Campaign Letters

May 2004 Campaign Letter

Patricia Adams

May 28, 2004

If the World Bank decides to bar Acres or other corrupt multinationals, it would be the biggest deterrent to corruption in the history of international development.

Last fall, I wrote to tell you and other supporters that our federal government was trying to protect Acres International, a Canadian multinational that had been convicted of bribery in the African country of Lesotho. Our government didn’t want Acres to lose out on lucrative World Bank contracts in the Third World, despite World Bank rules that require it to bar companies that are guilty of corruption. Our government also didn’t want to have its own role in this corruption scandal under scrutiny ‚Äì the person who arranged the African bribery payments was a Canadian official, appointed by the federal cabinet.

Probe International supporters responded magnificently, both with financial support and by writing letters to World Bank President James Wolfensohn. The letters were compelling and effective; they urged him to do the right thing and disqualify this convicted Canadian company from receiving future World Bank contracts. By all accounts, based on what we’ve heard from inside the World Bank, your letters were profound, timely, and welcome. The World Bank has reopened its investigation of Acres International and one other convicted multinational, just as your letters have requested, to determine if it should bar them from receiving future World Bank contracts.

If the World Bank decides to bar Acres or other corrupt multinationals, it would be the biggest deterrent to corruption in the history of international development. World Bank contracts are the bread and butter of many multinationals. As the world’s largest development agency and the standard setter for all others, a World Bank blacklisting could be the death knell for a corrupt company.

There is reason to think the World Bank will take this case seriously. The U.S. Congress has just joined in the effort to make the World Bank crack down on corruption. It has launched an investigation into corruption involving World Bank projects generally, and the Lesotho corruption case, in particular.

Because of the work that we have done on the case, the U.S. Senate Committee on Foreign Relations has invited me to submit testimony about Acres International for consideration in its deliberations.

Significantly, Senator Richard Lugar, the head of the committee, urged the World Bank to do more to prevent corruption, noting that Acres and the other two companies found guilty had not been debarred for violating the World Bank’s fraud and corruption provisions, and asking the World Bank whether it was also investigating previous World Bank projects on which these companies have worked.

In contrast to the U.S. Congress’s attempt to root out corruption and expose it to the light of day, the Canadian government seems determined to bury it deeper. Canada’s federal aid agency, CIDA, and Export Development Canada recently announced that they will continue to favour Acres with taxpayer-funded subsidies. Even more disturbing, Canadian government officials are showing utter contempt for the Lesotho judicial process by stating that they would not take any action against Acres based on its criminal conviction in the Lesotho courts. According to Rod Giles, the spokesman for EDC. “Had the case been heard in an Ottawa courtroom, there might have been a different outcome.” Other Canadian officials have made similar disparaging statements about the integrity of the Lesotho judicial system. In reality, it is the integrity of the Canadian system that is at doubt ‚Äì it was a Canadian federal cabinet appointee who had been making the bribery payments in Lesotho. The Canadian government refuses to clean up its own house.

Let us not forget the facts. Acres International was convicted of bribing a foreign official in the tiny African country of Lesotho, in order to obtain a World Bank contract in a $12 billion dam megaproject. Lesotho’s Appeal Court later affirmed the conviction, saying that Acres “motivated as it was by greed,” was properly found guilty for “this premeditated and carefully planned criminal act.”

The other important fact is that we can make a difference, as your letters to World Bank President James Wolfensohn have proven. As one letter put it, “I am outraged that … our government is trying to convince the World Bank to overlook the clear case of bribery committed by Acres International…. I therefore urge you to bar Acres and every other corporation guilty of corruption from any further contracts with the World Bank.”

Please do write to Mr. Wolfensohn to express your concerns, if you haven’t already done so. Consider also sending a copy to Canada’s Auditor General, Sheila Fraser. Your opinions matter. We are making progress, and may be near a historic breakthrough.

And if you’re able, please also help us reach more people with this urgent message, by sending us a generous, tax creditable donation today.

With very best wishes,

Patricia Adams
Executive Director

Contact information:
James D. Wolfensohn, President
The World Bank 1818 H Street, N.W.
Washington, DC 20433 U.S.A.

Please consider sending copies of your correspondence to:
Auditor General Sheila Fraser

and to me via e-mail:

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