT) to launch an official investigation.
The GAP’s international director, Beatrice Edwards, said on Thursday that she and Tasker spent the past two days meeting with U.S. and British diplomats and the head of the World Bank’s Yerevan office, Aristomene Varoudakis. She said the latter again denied any wrongdoing on the part of his lending institution.
“Mr. Tasker produced two documents that show quite clearly that there was corruption and fraud in the municipal development project, and we were told that these documents signified nothing of importance,” Edwards told a news conference in Yerevan.
“Mr. Vardoulakis told us to go to the Department of Institutional Integrity where we have already been,” she said, adding that the department has told the GAP that the fraud case is a “medium priority” for it. This means that the case will not be investigated by the INT anytime soon, she said.
[…]
Tasker claims that the installation of water meters was a major source of corruption among Armenian and foreign officials as well as private firms involved in the project’s implementation. He says local contractors alone were able to pocket up to $10 profit on the sale of each meter by charging customers for installation.
Veolia Eau, the French utility giant running the Yerevan network, now says that it will need a decade to ensure 24-hour water to the vast majority of local households. The operator argues that as much as 80 percent of drinking waters leaks out of eroding pipes before reaching consumers. The World Bank funds were supposed to significantly reduce the huge losses.
Anyway, all my posts on this alleged corruption scandal are here, while Bruce Tasker’s blog is here.
Nice piece of journalism, Onnik.! Congratulations! I wonder how big this could get and what the likely implications for WB could be in a country like Armenia?
Comment by kRoNstAdT — November 23, 2007 @ 8:40 pm
Aravot has just published a major article on the issue.
Comment by Observer — November 24, 2007 @ 2:36 pm
What I’m waiting to see is if the allegations and apparent lack of concern from the government even though it was a parliamentary commission which first raised the issue will be raised during the pre-election campaign.
Probably won’t, but it should be, I think.
Comment by Onnik — November 24, 2007 @ 4:35 pm
Not my piece on Tasker, but another article on the World Bank by someone else in the same publication.
http://www.newint.org/columns/currents/2007/07/01/world-bank/
Comment by Onnik — November 26, 2007 @ 1:22 pm
Onnik,
In November, Dr. Beatrice Edwards, Director of International Programs for the Government Accountability Project (GAP) came to Armenia to discuss how we can better impress upon the World Bank’s Department of Institutional Integrity (INT) the need to have our claim investigated.
Dr. Edwards also wanted to meet with Prime Minister Sargsyan, who had announced to the press that he was ready to re-open the matter, and with Vahan Hovhanissian, who in October, after three years of silence, admitted to the press that the findings of the study I managed for him in 2004, constituted a sound basis for a full criminal inquiry. Prime Minister Sargsyan still has not replied to my letter to him of the 15th October, and Vahan Hovhanissian could not find time for a meeting.
After nearly a year of indifference from the the various parties, together with GAP, we are now inviting signatures to a petition which GAP will submit 15th February to Robert Zoellick, World Bank President, requesting him to instruct the INT to Carry Out a Full INT Investigation
The support of your readers to this important action will be greatly appreciated.
Please follow the link below and Join the Petition
http://www.ipetitions.com/petition/FightingWorldBankCorruption/
Bruce Tasker
Blowing the World Bank Whistle
Comment by Bruce Tasker — December 27, 2007 @ 1:28 pm