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20/06/2003 | Bad Treatment Draws Scrutiny

Martin Edwin Andersen

Five Georgia congressmen, including a Republican deputy majority whip and members of the powerful Financial Services and Rules committees, have demanded answers about the treatment of an award-winning Atlanta businessman at the hands of U.S.-taxpayer supported multilateral development banks (MDBs).

 

In letters to senior officials at the departments of Treasury and Commerce, the bipartisan group requested a "full report" on the treatment by the banks of Ashford International Inc., a Georgia company once seen as an international model for providing developing countries with information technology [see "A 'Graveyard of Dreams,'" posted May 5].

"Throughout the 1990s, Ashford participated in a number of international procurement opportunities through the World Bank and the Inter-American Development Bank," note the letters, sent to Grant Aldonas, undersecretary for international trade administration at Commerce, and John Taylor, Treasury's undersecretary for international affairs.

"According to Ashford, a number of its efforts to have its bids fairly evaluated and its contracts properly enforced have failed. We are interested in these issues as they relate to the difficulties small U.S. companies may face when participating in World Bank and IDB procurement opportunities." Copies of an extensive affidavit from Ashford President Bernard van der Lande were included with the letters.

Members of the Georgia congressional delegation signing the letters include Deputy Whip Johnny Isakson, House Rules Committee member John Linder, Ways and Means Committee member Michael "Mac" Collins -- all Republicans -- and Democrats Denise Majette and David Scott.

Though a freshman, Scott is a member of the House Financial Services Committee, which currently is considering legislation that would give the MDBs virtual carte blanche to run their affairs for the next three years. The move comes even after a recently leaked internal World Bank poll showed that global opinion leaders thought the institution was "arrogant, too bureaucratic [and] not effective enough against corruption." The pending carte blanche for the international bankers, supported by ranking Democrat Barney Frank of Massachusetts, may be approved by the full committee as early as next week [see "Commentary: Lugar Drops Ball on Reform," posted June 12]. Issues such as those raised by van der Lande and other U.S. businessmen who have complained about bank practices apparently were not considered as the bill moved forward.

Ashford, which had already won Commerce's presidential "E" Award for Excellence in Exporting, was hailed as late as 1997 by then-president Bill Clinton in Brazil for promoting a "world-class" Brazilian-American technology partnership. In a letter to members of Congress, van der Lande noted that Ashford's annual sales had dropped from $25 million a few years ago to less than $1 million this year and was forced to shed 36 of its 40 employees. Much of Ashford's earlier business came from the MDBs, he said, and was promoted by the Commerce Department. The company's record of winning one out of every four bids it competed for suddenly nosedived as it was frozen out of doing further business with both the World Bank and the IDB.

Van der Lande pointed out that the reasons given for Ashford being disqualified ranged from bank-sponsored projects not accepting U.S.-audited balance sheets or IRS papers as proof of payment of taxes to tactics such as changing specifications after bids were opened. Recently, senior IDB officials told van der Lande that the "case was closed" on his demand for an effective audit, as it was not considered compelling.

"Because Ashford followed the rules of the multilateral development banks but appeared to be frozen out of new business," van der Lande reported, "it seeks a comprehensive review of its cases by the appropriate federal agencies." He added: "Today, Ashford International doesn't participate in new bids for multilateral-development-bank business and is seeking other opportunities. But the big question remains: What happened to thwart a growing company that was playing by the rules set up by the bid backers, the multilateral development banks?"

An IDB whistle-blower has alleged to Insight that what van der Lande experienced was no surprise, given that contracts for MDB-funded business in Brazil often were unofficially decided before the bidding process actually took place. He said that "competing" bids were sought to make it appear that competition was taking place when the winner had been preselected.

Martin Edwin Andersen is a contributing writer for Insight.

Insight Magazine (Estados Unidos)

 


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