The World Bank defended its investigation process and the reports about alleged bid-rigging activities of Filipino firms it shared with the Philippine government.

In a statement released to the Philippine media, the World Bank said an internal document, the Referral Report—one of the several it has produced over the bid-rigging issue—was shared to the Philippine government so it could conduct its own investigation.

While the Bank initiated the investigation "to protect the funds entrusted to the Bank," it said the Philippine government has the discretion to investigate whether the country's own laws had been violated.

The Ombudsman is the special prosecutor that handles corruption cases against government officials.

Ombudsman Merceditas Gutierrez claimed at Thursday’s senate hearing, however, that she did not receive additional assistance from the World Bank after receiving the 9-page Referral Report.

The World Bank said it had provided additional document to the Ombudsman and even offered to assist in them in their investigation.

Subpoena

Bert Hofman, World Bank country director for Philippines, February 12, 2009

Senator Miriam Santiago, who is heading the inquiry, said she had written to World Bank Country Director Bert Hofman asking him to hand over a copy of the internal report blacklisting three Filipino and four Chinese firms it accused of bid rigging.

It has been alleged in the purported report that the First Gentleman Jose Miguel Arroyo received bribe money from one of the Filipino firms to influence the bidding.

President Arroyo’s husband, a lawyer, has written to the Senate saying he is being used as a "side show" by his detractors.

Hoffman for his part supposedly replied that "our report cannot be shared with the Senate."

"How dare Mr. Hofman say that there is corruption in the Philippines (and refuse) to give us at least the original document?" Santiago said.

"According to the rules of court that is the best evidence," she said.

Santiago also accused the World Bank of "double speak" by charging corruption but not cooperating in the probe and called the institution "a squatter in Philippine territory."

"Mr. Hofman must come here (to the Senate) or else we'll cite him for contempt," she said, warning that the Senate could jail Hofman until he cooperates.

The senators ordered Hoffman to appear before its next hearing and asked the Foreign Affairs Department to protest what it called the Bank’s abuse of its confidentiality privileges.

Senate president Juan Ponce Enrile, who had to sign the subpoena, added, “I take that responsibility of bringing that guy (Hofman) here.”

When asked by ABS-CBN News in an ambush interview if he will attend the senate hearing if subpoenaed, Hofman said, "It’s up to Washington to decide whether to allow me to attend the Senate hearing or not."

From accuser to accused

Senators allied with the Arroyo Administration, including Santiago and Enrile, turned the tables on the World Bank during the senate hearing, accusing it of conducting a sloppy investigation into allegations of corruption surrounding Bank-funded road projects.

In a brief interview with ABS-CBN News, Hofman also defended the Bank’s investigation process.

"It’s very thorough. Our processes were very thorough," he said.

World Bank explained in its statement that it conducted the investigation and banned the involved construction firms “To help the Bank safeguard the funds entrusted to us…This is why the Bank conducts its own investigations under its own administrative rules and procedures.”

It said its Department of Institutional Integrity (INT) conducted the investigation for the specific purpose of determining whether the World Bank rules had been violated.

INT’s investigation, however, “should be distinguished from those required in a national investigation or prosecution which involves different evidentiary and burden of proof requirements.”

The Bank said it shared the Referral Report, which summarized in 9 pages the investigative findings of its INT to the Philippine government.

Finance Secretary Margarito Teves said during the senate hearing Thursday that since his department directly deals with multilateral lenders, like the World Bank, it received a copy of the Referral Report in November 2007.

However, Teves said that it referred the Report to the office of Gutierrez “Since the specific activity or responsibility associated with investigation on alleged persons in the report are within the province of the Ombudsman.

Confidential

Ombudsman Gutierrez said during the senate hearing that the 9-page Referral Report was “full of restrictions” thus making it difficult for her office to conduct the investigation.

"The report is full of restrictions, such as, but not limited to, that it should not be used by the government as a basis for initiating any administrative, criminal or civil proceedings. Moreover it [report] should not be cited or referred to in the course of any investigation. Its cover letter alone is marked 'strictly confidential'," she said. (Read story here)

“As a result of these restrictions, it could have been less difficult for us to conduct the investigation given the witnesses that are needed,” she said.

In its statement, the World Bank also defended these “restrictions.”

It said the report “contained sensitive information which may be relevant to investigations in the Philippines, and made no judgment as to whether the laws of the Philippines had been violated.”

It added that the Referral Report was shared on a strictly confidential basis “to allow the investigative authorities in the Philippines to undertake their own investigation and reach their own conclusions.”

It said sharing the report was meant as an offer to begin a “cooperative relationship” between the Bank and the investigative agency—if the latter so desires.

She said, it said

The World Bank statement also basically debunked Gutierrez’s claim that the documents it shared with the Philippine government were not enough for her office to conduct a thorough investigation.

“A member country government that has received a Referral Report and is seeking to investigate the case can always ask the Bank for additional information…The World Bank has offered follow-up assistance to the Ombudsman in conducting her investigations,” it said.

It added that the Ombudsman also has a copy of the Notice of Sanctions Proceedings (NOSP) prepared by its INT team. The NOSP were sent to the sanctioned Filipino and Chinese firms, as part of its internal legal procedures.

“We believe that the country now has the relevant body of information to consider in carrying out whatever investigation the (Ombudsman) deems appropriate…It is dependent on the national legal framework in each country to judge whether legal proceedings in the country are warranted.”

During the latter part of the Thursday hearing, Gutierrez also informed the senators that, two days ago, she received a thick folder from the World Bank called the Philippines National Road Improvement and Management Program (NRIMP).

The sanctioned Filipino firms were bidding for the $33 million-worth road projects under the first phase of the NRIMP, which is part of the World Bank’s lending program to the Philippines.

The lending programs are crafted in coordination with the Philippine’s relevant government agencies, including the Finance Department and the National Economic Development Authority.

“I think that (NRIMP) should be included in the subpoena and we have to scrutinize that (to) serve as evidence,” Gutierrez said. - with reports from Agence France Presse, ABS-CBN News