Corporate lobbying at the Bank exposed

15 March 1999

A recent article in the Legal Times alleges that there is significant corporate lobbying of the World Bank. The Bank lends $25 billion per year to back Southern government projects and economic policies, much of which returns to the North as consultancies or construction contracts. The Bank claims that its bidding procedures shield it from sharp practice yet, as Legal Times author Sam Loewenberg exposes:

Washington, where there is money, there are lobbyists – the World Bank is a magnet for private-sector advocates seeking to shape publicly funded projects, who form a complicated and diffuse system to influence trading that operates largely out of public view.”

Commercial lobbyists may go direct to the Bank, or failing that, via the US Government. The consortium of Exxon, Shell and Elf which wants the Bank to back its proposed $3.5 billion Chad-Cameroon oil pipeline project has tried both. With the project under fire from NGOs, Exxon has been trying to shore up support for the project in meetings with senior Treasury and State Department officials. Exxon lobbyists have also met Bank’s executive directors, according to World Bank officials familiar with the project.

Other strategies include organising meetings between Bank staff and company officials about technological developments in the auto sector: while selling Daimler buses was the real, unstated goal. Another company which supports Sun Microsystems Inc is trying to influence the choice of consultants for a project in Bolivia, hoping they will frame bid specifications that will help their client win multi-million dollar business.

This field provides lucrative opportunities for former Bank officials. Former Bank procurement chief Donald Strombom set up International Development Business Consultants, while Moeen Qureshi, former prime minister of Pakistan runs Emerging Markets Partnership and E. Patrick Coady, a former U.S. executive director of the Bank runs another such company.

Despite talking ever more boldly about corruption and institutional rules for other people, the Bank apparently has no guidelines on appropriate conduct in this area.