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IDB investigating allegations of fraud under the Citizen’s Security Programmme – 14th Jun 2013

IDBAn IDB-funded project is under scrutiny after allegations of fraud were leveled against an official managing a division of the project. The Inter-American Development Bank sent investigators to Guyana from the United States who are looking at how an official of the Citizen Security Program may have developed allegedly a conflict of interest in the award and processing of contracts under his purview. The IDB investigating team was in the country for over one week.

A top IDB official indicated that the Bank takes seriously any allegation and when these specific allegations were made they were immediately dispatched to the Investigating team in the US. The allegations are that essentially, a company was set up to benefit specifically from the small contracts under 10 million Guyana dollars. In most cases the official who managed the contract from the funded project end also managed the bank account of the contracting company. One of the principals on the company’s bank account was the IDB-funded project official. The other principal made the allegations to the IDB after that person discovered that his company’s name was being used allegedly without his knowledge to bid for contracts. The company was awarded the contracts, which were sometimes executed by another of the whistleblower’s family, but the funds went into a joint account that was opened by the project official.

The project official had employed the whistleblower as a consultant to the Citizen Security Program. The whistleblower contended that he was never a signatory to the documents on which his name appears.  The documents included bids for the supply of various appliances, like TV sets, microwave ovens, freezers and other items, along with office furniture, all under the Citizen Security Program. In nearly all of the cases based on documents made available to this Newscast, the bid price came in a few thousand Guyana dollars under the amount that would require special approval. The provision of goods and services ranged from building pavilions to building and furnishing centers all under the IDB-funded program.

Under these projects, individuals and companies or entities go through an administrative process that permits the accused firms and/or individuals to respond to the allegations pursuant to the Sanctions Procedures in the Inter-American Development Bank. Sanctions are meant to prevent and deter fraud and corruption in IDB Group-financed activities according to the IDB.

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