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World Bank helped Sharif corruption probe

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    World Bank helped Sharif corruption probe

    The World Bank co-operated closely with the former government of Pakistan in a corruption investigation aimed at the regime's political enemies.

    The investigation - into alleged abuses in Pakistan's independent power sector - was ordered by Nawaz Sharif, the prime minister unseated last month in a military coup, who is facing criminal charges. Among the targets of the probe were Benazir Bhutto, Mr Sharif's predecessor; her husband, Asif Ali Zardari; Ibrahim Elwan, a former World Bank manager; and several Pakistani power officials.

    The inquiry was of vital interest to the World Bank. It had sponsored the development of a private power sector in Pakistan and had at risk about $1.2bn in loans and guarantees. James Wolfensohn, president, had committed the bank to a battle against corruption.

    Some of the bank's assistance to its client is detailed in a Pakistani document, obtained by the Financial Times. Headed by a Pakistani government seal and dated August 8 last year, it is signed by Khalid Aziz of Pakistan's Ehtesab (accountability) bureau, the agency responsible for the Pakistani investigation.

    The document, "International Criminal Co-operation with the World Bank", describes an offer from Mr Wolfensohn, in a letter dated July 17 1998, to help Pakistan in dealings with the independent power producers (IPPs).

    "The World Bank was prepared to re-allocate available funds under existing loans to Pakistan to finance technical, financial and legal consultants for the purpose so that the IPP issue is resolved," the memo says.

    The bank, through the London-based detective agency, Maxima Group, contacted Ehtesab to facilitate "closer collaboration between the government of Pakistan and the World Bank". Maxima Group was hired with PriceWaterhouseCoopers, the accountancy firm, to investigate the corruption allegations. The joint efforts of the bank and Ehtesab were made clear to Richard Ashby, a British project finance expert, who worked as a consultant on two separate private power projects in Pakistan. He was detained by Pakistani federal police on arrival in the country on August 17 last year and for more than a month was threatened and physically abused.

    He was questioned by two Maxima investigators, who advised him to tell his Pakistani "hosts" what they wanted to hear. He signed several statements implicating Mrs Bhutto, her husband and Mr Elwan. Once freed and out of Pakistan, he disowned the statements and said they had been made under duress.

    Mr Ashby said that, during his imprisonment, he was shown internal World Bank documents. One was a secret report of a 1994 bank probe into alleged wrong-doing by bank officials in connection with a pipeline built for the Hub Power Plant
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