WB and scandal in Albania

TIRANA, Feb 10 – The world media is continuously referring to an alleged scandal involving a World Bank project in Albania and local authorities.
It has become a much contested political issue in the tiny Balkan country, but also an unprecedented case for the bank too.
It has come out now that there are two lines of corruption on the Jale village tourist project, one is with the World Bank and the other involving the Albanian authorities.
It has come out that managers at the World Bank have provided false information to the agency’s board of directors about a $39 million “coastal cleanup” project that led to the destruction and destitution of a powerless village in Albania in 2007 נand then spent nearly two years trying to cover it up, FOX News reported earlier this week.
In Albania, the issue has recently turned politically hot.
The political opposition is directly accusing Prime Minister Sali Berisha’s son-in-law who’s been in charge of the project.
Fox News continues to write that bank insiders also misled and stonewalled a panel of independent investigators commissioned by the board to investigate the scandal, according to the investigators themselves.
The FOX News considered the issue such a corruptive case as “one of the most damning independent assessments of the anti-poverty agency’s behavior in the bank’s 60-year history.”
The bank decided to temporarily suspend further disbursements of the loan for the project “due to certain outstanding policy and operational issues.”
Concealing data and dodging questions is now being called “an institutional and systemic issue” in a blistering 115-page report of the Albanian incident by the World Bank’s independent inspection panel, an investigative body created in 1993 by the board to try to ensure accountability in bank operations.
The panel’s chairman, Werner Kiene נa former U.N. World Food Program investigator and Ford Foundation official נtook what he called “the unprecedented step” of sending the board a six-page personal memo chastising the bank’s management and staff for having “hampered” and obstructed the probe.
It remains unclear just why the World Bank board (and the investigation panel) was misled נand who in Albania or perhaps even Washington may have benefited from misleading it.
In 2005, the World Bank only agreed to the financing after its board of directors in Washington was first assured that the Albanian government had reached an agreement on a “moratorium” on demolitions of the houses of the Jale residents.
That assurance came in the form of a critical sentence in what is known as a “project appraisal document” (or PAD) נthe key analysis from staffers that the World Bank’s board relies on before agreeing to finance any project.
The PAD included a statement that Albania’s government and the bank had reached an “agreement” that no structures would be demolished until “certain procedures and criteria” were in place to assist affected citizens.
But the statement was false. No such deal had been struck.
Bank officials made no mention that the written statement in the PAD was untrue.
The Albanian responsible for coordinating the World Bank-financed project was Jamarber Malltezi, an official with the country’s Ministry of Public Works נand the son-in-law of Prime Minister Berisha.
In March 2007, just weeks before Jale was demolished, Malltezi sent a letter to the head of the country’s “construction police” נon the official letterhead of the Bank-financed project, according to the panel’s report נdiscussing potential demolitions, “the importance of sustainable development” and the need for the police to act “as fast as possible.”
In a second letter, Malltezi stated that he gave the construction police a digital camera, GPS and computer “to control the situation in the field” נas well as vehicles (also financed by World Bank money) to transport and remove the debris after the demolitions.
On April 3, 2007, the villagers were notified that their houses would be demolished. They were given five days to appeal to a local court, which they did, but the construction police did not wait for the hearing. They surrounded the village and demolished the community, amid heart-wrenching scenes of screaming and resistance.
The bulldozings caused an immediate furor in the Albanian media and parliament with one politician after another arguing they were illegal under Albanian law.
Albanian authorities have said that the demolition was a must because of the World Bank project in the area.
Politicians argued the demolition was done on behalf of business interests close to Prime Minister Berisha. Both Berisha and Malltezi have denied the allegations.
In May 2007, two weeks after the demolitions, the World Bank sent a “fact-finding mission” to the village. But the team didn’t speak to any affected residents, and its report to senior management in Washington left out any mention of the furor in the local news media and in parliament.
The report also omitted the role of Malltezi in getting the Albanian police involved in the expropriations.
In September 2008, nearly 17 months after the demolitions, bank managers wrote a retroactive “corrigendum” (or correction) of the PAD נstating that Albania’s government would not agree to a moratorium on demolitions נand that such a claim had been “inadvertently” included in the original 2005 PAD.
“Mistakes were made,” said the bank in a statement made last week, and “ways to address the alleged grievances of those affected are under active consideration.” It added: “The World Bank is concerned about the errors that were made by World Bank management and staff in the context of the project. In accordance with our internal processes, the Bank is reviewing actions of its staff, and, if warranted, will take appropriate action.”
In Albania, meanwhile, Berisha accused the bank investigation panel of slandering his government with a report “full of falsities which come as a result of internal rivalries of certain groups inside the World Bank.” He added that the project and his government acted wisely in order to avert control of Albania’s southern coast from an unnamed “land mafia.”
“I express my contempt for the unscrupulous slander of the investigative panel in what they call an independent report, but which has been dictated by the Albanian land mafia,” said Berisha in a press conference on Sunday, adding that he had asked World Bank officials to probe the panel’s ties to organized crime.
On the other hand, the Jale villagers are awaiting the results of the World Bank investigation hoping to get any positive consequences.