Latest update April 23rd, 2024 12:59 AM
Jun 19, 2013 News
The Inter-American Development Bank (IDB) says it takes “very serious” claims of fraud and corruption and other prohibited practices involving IDB operations.
The IDB is investigating claims that Coordinator of the Citizen Security Programme, Mr Khemraj Rai, forged documents in order to bid for contracts. He then reportedly approved those contracts and collected millions of dollars through a bank account he set up.
“OII (Office of Institutional Integrity) received allegations of possible prohibited practices involving the Citizen Security Programme in Guyana and is conducting an investigation pursuant to its internal procedures,” Christopher Barton, a representative of the IDB told Kaieteur News.
“Because corruption undermines development, the IDB has adopted an anti-corruption framework that adheres to the highest international integrity standards,” said Barton, the Caribbean Department Liaison with the IDB’s Office of External Relations.
Under this framework, all IDB employees are required, and third parties are encouraged, to report allegations of prohibited practices to the OII, an independent office within the IDB.
Barton would not say what the scope and details of the investigations are at this time.
On Monday, Home Affairs Minister Clement Rohee said that Police action will have to await the results of the IDB probe.
“I don’t feel happy about it. It is not a good sign. It is just like if you are talking about corruption in the police force,” Rohee said.
IDB Country Representative Sophie Makonnen had denied comment, saying the investigation is ongoing.
The IDB investigation began when contractor Viddiadat Jaisari made the aforementioned allegations.
The contractor told IDB investigators that Rai had approached him so that the two of them could set up a company and bid for “outside jobs” that Rai would arrange. However, the contractor later said that Rai abandoned the idea saying that it would represent a conflict of interest.
The contractor was employed for several years with Rai when he managed the Basic Needs Trust Fund and the Low Income Settlement Programme. The latter programme was also funded by the IDB.
Reports indicate that things became sour last June when Rai asked the contractor to fix the roof of his horse stable. The roof was damaged by a squall. However, the involvement of one of Rai’s relatives led to a misunderstanding and the contractor was fired.
Shortly thereafter, the contractor decided to tender for projects on his own. When he went to the Bank to collect bank statements, he was asked if he wanted statements for both accounts. He was surprised, because he thought that the joint account with Rai was dormant, since Rai had said that they would no longer proceed with bidding for “outside jobs.” Those bank statements revealed that Rai received and withdrew over $7 million, without the contractor’s knowledge.
The contractor was employed as a construction supervisor from November 2011 and was being paid a monthly salary of $250,000. However, most of the work the contractor did was not supervising contracts in West Coast Berbice, but rather working from Mr. Rai’s own joinery shop. The furniture from that joinery shop was in turn being bought by the Citizen Security Programme.
The provision of goods and services ranged from building pavilions to building and furnishing centres, all under the Citizen Security Programme.
The Police’s Fraud Squad is investigating reports that at least five contracts were signed by Rai using the contractor’s signature. Those contracts were for the rehabilitation of community centres, which the contractor should have been supervising.
In most cases, the bid price came in just short of the amount required for special approval and so the contracts awarded under the contractor’s name never came in for close scrutiny.
The Citizen Security Programme was approved by the IDB seven years ago, and is ongoing. Part of the project was to promote social development in disadvantaged communities in Regions Four and Five. The IDB loan is for 40 years, with a 10-year grace period. Interest rates are one percent a year during the first decade and two percent a year thereafter.
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