WASHINGTON (TrustLaw) – Anna Bossman is anxious. Eighteen months into her job as Integrity and Anti-Corruption Director at the African Development Bank, her revamped investigations team has uncovered alleged corruption at a major international company.
The case is ready for review by the Sanctions Commissioner, a new post at the bank set up as part of a reorganization of how multilateral development banks pursue corruption cases. The post is expected to be filled later this month.
The AfDB’s decision on the case will have broad ramifications. The restructuring means that any sanctions against the firm would trigger similar bans on bidding for contracts at the four other multilateral development banks including the World Bank – a move Bossman worries will be politically contentious.
“I am girding my loins,” she said in a telephone interview from Tunis, where the African Development Bank (AfDB) is based.
“I am a little bit anxious because politically, it is a big one, and understandably people are going to be very nervous about it,” Bossman said. She gave no further details on the case, which she is said is one of two big ones ready for the Sanctions Commissioner.
Officials at lending institutions rarely talk publicly about the politics surrounding their lending decisions or the punishments they mete out for bribery, bid rigging or other corrupt activities. However, development experts frequently complain that all too often undue political influence - through the bank boards and through national governments - is exercised over decisions by multilateral development banks.
“Corporations accused of corruption often seek to mitigate possible consequences through their elected representatives in countries where they are based, or through the executive directors of multilateral development institutions,” said Raymond Baker, director of Global Financial Integrity, which advocates curtailing the flow of dirty money - particularly out of developing countries - from crime, corruption or tax evasion.
In a sign of how politics can weigh on lending institutions, Russia this week charged its former executive director of the European Bank for Reconstruction and Development with allegedly seeking a $1.4 million bribe from a Canadian oil company to support a $95 million loan. Yelena Kotova has said she is innocent and the victim of a politically motivated internal inquiry.
Bossman stressed that the African Development Bank’s board members do not involve themselves in her investigations of corrupt practices, but she said that when it comes to sanctioning wrong-doers, “of course, they will be looking at the size of the company.”
The case is the first of this size since the July 2012 reorganization at the AfDB, which separated its investigations division from the adjudication process, Bossman said. The restructuring mirrors similar reforms of anti-corruption procedures adopted by agreement amongst the multi-lateral development banks - the AfDB, Asia Development Bank, Inter-American Development Bank, the European Bank for Reconstruction and Development and the World Bank.
Undue political influence is a broad problem that Bossman confronts in her work, and it is an issue the lawyer is familiar with from Ghana, where she was the acting head of the Human Rights and Anti-Corruption Commission before her appointment to the AfDB in May 2011.
Contractors sometimes strike deals with public officials, promising them kickbacks in return for lobbying to help the firm win bids, she said. “Collusion is one of the most difficult things to prove, and it is what we find mostly,” she said.
These cases are particularly difficult to investigate if countries refuse to cooperate in the probe, she said. World Bank investigators say they face similar hurdles, and are sometimes even refused entry visas.
One of Bossman’s goals for 2013 is to strike a number of bilateral agreements whereby national governments will agree to cooperate with AfDB probes, sharing information from law enforcement, anti-corruption, tax agencies and other officials. Development banks have no national powers; they simply inform governments if they uncover any evidence of a public official stealing from bank projects, relying on them to prosecute the cases.
Another project for 2013 is data-mining. Bossman is examining whether there are any regional trends or sectoral patterns in corruption that might help guide the focus of her 10 investigators. Currently the AfDB keeps no figures on trends or even what percentage of its loans are investigated. Her department relies on tips from whistleblowers or suspicious activity reports turned up from audits or other activities.
Another part of her job is integrity education, inside and outside the bank, where she promotes the anti-corruption message in Africa amongst governments, bankers, companies and civil society groups by making the link between corruption, human rights and development.
Is it having an impact? On that score, Bossman has a long road ahead. “Honestly, I cannot say whether or not it is improving,” she said.