MoS victory after FOUR foreign aid contractors are forced to quit as it's revealed officials spent £15m of YOUR money flying around the world while handing out British cash 

  • Four founding directors at foreign aid contractor Adam Smith International quit
  • Comes after the Mail revealed how firm obtained secret Government documents
  • The firm tried to dupe MPs by passing faked evidence to a parliamentary inquiry

Four senior executives at Britain’s biggest specialist foreign aid contractor have quit after explosive disclosures in The Mail on Sunday of dirty tricks and profiteering.

The astonishing clearout of four founding directors at Adam Smith International (ASI) comes after this newspaper revealed how the firm obtained secret Government documents and used them to their advantage in bids for contracts.

Leaked emails also exposed how ASI attempted to dupe MPs by passing faked evidence to a parliamentary inquiry into private-sector fat cats. 

The inquiry was set up after previous exposés in this newspaper of excessive pay and profits in the aid industry.

Strategy chief Peter Young
Director Andrew Kuhn

Shamed: ASI's gang of four, including strategy chief Peter Young (left) and director Andrew Kuhn (right), both of whom have gone

The resignations at the shamed company come after furious Ministers and MPs on the International Development Committee (IDC) set up their own inquiries that endorsed our investigations. 

ASI – which has former Foreign Secretary Sir Malcolm Rifkind on its board – is stopping bids for new Department for International Development (DFID) work while it cleans up its act and changes its structure. Government sources claim the moves could cost the firm £150 million in lost business.

ASI used aggressive tactics and a network of well-placed contacts to dominate the sector, winning aid deals for projects from Afghanistan to southern Africa worth nearly £300 million over the past three years alone.

Its turnover and profits have almost trebled since 2010, enabling its top team to pocket millions as aid spending boomed. Nearly all of its income comes from British taxpayers.

DFID said it welcomed ASI’s suspension of bidding while sorting out ‘fundamental’ problems.

A statement said there were ‘serious questions over ethical integrity’ that ‘will not be solved with quick fixes’.

Director Amitabh Shrivastava
Executive chairman, William Morrison

Director Amitabh Shrivastava (left) and outgoing executive chairman, William Morrison

The Foreign Office is also concerned by ASI’s actions. ‘We are working closely with Dfid and looking at how this impacts with them working with us in the future,’ said a source. ‘We must ensure any bidders meet the highest standards.’

Other Government sources admit they were surprised to discover they can take no action against Raja Dasgupta, the former Dfid official who circulated the confidential documents soon after joining ASI in a senior role. ‘It’s frustrating there is not more we can do,’ a source said.

The directors leaving ASI and all associated companies are Peter Young, the strategy chief who oversaw the duping of the parliamentary inquiry, and fellow founders Andrew Kuhn and Amitabh Shrivastava.

Executive chairman William Morrison will also quit after restructuring the firm. He said: ‘We regret that certain deficiencies of policy and procedure resulted in our failure to meet the highest standards of corporate governance.’

Ian Birrell: The MoS journalist who has exposed aid scandals addresses the International Development Committee

Ian Birrell: The MoS journalist who has exposed aid scandals addresses the International Development Committee

It is believed nine other senior ASI executives who received the documents in an email from Dasgupta remain in post, despite DFID’s strong public condemnation of their failure to raise concerns. The firm’s spokeswoman said an internal disciplinary review was under way.

The ambitious outfit remains highly active around the world, with a new office in Tunisia and a source in East Africa saying ASI was still ‘fishing’ for lucrative aid contracts.

Ministers are reviewing procurement policies after the scandal, seeking to open up contracts to smaller firms and extend transparency over how taxpayers’ cash is spent.

MPs have urged them to get a grip on the poverty sector. Tory MP Nigel Evans, a member of the IDC, said: ‘My fear is this dysfunctional company is just the tip of the iceberg. Alarm bells should be ringing loudly.’

 

IAN BIRRELL and JONATHAN BUCKS: The 5 star rip-off: You pick up £15million bill for officials' luxury travel

A Unicef official with a villager in Ethiopia at a water aid project partly funded by British money

A Unicef official with a villager in Ethiopia at a water aid project partly funded by British money

Bureaucrats handing out British aid have spent an astonishing £15 million flying themselves around the world and staying in smart hotels during the past three years.

A Mail on Sunday analysis of Department for International Development (DFID) data revealed the startling sum spent by officials as their budgets soared – at a time of cuts to public services at home.

The luxury visits are in stark contrast to the conditions in which ordinary people live in the countries visited by the officials.

Staff doled out £11.35 million on their own air fares, £5 million of that in one year alone, despite employing armies of aid workers and consultants in the field.

And DFID civil servants – revealed last year as the highest paid in Whitehall with average annual salaries of £52,700 – also splashed out on five-star hotels and luxury lodges abroad when far cheaper options were available.

Nadine Dorries, the Tory MP for Mid-Bedfordshire, said: ‘This is abuse of taxpayers’ money. It is intended to help the world’s poorest people, not to provide endless trips and lovely hotels for civil servants.

‘I am a big fan of aid but it is no wonder so many people are sceptical when they see this kind of behaviour.’

Among favoured destinations for British aid officials on their travels are the Oberoi hotel in New Delhi, which has £200-a-night rooms.

Last year, £3,304 of taxpayers’ cash was spent on trips to this landmark hotel. The city’s Hyatt Regency and Le Meridien hotels charge about £100 a night.

DFID spent £9,033 in one year at the luxurious Kuriftu Resort and Spa in Bahir Dar (pictured)

DFID spent £9,033 in one year at the luxurious Kuriftu Resort and Spa in Bahir Dar (pictured)

DFID representatives also enjoyed time at the impressive Hilton in Istanbul, which has two pools and massage rooms. DFID has been working in Turkey with the estimated 2.7 million refugees who have fled from Syria.

Perhaps nowhere is the gulf wider between the recipients of aid and DFID workers tasked with supplying it than in Ethiopia.

DFID spent £9,033 in one year at the luxurious Kuriftu Resort and Spa in Bahir Dar.

The resort calls itself ‘a true step into the Garden of Eden’. Beyond its plush environs, ten million Ethiopians don’t have enough to eat and DFID is assisting the country’s repressive regime on public sector projects.

Bahir Dar has a number of cheaper and safe alternatives.

In Lahore, Pakistan, DFID spent £38,033 over the past two years at the £176-a-night Avari hotel, and £11,500 at the £170-a-night Pearl Continental. Among many cheaper options are The Residency at £95 a night and the Luxus Grand at £110 a night.

Pakistan is estimated to have 60 million people living in poverty.

DFID data discloses that spending on agency staff to help dole out foreign aid rose last year to £785,934 from £493,550 in 2015.

A DFID spokeswoman said it had reduced spending on ‘non-standard’ travel by 60 per cent over the past five years. Its policy was to use ‘the most efficient and economic means of travel’.

 

Scandalous rot that goes far beyond this one bad apple, writes IAN BIRRELL

Ian Birrell: The MoS journalist who has exposed aid scandals

Ian Birrell: The MoS journalist who has exposed aid scandals

For years, there have been whispers in the aid world about the activities of Adam Smith International (ASI) as it gobbled up Government contracts to become the UK’s biggest specialist aid contractor.

Insiders talked about the firm’s remorseless focus on making money, which earned millions for the founders as they preached their anti-poverty sermons. I heard people question the dubious nature of projects, dodgy practices behind the scenes, huge spending on Western consultants, and questionable links with Whitehall. 

Yet still the firm sucked up contracts, with almost all earnings coming from Britain’s beleaguered taxpayers as aid budgets grew: £89.3 million one year, £93.5 million the next, then £112.2 million last year. 

As we revealed last month, one £25 million project designed to improve water supplies in poverty-hit parts of Africa saw at least £17 million spent on consultants.

HOW WE LED THE WAY 

Key witness, MoS reporter Ian Birrell

Key witness, MoS reporter Ian Birrell

We revealed taxpayers’ cash was aiding convicted terrorists, via salaries paid by Palestinian authorities. Ministers froze aid.

We disclosed how British aid funded salaries paid to Gaza civil servants – who had not worked for nine years. Ministers stopped payments.

We exposed profiteering of fat-cat aid-firm bosses. MPs on International Development Committee (IDC) launched inquiry. Key witnesses included MoS reporter Ian Birrell, top.

We revealed campaign by Adam Smith International, UK’s biggest aid contractor, to deceive MPs on IDC inquiry. Committee report savaged ASI.

We also exposed how ASI obtained secret Government documents, which were then circulated internally to obtain commercial advantage. 

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With jaw-dropping inevitability, this scheme was renewed by Government paymasters.

Now the ASI gravy train has, temporarily at least, hit the buffers. But only because an outraged whistleblower helped my investigations that revealed the firm’s rotten core. Politicians on the International Development Committee and at DFID deserve a cheer for finally forcing this firm to clear out its top team and clean up its act.

Yet ASI should not just be seen as one bad apple. This firm stands as a symbol of a system riddled with corruption.

Other players may not behave with such stupidity but are just as focused on their own bottom lines. At least ASI paid tax in this country, for example, unlike some competitors growing fat on the British public’s enforced largesse. Meanwhile the malaise of hefty six-figure pay packages has seeped into the charity world, and it is no surprise to discover that DFID pays the highest wages in Whitehall while flying around the world on its supposed mission to help the global poor.

It also has an appalling record on rooting out corruption, which is why, for all the sudden bold talk of tackling malpractice, we must remember that officials only acted after journalistic exposure of wrongdoing.

Perhaps this would not matter so much if the floods of money were really making a difference to struggling people in poor places.

Yet mostly it makes matters worse by aiding corruption, assisting despots and diminishing hopes of democracy.

With tragic irony, former Prime Minister David Cameron stepped forward last week to mount a defence of aid on the very day that ASI disclosed its dramatic response to our investigation.

Sadly, such practices are the inevitable legacy of his Government’s policies and the wider political obsession with hitting a flawed, outdated target to give away 0.7 per cent of national income.

This sort of behaviour is what happens when spending is prioritised over results, when taxpayers are treated like fools and when Westminster politicians think they can solve complex problems in impoverished corners of the planet.

So will the lessons be learned from this scandal – or will it soon be back to business as usual in the swollen poverty industry?

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