BOGOTA, Colombia (AP) — María Victoria Guarín was a key adviser on Colombia’s biggest-ever transportation project: a 1,000-kilometre highway across mountainous terrain connecting the capital to busy Caribbean ports.
As an 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.
That 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.
The Grupo Aval conglomerate that employed Guarín’s husband was partnered with Odebrecht, the Brazilian construction giant that has admitted to paying USD6.5 million in bribes to seal the deal — one of dozens of projects it now acknowledges winning through illegal payments.
The 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.
The 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.
In an 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 USD2.6 billion contract in favour of her husband’s employer.
Her husband, Diego Solano, who was also implicated, is now the chief financial officer of the New York Stock Exchange-traded company.
If the civil charges of taking advantage of a conflict of interest and improper contacts are sustained, Guarín faces a fine of up to USD1 million. Aval and its subsidiaries are on the hook for USD150 million.
“There’s no doubt that the IFC conspired against free competition and transparency,” Pablo Robledo, the former antitrust regulator who led the probe, said in an interview.
No one has been criminally charged, nor are there any indications that Guarín and Solano financially benefitted. 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.
During 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 Guarín.
In a 2016 plea agreement with the United States (US) Justice Department, Odebrecht admitted to paying almost USD800 million in bribes to win contracts in 12 mostly Latin American countries.
At the 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.