- The Washington Times - Monday, October 4, 2004

MANILA — Officials at the Asian Development Bank have been stung by charges in a Senate hearing last week that the organization may have lost as much as $30 billion to corruption.

“There is no validity to that amount, which seems to be picked out of the air,” Jan van Heeswijk, the bank’s chief compliance officer, said yesterday. “Making such broad and unsubstantiated allegations is not helpful in the effort to tackle corruption.”

The Senate Foreign Relations Committee heard testimony last week from Environmental Defense, an activist group that often files lawsuits related to environmental issues. The organization’s senior attorney, Bruce Rich, told senators the Manila-based lending agency may have lost as much as $30 billion in its lending programs because of corruption.

“The Asian Development Bank has lent $105 billion, approximately, since its inception in 1966,” Mr. Rich said. “If 30 percent of ADB lending has succumbed to leakage over the years, that would amount to over $30 billion in stolen funds.”

At the hearing on combating corruption in the multilateral development banks, Mr. Rich called the bank’s anti-corruption measures “cosmetic” and urged the U.S. government to withhold funding from the bank, which makes low-cost loans to poor countries in Asia.

Similar charges were leveled at the Washington-based World Bank earlier this year by several U.S. lawmakers and academics who claimed that bank had lost more than $100 billion to corruption. At the time, World Bank officials said the estimate had “no basis in fact.”

Mr. van Heeswijk, the ADB’s compliance officer, said in Manila that the bank has an aggressive anti-corruption policy that has sanctioned or banned 218 companies and individuals from working for the bank.

The bank also works with poor countries in Asia to strengthen their governments’ ability to crack down on corruption, he said.

He said withholding funding from the bank would be counterproductive because its loans aim at reducing poverty, which in turn fights corruption. “The poor pay the highest price for corrupt practices,” he said.

“It is important to stay engaged in countries and convince them through dialogue of the need to tackle corruption issues,” Mr. Van Heeswijk said.

The ADB was established in 1966 to reduce poverty in the region. It is made up of 63 member countries, mostly from the area, and Japan and the United States are its largest donors. The bank lends roughly $5 billion per year for projects ranging from roads and bridges to educational assistance and nutritional programs for children.

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