Jose Fourquet, the U.S. executive director at the Inter-American Development Bank (IBD), has declared victory in the case of a U.S. businessman who claims he was defrauded after participating in a bank-sponsored project in Panama. However, Fourquet's claims, trumpeted in a letter to Sen. Paul Sarbanes (D-Md.) obtained by Insight, have not convinced Steve Worth. His company still languishes after a controversial IDB internal audit of Worth's charges found that the IDB is without fault in its treatment of the matter. 

Worth's accusations that the IDB was party to contract fraud, cronyism and other abuses were first reported last December [see "Business Gets Murky With IDB," Dec. 10-23, 2002]. In a letter dated Dec. 13, Sen. Barbara Mikulski (D-Md.), a member of the Senate Appropriations subcommittee on Foreign Operations with jurisdiction over multilateral-development banks, demanded that IDB President Enrique Iglesias answer questions about allegations of corruption at the bank [see "Mikulski Demands Answers From IDB," Dec. 18, 2002]. Mikulski noted that Worth's Plexus Consulting Group LLC, a Washington-based firm, had encountered "a number of problems" in providing services to an IDB-financed project in Panama

Two months later, on Feb. 19, Sarbanes also wrote to Fourquet about Worth's allegations, which were on the eve of being dismissed by the internal IDB investigation Worth and others say was fraught with irregularities. Within weeks of the Sarbanes' letter, the bank informed Worth that its own inquiry into his complaints -- about alleged IDB collusion in the fraud and failure to maintain arms-length relationships in both the Panama-based project and its subsequent investigation -- were without merit.

In his Feb. 21 letter to Sarbanes, Fourquet recalled that, "as I promised you at my confirmation hearing, my goal is to make the IDB a model for accountability, transparency and effectiveness." The senior Treasury Department official claimed that his office had engaged in "strong advocacy" in the Plexus case. Fourquet, a former CIA official, also said that the IDB auditor general's office, itself the object of questions over alleged irregularities in the investigation of the Plexus matter unmentioned in the letter to Sarbanes, would be giving Plexus a copy of the report "soon."

"Given this and other similar cases involving U.S. companies, our office is leading a total overhaul of the IDB's procurement process," said Fourquet, who earlier this year was chosen by the prestigious World Economic Forum for its "Global Leaders for Tomorrow Program" for 2003. "One of our top priorities is to support U.S. firms seeking a fair and transparent business relationship with the IDB," he said.

In a recent interview with Insight, Worth called into question Fourquet's claims of assistance. Worth said he was "greatly disappointed by the lack of services from an office that I had understood was meant to service the U.S. business community."

Worth said that the Fourquet letter made it sound as if Plexus' plight was the object of continued, sustained concern from the U.S. office. He noted, however, that Fourquet made no mention of the issues raised about the role played by the auditor general's office in the investigation. "I have been told that that office has spent more time trying to track down which of its employees is talking to Insight than focusing on the serious questions that we have raised," Worth said.

Fourquet has not responded to several requests by Insight for an interview.

In a March 22 letter to Stephen Abrahams, head of a bank anticorruption unit, Worth complained about an "incorrect and misleading" letter the former had sent to him about his case five days earlier. Noting that Abrahams stated that IDB Deputy Auditor General Fernando Fernandez had offered Worth in a Dec. 16 letter a second chance to provide additional information for investigation by his office, the businessman recalled: "This is misleading. Our original letter to the auditor general in which we bring forth our claims was dated Sept. 12. We had no acknowledgement of our letter from the auditor general until the end of November. Then less than three weeks later -- Dec. 10 -- Mr. Fernandez sent me a letter in which he states that he 'is ready to conclude [his] investigation.'" 

"It is hardly believable," Worth told Abrahams, "that six days later, that Mr. Fernandez was no longer ready to conclude his investigation but was still open to the submission of new facts. But even if he were, as recently as Jan. 9, when my adviser Bart Fisher and I met with the auditor general, the auditor general would not tell us who his office interviewed or when or what documents his office reviewed. It is apparent now that the interviews and documents were chosen selectively in light of the information the auditor general wanted to find and that the investigation was heavily biased."

"Long-standing media reports of cronyism at the IDB," Worth concluded, "along with the false and misleading comments in your letter of March 17 lead me to believe our firm can expect no unbiased or even fair treatment in this matter."

The bank recently announced it will be holding a procurement workshop April 8-9 at its Washington headquarters, just two blocks from the White House. "As you know, the IDB is the largest multilateral provider of development financing for Latin America and the Caribbean, with cumulative lending exceeding U.S. $100 billion," wrote Marcos D. Lorenzo, a bank public-information officer. "The pipeline includes over (sic) $6.3 billion in lending for projects in these sectors, thus creating business opportunities in the form of approximately 6,000 contracts per year for goods and services."

Perhaps not surprisingly, Worth told Insight that he would forgo attending the workshop.

Martin Edwin Andersen is a reporter for Insight.