Anatomy of a 'bribe'
The World Bank calls it a bribe, but consultant Seydou Idani says it's nothing more than a loan.
In 2004, the World Bank, a development bank controlled by 184 member countries, permanently barred Idani and his company in Burkina Faso—an impoverished nation in West Africa—from doing business with the institution. To understand how the bank came to debar Idani, U.S. News dissected several internal and public bank documents and spoke with people familiar with the investigation.
The 2004 annual report of the World Bank's investigative unit, known as the Department of Institutional Integrity, says internal bank auditors had informed the unit about irregularities on a bank-financed project. After a detailed investigation by the unit, "the bank terminated a staff member for accepting bribes from a consulting firm in exchange for influencing the retention of a consultant on a bank-financed project," it says. The investigation "established that the staff member, acting in the capacity of task manager, used a middleman to facilitate the transfer of illicit payments between the consultant and the staff member," says page 27 of the report.
While the annual report doesn't name the participants, people familiar with the investigation say the middleman described in the report was Seydou Idani; the consulting firm was an accounting firm, De Chazal Du Mee, based in the small island nation of Mauritius in the Indian Ocean; and the staff member was Leslie Jean-Robert Pean.
Pean, a former midlevel manager at the World Bank, is now the subject of an investigation by federal prosecutors. An internal bank report details how Pean allegedly profited from his management of World Bank projects in Africa. Pean's lawyer describes the bank's allegations as "outrageous." (Please see the U.S. News story "Cleaning Up the Bank" for more about Pean and his lawyer's response.)
The bribe discussed in the annual report was in connection with a contract award given to DCDM on a World Bank-financed infrastructure project in Guinea Bissau, a small country in West Africa, according to an internal bank documents and people familiar with the investigation.
An internal investigative report says that Robin Harel, co-managing partner of DCDM, told investigators that in 1994 he met Idani in Burkina Faso and agreed to pay him 10 percent of the value of any contract he produced for the firm. Harel told investigators, as quoted in the report: "Idani must have told us that his fee would be shared with others because this is the way business is conducted in Africa." It was clear from the context of the comments, says the report, that Harel was referring to the need to make payments to government officials.
Harel said that in 1995 Idani "obtained" a $580,000 contract for DCDM to train entrepreneurs on the Guinea Bissau project. Almost immediately there were complaints about the poor quality of the training, the internal report says. In the midst of the complaints, witnesses told the bank that a DCDM partner gave $15,000 to Idani in 1996. "The circumstances and timing of the payment suggests very strongly that it was a bribe to retain the contract in the face of complaints about the quality of DCDM's work," it says. A DCDM accounting manager, according to the report, said the fee, paid in traveler's checks, was "unusual."
After being pressed by bank investigators, DCDM cooperated with the inquiry, according to people familiar with the bank investigation. The company turned over its records, including documentation that $12,000 of the $15,000 in travelers' checks had been given to Pean by Idani.
Idani acknowledged he had been barred from doing business with the bank in October 2004, but denies acting improperly. He told U.S. News the he never served as an intermediary for DCDM to transmit any money to Pean. Idani said the money he received from DCDM was simply due as part of his consulting contract with the company. He says the money he gave to Pean was to repay a loan, nothing improper. "If Mr. Pean cashed a portion of these checks in the amount of $12,000, it is because I had given him the checks in return for money he had advanced me when I badly needed cash," he told U.S. News.
Robin Harel told U.S. News that DCDM fully cooperated with bank investigators, allowing them access to company files.
"We never gave a bribe to Pean. We never met Mr. Pean," he said. "Idani was a representative in this African region, but this arrangement was severed a long time ago." DCDM was never barred from the bank.
Wayne H. Rusch, a Washington-based lawyer who represents the company, told U.S. News that the bank sent the DCDM a letter saying it would not take any action against it.
Postscript: Idani now runs a technology consulting company out of Burkina Faso. A list of client references on his company's website includes the Peace Corps.