Osama casts his shadow at the IDB

Insight on the News, Dec 24, 2002 by Martin Edwin Andersen

Efforts to bring greater oversight to the megabillion-dollar operations of the U.S.-taxpayer-supported multilateral development banks [see "Business Gets Murky With IDB," Dec. 10-23, and "C0n'uption Corrodes Development Banks," Oct. 15-28] remain fraught with stumbling blocks, not the least of which are placed there by the U.S. Treasury Department. Amy Gray, who monitors the Inter-American Development Bank (IDB) for the Bank Information Center, a public-interest watchdog group, recently inquired as to how the IDB would be choosing its president for a new five-year term. She received an e-mall from Stephen Altheim, a Treasury liaison to the IDB, forwarding rules about the selection process established in 1972.

Altheim made no mention of a special meeting of its board of directors to be held the next day to select the new IDB president.

Although Altheim himself attended that meeting, he cloaked his subsequent apology to Gray for concealing that information in a national-security justification: "Since I saw no public mention in advance, I assumed (perhaps incorrectly) that there might be post-9/11 security concerns about meetings of the board of governors." At the November meeting, IDB President Enrique Iglesias, in office since 1988, unanimously was selected for a fourth term.

Oversight, not Osama bin Laden, is the real boogeyman for these bank officials. A former senior U.S. official at the bank notes that the IDB is "still very negligent" in its procurement practices. The IDB's practices lag far behind those that already are in place in some of its member countries, he says, and it has no clearly defined process to deal openly with disputes. Part of the bank's problems in living up to its anti-corruption promises, he says, are due to the complaints of countries such as Mexico and Brazil, whose representatives have held that imposing rules for greater transparency would violate their national sovereignty.

The two-time U.S. presidential appointee adds that, in the case of disputes or appeals by losers of contract bids, the IDB's procurement committee "just sits on [them] if they are sensitive." To his knowledge, no contractor ever had been barred from working with the bank for having violated IDB or national procurement regulations.

MARTIN EDWIN ANDERSEN IS A REPORTER FOR Insight. READERS CAN REACH HIM WITH TIPS ON GOVERNMENTAL WASTE, FRAUD AND ABUSE OF POWER AT INSIGHTWATCHERS@AOL.COM.