World Bank debars implementer Louis Berger for 'corrupt practices'

World Bank President Jim Yong Kim talks during a roundtable discussion with youth on climate change in Hanoi, Vietnam. The multilateral development bank has debarred Louis Berger Group for engaging in “corrupt practices” while implementing bank-financed projects in the Asian country. Photo by: Dominic Chavez / World Bank / CC BY-NC-ND

The World Bank Group has debarred Louis Berger Group, a major U.S. engineering and development consulting firm, due to findings that the firm engaged in “corrupt practices,” while implementing bank-financed projects in Vietnam.

The debarment means Louis Berger will be ineligible for World Bank-financed contracts for a period of one year, and the firm “must take appropriate remedial measures to address the misconduct for which they have been sanctioned, and adopt and implement an effective integrity compliance program consistent with World Bank guidelines,” according to a bank press release.

Because Louis Berger’s debarment is for a period of only one year, the firm will still be able to bid on contracts with the Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank and African Development Bank. Mutual enforcement agreements between those institutions mandate that debarments over one year apply to bids with all of them.

“In practical terms, this agreement has minimal business impact as Louis Berger began a corporate-wide voluntary recusal from World Bank work in 2011 following its original discovery and reporting to U.S. and World Bank authorities,” according to a Louis Berger press release issued at the time of the debarment. The release also notes the bank’s decision to sanction Louis Berger under the 12-month cross-debarment threshold reflects the bank’s recognition of  “extensive global reforms” undertaken at the firm since 2010.

Louis Berger’s debarment follows shortly on the heels of another major sanctioning of a U.S. development implementer. The U.S. Agency for International Development last week suspended International Relief and Development, its largest contractor for programs in Iraq and Afghanistan, for an indeterminate amount of time. In addition to bidding on World Bank contracts, Louis Berger has also been among USAID’s top-three private sector partners in recent years.

Louis Berger’s former chief executive, Derish Wolff, in December pleaded guilty to conspiring to defraud USAID by overbilling the U.S. government for contracts in Iraq and Afghanistan.

According to the World Bank press release Louis Berger made corrupt payments to government officials under two World Bank-financed projects in Vietnam, the Third Rural Transport and Da Nang Priority Infrastructure Investment Projects.

The World Bank’s consultant guidelines describe “corrupt practices” as the “offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party.”

According to the press release, the incidents came to light after an initial inquiry by the bank prompted Louis Berger Group to conduct its own internal investigation and then disclose the results.

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About the author

  • Igoe michael 1

    Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.