Page 12 - ARUBA TODAY

A12 WORLD NEWS
Wednesday 3 July 2019
World Bank unit implicated in Latin America graft scandal

By JOSHUA GOODMAN structure sector. She was
Associated Press member of an extensive
BOGOTA, Colombia (AP) — team and did not have a
María Victoria Guarín was a managerial role.
key adviser on Colombia's The IFC also said it noti-
biggest-ever transportation fied the government and
project: a 1,000-kilometer put in place safeguards to
(620-mile) highway across prevent any conflict of in-
mountainous terrain con- terest once news reports
necting the capital to busy in July 2009 indicated Aval
Caribbean ports. would take part in the bid-
As an investment officer ding process. That was
for a World Bank unit, it more than 20 months after
was her job to help the the IFC started advising the
government set the terms government.
for competitive bidding "As it is the norm in these
by contractors. It turns out projects, IFC only served in
she was also married to a an advisory capacity while
senior executive of a com- the ultimate decisions re-
pany that won part of the garding the project struc-
very contract she helped In this June 12, 2019, photo, a man walks past an entrance to the International Finance Corpora- ture and the awarding of
to oversee. tion, a unit of the World Bank Group, in Washington. the concession contract
That apparent conflict of Associated Press rested exclusively with the
interest has now dragged Colombian government,"
the bank into the edges no, who was also implicat- At the time of the highway A month later, the require- the IFC said in a statement.
of Latin America's biggest ed, is now the chief finan- project, multinational com- ments were changed. The safeguards included
corruption scandal, as re- cial officer of the New York panies were recovering "The gold standard that preventing Guarín from
vealed in a little-noticed re- Stock Exchange-traded from the global financial should characterize the playing any role in the bid
port issued last year by Co- company. crisis and wary of invest- IFC's behavior in accor- evaluation process.
lombia's anti-trust agency. If the civil charges of taking ing in a country where an dance with the World But in a September 2009
The Grupo Aval conglomer- advantage of a conflict of armed conflict with leftist Bank's code of ethics clear- public hearing, Colombia's
ate that employed Guarín's interest and improper con- rebels was still raging. The ly was not followed," said then-Transportation Minis-
husband was partnered tacts are sustained, Guarín IFC's mission was to help Camilo Enciso, a criminal ter expressed surprise upon
with Odebrecht, the Brazil- faces a fine of up to $1 mil- the government attract as lawyer and director of the hearing of Guarín's mar-
ian construction giant that lion. Aval and its subsidiar- much interest as possible. International Anti-Corrup- riage to an Aval executive
has admitted to paying ies are on the hook for $150 The IFC allegedly stood by tion Institute, who reviewed in an anonymously written
$6.5 million in bribes to seal million. as the husband's employer the documents in the case complaint that described
the deal — one of dozens "There's no doubt that the actively sought to take ad- at the AP's request. "The the relationship as a "per-
of projects it now acknowl- IFC conspired against free vantage of the conflict of couple had a clear stake fectly camouflaged con-
edges winning through ille- competition and transpar- interest, according to the for their careers in the suc- flict of interest."
gal payments. ency," Pablo Robledo, the antitrust agency's findings. cess or failure of this proj- Richard Cabello, head of
The scandal upended the former antitrust regulator Among other alleged im- ect." the IFC's advisory services
region's politics, leading to who led the probe, said in proprieties was the orga- Potential conflicts of inter- in Latin America, said the
the jailing of dozens of se- an interview. nizing of a lunch between est "were everywhere," he organization had taken
nior politicians. But the role No one has been criminal- Guarín, her husband and added, citing the use of unspecified steps from the
played by the World Bank ly charged, nor are there Melo. The meeting was to confidential information, outset to mitigate any pos-
in advising governments any indications that Guarín take place in January 2009 influence peddling and sible negative effects aris-
during the graft-ridden in- and Solano financially ben- — weeks before the bid- favoritism, among others. ing from Guarin's marriage,
frastructure boom of the efited. But a judge in April ding conditions were made "The IFC should have known according to a transcript of
past decade has received asked Colombia's attorney public. better." the hearing.
far less attention. general to investigate the The contacts continued Guarín and Solano de- He also vowed to answer
The private-sector arm of couple in handing down an after the monthslong ten- clined to comment. But in the "innuendo" in writing —
the World Bank, known as 11-year sentence against der process officially got case filings both rejected although there's no record
the International Finance José Melo, the CEO of the underway. That's when, the allegations of a conflict the IFC did so publicly un-
Corporation, or IFC, is sup- Aval unit in the consortium. according to the antitrust of interest. While Solano til almost eight years later,
posed to reduce poverty During Melo's trial, a former regulator, strict rules were argued that he took steps in response to a magazine
in the developing world by deputy transportation min- in place to make sure com- to insulate himself from the column. In the 2017 state-
promoting private invest- ister jailed for accepting munications with the gov- bidding process, Guarín ment, the IFC said it flagged
ment. bribes testified that he was ernment or its advisers were said the lowering of the fi- the issue to the government
In an antitrust administra- led to believe by Odebre- transparent and all bidders nancial guarantees bene- a month before the hear-
tive complaint filed in Sep- cht's country manager that had equal access to infor- fited all bidders and reflect- ing in coordination with an
tember against Guarín and the company had already mation. ed longstanding concerns IFC department charged
several others, the IFC is ac- influenced the structur- It was during this period that across the sector. with managing potential
cused of failing to act on ing of the bidding terms Guarín in an email urged Aval said it was cooperat- conflicts.
Guarín's potential conflict through Guarín. the government to lower ing with authorities but de- Cabello, like the IFC, "down-
of interest for nearly two In a 2016 plea agreement the collateral requirements clined to comment further. played what took place
years, even as she alleged- with the U.S. Justice De- for bidders. She argued The IFC also rejected the and provided impertinent
ly tilted the bidding process partment, Odebrecht ad- that she was informed pri- accusations, saying that excuses that didn't address
for part of the $2.6 billion mitted to paying almost vately by an Odebrecht Guarín was hired before it the heart of the complaint,"
contract in favor of her hus- $800 million in bribes to win executive that the high was known who the bidders the antitrust agency said in
band's employer. contracts in 12 mostly Latin amounts represented a would be and because of the 168-page report issued
Her husband, Diego Sola- American countries. "deal breaker." her expertise in the infra- in September.q