also: [SCMP] World Bank denies funds abuse

British Broadcasting Corporation Friday, 18 February, 2000, 10:43 GMT

World Bank considers Timor inquiry

PHOTO: Mr Wolfensohn greets President Wahid in Jakarta

By Richard Galpin in Jakarta

The president of the World Bank, James Wolfensohn, has said that, if necessary, he will investigate fresh allegations that millions of dollars of World Bank funds were diverted by the former Indonesian government to finance militia gangs in East Timor.

The Jakarta-backed militia are widely believed to have been responsible for much of the violence surrounding last year's referendum on independence.

Speaking after holding talks with the Indonesian President in Jakarta, Mr Wolfensohn said the journalists from Australian television, which broadcast the story this week, should pass on any fresh information they had to the bank.

The allegations that World Bank money was being used by the former government to finance the militia gangs in East Timor first emerged last May, just as it became clear that the militia were carrying out atrocities against the civilian population to terrorise them into voting against independence.

The bank says it carried out a thorough investigation at the time, but did not find any evidence that its money was being diverted to East Timor.

A promise to investigate

The allegations re-emerged in a documentary broadcast on Australian television this week.

The programme, made by SBS TV, interviewed civil servants who were based in Dili last year and who allege that the former government was directly funding the militias with money from international donors.

This is a new story. If there's any new specific information, I'll be glad to transparently take a look at it

The programme went further, alleging that the World Bank did not do enough to stop it.

World Bank president James Wolfensohn, who is currently on an official visit to Indonesia, explained that the Bank was aware of the reports.

"From what we have seen so far, and we did a thorough investigation the last time, we were unable to prove anything."

However, he promised to investigate the matter further.

"This is a new story. If there's any new specific information, I'll be glad to take a look at it and, if something is there, we'll find it; and if it isn't, we'll also know that."

A World Bank spokesman has confirmed that, if further investigations are carried out, it will publish the results as soon as they become available.

South China Morning Post Saturday, February 19, 2000

EAST TIMOR

Bank denies funds abuse

VAUDINE ENGLAND in Jakarta

The World Bank says it knew of allegations concerning misuse of its money to fund East Timor militias but found no evidence when it checked the claims last June. Indonesian bureaucrats named in an Australian television documentary broadcast on Wednesday have, so far, remained silent.

"The allegations made in the programme are serious - but they are not new," said Mark Baird, country director for the World Bank in Indonesia. "We heard the same allegations and saw the same documents in June last year.

"We investigated the allegations immediately - as did the Government of Indonesia - and found no evidence that World Bank funds were used in East Timor for political campaigning or by the militias," he said.

The bank's deputy director, Ben Fisher, said on the programme: "My specific reaction and the reaction of my colleagues in government is that we were very upset."

The Dateline documentary showed civil servants finding key documents in the rubble of their offices in Dili, East Timor, but the bank claims some of the translations of the documents, referring specifically to World Bank funds, were false.

"Nor have we seen any evidence to suggest that the US$500 million (HK$3.9 billion) disbursed by the World Bank in June of last year was in any way linked to spending on government programmes in East Timor," Mr Baird said in Jakarta. He said the Indonesian Government fund was running a cash surplus for the fiscal year at the time and "had substantial cash on hand to fund its own programmes without World Bank support".

However, the documentary's claim that Indonesian government money was used to fund the establishment and operations of the militias which wreaked havoc in East Timor remains unanswered.

In the programme, Indonesia's then foreign minister, Ali Alatas, denied the charges. "We . . . got to know about this and we stopped it immediately," he said.

But the Finance Ministry official interviewed was emphatic that cheques kept arriving and that special procedures were ordered to get the money to militia bosses quickly.

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