However, a month later, the prosecutor's office said it had yet to receive the IDB referral. Some bank insiders say there is a move afoot to delay doing so until the furor dies down, and then to let the matter quietly drop [see "IDB Frustrates U.S. Justice," posted Jan. 15 on Insight Online]. These sources say there is concern that the longtime bank staffer accused of receiving the kickbacks might spill what he allegedly knows about other wrongdoing at the IDB, or that the prosecutor's office will use the referral to convene a grand jury looking into other corruption issues there.

Questions also are being raised by independent watchdog groups about Iglesias' rebuttal of other allegations of corruption Insight brought to light concerning IDB-funded projects [see "Corruption Corrodes Development Banks," Oct. 15-28]. Iglesias admitted that problems had occurred in Nicaragua and Argentina; however, he argued that corruption issues there were minor. More serious, however, was Iglesias' suggestion that the Auditor General's Office, headed by the septuagenarian William Taylor, had not received any allegations about corruption in the Ecuadoran sanitation program, and that allegations about the Colombian projects were "unfounded."

In response to the Colombian case, Bea Edwards of Public Services International, a trade-union group responsible for making the allegations, commented: "It is unclear to us how the auditor general reached the conclusion that our allegations were unsubstantiated. He never requested documentation, nor did he contact complainants. Hearings were never held. In short, either the investigation conducted was so narrow in scope as to exclude any potentially damaging information or evidence, or there was no investigation at all."

In the case of Ecuador, Iglesias' memorandum denied a problem that other IDB officials were promising to investigate. On Jan. 10, Stephen Abrahams, executive secretary of the IDB Oversight Committee on Fraud and Corruption, wrote Edwards about Ecuadoran water projects receiving nearly $4 million in financing from the bank's Multilateral Investment Fund (MIF). Edwards had complained that state workers displaced through an IDB-supported privatization scheme had been promised retraining through a nonfunctioning private foundation and that financial audits of the program were withheld from those workers. Abrahams promised Edwards that Donald F. Terry, the MIF manager, would investigate the allegations.

Martin Edwin Andersen is a reporter for Insight. Readers can reach him with tips on governmental waste, fraud and abuse of power at InsightWatchers@aol.com.