BOGOTA, Colombia — 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.
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.
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.
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.
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.
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.
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
husband, Diego Solano, who was also implicated, is now the chief financial
officer of the New York Stock Exchange-traded company.
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.
no doubt that the IFC conspired against free competition and transparency,”
Pablo Robledo, the former antitrust regulator who led the probe, said in an
has been criminally charged, nor are there any indications that Guarín and
Solano financially benefited. But a judge in April asked Colombia’s attorney
general to investigate the couple in handing down an 11-year sentence against
José Melo, the CEO of the Aval unit in the consortium.
Melo’s trial, a former deputy transportation minister jailed for accepting
bribes testified that he was led to believe by Odebrecht’s country manager that
the company had already influenced the structuring of the bidding terms through
2016 plea agreement with the U.S. Justice Department, Odebrecht admitted to
paying almost $800 million in bribes to win contracts in 12 mostly Latin
time of the highway project, multinational companies were recovering from the
global financial crisis and wary of investing in a country where an armed
conflict with leftist rebels was still raging. The IFC’s mission was to help
the government attract as much interest as possible.
allegedly stood by as the husband’s employer actively sought to take advantage
of the conflict of interest, according to the antitrust agency’s findings.
Among other alleged improprieties was the organizing of a lunch between Guarín,
her husband and Melo. The meeting was to take place in January 2009 — weeks
before the bidding conditions were made public.
contacts continued after the monthslong tender process officially got underway.
That’s when, according to the antitrust regulator, strict rules were in place
to make sure communications with the government or its advisers were
transparent and all bidders had equal access to information.
during this period that Guarín in an email urged the government to lower the
collateral requirements for bidders. She argued that she was informed privately
by an Odebrecht executive that the high amounts represented a “deal breaker.”
later, the requirements were changed.
gold standard that should characterize the IFC’s behavior in accordance with
the World Bank’s code of ethics clearly was not followed,” said Camilo Enciso,
a criminal lawyer and director of the International Anti-Corruption Institute,
who reviewed the documents in the case at the AP’s request. “The couple had a
clear stake for their careers in the success or failure of this project.”
conflicts of interest “were everywhere,” he added, citing the use of
confidential information, influence peddling and favoritism, among others. “The
IFC should have known better.”
and Solano declined to comment. But in case filings both rejected the allegations
of a conflict of interest. While Solano argued that he took steps to insulate
himself from the bidding process, Guarín said the lowering of the financial
guarantees benefited all bidders and reflected longstanding concerns across the
it was cooperating with authorities but declined to comment further.
also rejected the accusations, saying that Guarín was hired before it was known
who the bidders would be and because of her expertise in the infrastructure
sector. She was member of an extensive team and did not have a managerial role.
also said it notified the government and put in place safeguards to prevent any
conflict of interest once news reports in July 2009 indicated Aval would take
part in the bidding process. That was more than 20 months after the IFC started
advising the government.
is the norm in these projects, IFC only served in an advisory capacity while
the ultimate decisions regarding the project structure and the awarding of the
concession contract rested exclusively with the Colombian government,” the IFC
said in a statement.
safeguards included preventing Guarín from playing any role in the bid
But in a
September 2009 public hearing, Colombia’s then-Transportation Minister
expressed surprise upon hearing of Guarín’s marriage to an Aval executive in an
anonymously written complaint that described the relationship as a “perfectly
camouflaged conflict of interest.”
Cabello, head of the IFC’s advisory services in Latin America, said the
organization had taken unspecified steps from the outset to mitigate any
possible negative effects arising from Guarin’s marriage, according to a
transcript of the hearing.
vowed to answer the “innuendo” in writing — although there’s no record the IFC
did so publicly until almost eight years later, in response to a magazine
column. In the 2017 statement, the IFC said it flagged the issue to the
government a month before the hearing in coordination with an IFC department
charged with managing potential conflicts.
like the IFC, “downplayed what took place and provided impertinent excuses that
didn’t address the heart of the complaint,” the antitrust agency said in the
168-page report issued in September.
antitrust agency said the IFC refused to cooperate with its investigation,
citing its immunity from judicial processes as an international organization.
As such, it concluded that no action was taken to address the conflict.
claims it volunteered to work with the government to clarify circumstances
related to the project. Meanwhile, an attorney for Aval has accused the
regulator of abusing its authority by accessing company emails without a court
order and questioning Solano without a lawyer present. Colombia’s ombudsman has
launched an investigation against Robledo in response.
after the hearing, Aval sent a letter to the government stating that Solano,
then a senior executive, did not play any role in the process, despite emails
suggesting he had had.
in a filing said his involvement was limited to helping structure a memorandum
of understanding with Odebrecht and measuring the potential impact of a winning
bid on Aval’s finances. He also said the antitrust regulator ignored an August
2009 email in which he explicitly asked Melo to refrain from sending him
confidential information about the offer.
emails show that Aval’s president, Luis Sarmiento, the son of Colombia’s
wealthiest man, was aware of the issue and urged caution so that a winning bid
would not be undone by a lawsuit.
the risks, the lobbying effort appeared to pay off, according to the antitrust
results of the bidding were announced Dec. 14, 2009, the only two other
competitors were disqualified on technical grounds. The Odebrecht-Aval
consortium was awarded the contract for about $1 billion, just below the
maximum allowed, suggesting it did not fear being outbid.
later when Melo retired, he sent a farewell email to his colleague Solano.
“Please send my regards to Maria Victoria,” he wrote, “she’s secretly always
been our booster.”
***Joshua Goodman on Twitter: https://twitter.com/apjoshgoodman