Dirty tricks of aid barons paid millions of our money
ADAM Smith International, the fattest of Britain’s foreign aid fat-cat contractors, remains defiant, if not entirely convincing. ‘For more than 20 years, we’ve been consistently bringing the best minds together to solve complex development problems, and are known for turning policies into action,’ the consultancy’s website continues to boast. ‘The quality of our work is proven and award-winning.’
Many would disagree. Allegations that the firm managed a £12million UK Government scheme which poured money into a brutal, jihadi-dominated ‘justice’ system in rebel-held Syria is simply the latest in a succession of ASI scandals.
According to a BBC Panorama investigation, Jihadis You Pay For, screened last night, the Syrian ‘ community policing project’ was linked to the stoning to death of two women by an Al Qaeda affiliate and the beheading of a teenager, as well as torture of other suspects. Documents seen by Panorama also suggested that police officers were forced to hand over UK cash to the extremists in control of their area.
Dead and fictitious people were put on the force’s UK-funded payroll, it was claimed. The Foreign Office has suspended the three-year-old aid project as a result of the revelations.
Whether this proves to be the last straw for Adam Smith International – the most notorious of Britain’s foreign aid enterprises – remains to be seen. ASI has rebutted the latest claims.
But only nine months have passed since four AS I founder executives quit after the Government froze further company funding amid question marks over its ethics and integrity.
Confidential Government documents had been ‘ improperly obtained’ by ASI executives, while the company had also assisted with the drafting of glowing testimonials by its clients to be given to MPs to head off criticism and presumably drum up new business.
These abuses fed into a wider anger over the way private-sector bosses have enriched themselves through the commitment to spend 0.7 per cent of Britain’s annual national income – some £12billion – on foreign aid.
TAXPAYERS’ money set aside for projects to alleviate poverty and injustice abroad instead found its way into six-figure salaries and seven-figure executive bonuses or – in the apparent case of the Syrian police project highlighted by Panorama – squandered on wholly inappropriate causes. Perhaps as much as £1billion a year in total has recently gone to consultants.
ASI, which has its headquarters close to Blackfriars bridge in central London, remains at the centre of this disquiet over ‘profiteering’ in the world’s trouble spots. The firm was founded in 1992, arising from, but unconnected to, the Right-of-Centre Adam Smith Institute think-tank.
ASI grew in prominence and income during the early years of New Labour. Its role in spreading free-market thinking in Third World countries, in particular the privatisation of state utilities, soon brought it into ideological conflict with more traditional organisations in the field.
In 2004, it emerged that the Labour government had paid ASI £118million in six years. The following year the company received a further £22.5million from the Department for International Development (DfID). This attracted the description ‘fat cat consultants’. But the rewards then were as nothing to what they would become.
Among the controversies was the £444,000 ASI was paid to boost the public image of a water project in Tanzania which collapsed amid much recrimination about cost and incompetence.
ASI even produced a pop song to support the venture, the lyrics of which claimed: ‘Governments and business people/ Tanzania and foreigners/ are like four legs of a table/ at which our children will one day feast.’
ASI did not have to wait so long for rich pickings. It won lucrative contracts to help in reconstruction in both Iraq and Afghanistan, where most inhabitants were surviving on a few dollars a day.
In 2010-11 alone, DfID gave ASI £37million, out of a total company turnover of £53.6million. Four of ASI’s directors received a remuneration of more than £1million each over that period, including founder Peter Young.
He justified the rewards by saying: ‘We have got tax revenues in Afghanistan up from next to nothing to £2billion. If you want to get a good job done, you have to get people who know what they’re doing.’
However, the Commons’ public accounts committee described the dividends paid to the firm’s executives as ‘excessive’.
The brakes were apparently applied to this gravy train in 2013 when then-international development secretary Justine Greening introduced new guidelines on transparency.
SHE claimed consultancies such as ASI had been paid more than £1billion under Labour with ‘virtually no effective ministerial oversight’.
But neither turnover nor profits showed signs of waning. Quite the opposite.
ASI gross profits almost doubled from £9million in 2012 to £17.4million in 2014. In the same period, DfID’s handouts to the firm had risen from £43million to £88million. Chief executive Layth Bunni was paid almost £240,000.
Some 10 per cent of the overseas aid budget was being spent on such consultants – described by MPs as a ‘grotesque waste’.
But not as far as former foreign secretary Sir Malcolm Rifkind was concerned. His place on the ASI board earned him £35,000 a year, not including bonuses.
Staff were paid an average of £64,000 a year. Then came the allegations of dirty tricks. A year ago, it emerged that a senior figure at ASI had got hold of secret Government files concerning policy plans for foreign aid.
In an email to colleagues he said: ‘I’d appreciate if you could treat these with the right level of sensitivity – it could be detrimental if DfID know that we have these, particularly via me. I think these can help us on BD [business development] planning and strategic approach on bids.’ He was, of course, talking about bids for taxpayers’ money, and this was the aid industry equivalent of industrial espionage. A DfID investigation began.
Shortly afterwards, leaked internal emails written by Peter Young, ASI’s head of strategy, set out his firm’s need for testimonies from foreign clients to be produced to be shown to MPs, to head off the growing storm.
The firm had to be careful, though, not to appear to be authoring those glowing submissions. ‘We need to be judicious. It would not be plausible for an illiterate farmer to submit a long note in perfect written English,’ Mr Young allegedly advised.
It emerged that nine executives had each received more than £1.5million tax-free in 2015. Far from slowing, the gravy train was running away.
In February, DfID froze the award of future contracts to ASI after a scathing report by MPs of the international development committee on the firm’s ‘inappropriate’ behaviour.
DfID said: ‘Since these allegations came to light, we have frozen awards of new contracts to ASI and are taking detailed advice on next steps.’
Within weeks, four of ASI’s millionaire founders had stepped down while the company ‘restructured’. They were Mr Young, Andrew Kuhn and Amitabh Shrivastava, to be followed by executive chairman William Morrison. Then, in September, chairman Sir Martin Davidson lost a vote of no confidence and left. He was followed by Sir Malcolm Rifkind.
ASI shareholders might have hoped a clean sweep of the board would see it given a fresh go at the foreign aid trough. Now, the Syria revelations are a blow from which it might not recover.