World Bank unit implicated in Latin America graft scandal
04 Jul 2019

AP — María Victoria Guarín was a key adviser on Colombia’s biggest-ever transportation project: a 1,000-kilometer (620-mile) highway across mountainous terrain connecting the capital to busy Caribbean ports.

As an investment officer for a World Bank unit, it was her job to help the government set the terms for competitive bidding by contractors. It turns out she was also married to a senior executive of a company that won part of the very contract she helped to oversee.

That apparent conflict of interest has now dragged the bank into the edges of Latin America’s biggest corruption scandal, as revealed in a little-noticed report issued last year by Colombia’s anti-trust agency.

The Grupo Aval conglomerate that employed Guarín’s husband was partnered with Odebrecht, the Brazilian construction giant that has admitted to paying $6.5 million in bribes to seal the deal — one of dozens of projects it now acknowledges winning through illegal payments.

The scandal upended the region’s politics, leading to the jailing of dozens of senior politicians. But the role played by the World Bank in advising governments during the graft-ridden infrastructure boom of the past decade has received far less attention.

The private-sector arm of the World Bank, known as the International Finance Corporation, or IFC, is supposed to reduce poverty in the developing world by promoting private investment.

In an antitrust administrative complaint filed in September against Guarín and several others, the IFC is accused of failing to act on Guarín’s potential conflict of interest for nearly two years, even as she allegedly tilted the bidding process for part of the $2.6 billion contract in favor of her husband’s employer.

Her husband, Diego Solano, who was also implicated, is now the chief financial officer of the New York Stock Exchange-traded company.

If the civil charges of taking advantage of a conflict of interest and improper contacts are sustained, Guarín faces a fine of up to $1 million. Aval and its subsidiaries are on the hook for $150 million.

By Joshua Goodman, AP, 2 July 2019

Read more at the Associated Press

Photo (cropped): AgnosticPreachersKid [CC BY-SA 3.0], via Wikimedia Commons

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