Tuesday, May 30, 2006

Anonymous diplomat: "[WB's allegations] have triggered inquiries in the programs of other donors"

Tuesday, May 30, 2006

Gov't Says It Will Probe Use Of Bank Funds

By Phann Ana and Erik wasson
THE CAMBODIA DAILY


The government's National Audit Authority will investigate the misuse of World Bank funds in seven major development projects following the freezing of funds to Bank-funded projects worth $64.5 million at four government ministries.

"The Auditing Authority will investigate the use of World Bank funds and it will start soon with cooperation from World Bank," Ut Chhorn, chairman of the National Audit Authority, said Monday.

"Now we are working on auditing an [Asian Development Bank] loan for a rural road project but the results have not come out yet," he said.

Under pressure from the World Bank, Finance Minister Keat Chhon on May 22 froze funding for three projects: the Ministry of Land Management's $24.3 million land management and administration project, the ministries of Rural Development and Public Works' $20 million rural infrastructure project and the Ministry of Industry's $19.9 million provincial and peri-urban water and sanitation project

World Bank External Affairs Officer Kimberly Versak wrote late Monday that she was working on a response to requests for more details of its allegations of misprocurement and misuse of funds in a total of seven projects administered by the government.

The World Bank has not released the names of the companies, contracts or officials involved in the scandal.

Cheam Yeap, CPP lawmaker and chairman of the National Assembly's Banking and Finance Commission, said that government officials found guilty of wrongdoing would be prosecuted and that World Bank consultants must also be held accountable.

"If the auditing authority finds embezzlement or misuse of funds, they must be punished under the penal code by imprisonment," Cheam Yeap said.

"This time, no more forgiveness," he said, noting that the World Bank must also make public any wrongdoing committed by its own consultants.

"The World Bank consultants that oversee Cambodians for these projects...they cannot escape responsibility," he added.

On Sunday, Minister of Rural Development Lu Laysreng blamed an unnamed World Bank consultant for the problems that have embroiled his ministry.

Chhieng Yanara, the Council for the Development of Cambodia deputy secretary-general in charge of coordinating donor aid, declined to comment on the World Bank affair. Prak Sokhon, Council of Ministers secretary of state, said he was not aware of the problem. Information Minister and government spokesman Khieu Kanharith declined comment saying he was in Malaysia.

Details of the scandal must be released to the public and real action must be taken against those responsible, said Sam Rainsy Party lawmaker and National Assembly Foreign Affairs Commission Chairman Son Chhay.

"At least these three or four ministries should be thoroughly investigated and officials prosecuted. So far there has been a lot of talk but little action," Son Chhay said.

"In Vietnam they take getting money from the World Bank and other donors seriously," he said. "I have looked at how they are spending the money and they put it to better use, they use it to help their people. The Cambodian government is more corrupt.

Son Chhay also called for full disclosure from the World Bank on the details of its investigation into the seven projects.

"[The World Bank] used to say that they want to get the public involved more," Son Chhay said. "We are the parliament and our duty is to monitor the government. We need more information."

Kek Galabru, president of local rights group Licadho, said she had little faith that the National Audit Authority would conduct a proper investigation into the affair. She said she could not recall any officials ever being prosecuted for corruption.

Prime Minister Hun Sen's so-called "iron fist" campaign against judicial corruption led to a guilty verdict for several court officials in December, but they were all subsequently retried this year and acquitted.

"Someone needs to be prosecuted [for corruption]. Then maybe these officials would think twice or be more restrained," she said.

One foreign diplomat said on condition of anonymity that the World Bank allegations could have a major impact on Cambodia's dealings with donors.

"Already they have triggered inquiries in the programs of other donors. The Finance Ministry and other ministries are under a lot of pressure now from the Bank." the diplomat said.

"[We are] concerned about our own programs and are checking them," he added.

Previously, the World Bank identified misprocurement in a military demobilization project in July 2003. The government was forced to repay $2.8 million to the Bank, and the program to trim the nation's bloated troop ranks was halted.

In September 2005, the Bank announced that it suspected fraud and collusion in four other projects, though Bank officials released scant details to the public.

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