A British made overseas aid scandal that has ended in ruined reputations for the people who promoted it

Mail on Sunday story

The Mail on Sunday story that started the scandal. Is there more to this?

CROSS POSTED ON BYLINE.COM

In the last few days one of Britain’s bigger contractors to our overseas aid programme has voluntarily suspended participating in bidding  for any new work and seen the resignation of three of its principal founders.

Adam Smith International – turnover £130m  and making a £17m profit in 2015 – makes  a lot of its money promoting overseas aid programmes funded by the  British taxpayer in places from Afghanistan to Jordan, Nigeria, St Helena, Syria. Iraq and Libya to name but a few. It also received funds from  among others the Canadian government, the European Commission and the World Bank.

However last year it faced an expose in the Mail on Sunday which revealed that it was attempting to hoodwink  a Parliamentary committee investigating the role of  private contractors by encouraging favourable views of its work.

That committee – Commons Select Committee on International Development – produced a damning report last month which concluded it had tried to mislead Parliament.

It concluded that Adam Smith International behaved improperly and it was only the failure of the company to convince MPs that they are not being reported to the Committee of Privileges for misleading Parliament.

The report said : “Adam Smith International has acted improperly …It overstepped the mark in soliciting the submissions of written evidence, including  applying pressure to beneficiaries to submit evidence with implied or explicit references to continuation of funding.

“ASI sought to unduly influence the International Development Committee by engineering the submission of what at first sight appeared to be independent evidence of its value and effectiveness as a mechanism of development delivery. We are very concerned at the serious lack of judgement displayed by ASI…, the actions of ASI went well beyond what was appropriate.

“That we did not accept the material in question as evidence meant that we were not misled or influenced. This reduces the seriousness of the impact and therefore we are not seeking a referral of this matter to the Committee on Privileges.

“Nevertheless, we deplore the sort of inappropriate conduct that ASI staff have engaged in—particularly the attempts to conceal ASI’s involvement in collecting the beneficiary testimonials and the inappropriate pressure that was put on beneficiaries to provide testimonials”.

The committee were not wholly satisfied and planned a further investigation with a report due at Easter.

adam smith intrernational

Then last week the top people in charge of the company quit.

William Morrison, Executive Chairman of ASI, said in a statement on its website:

“The company’s mission is to foster the social and economic development of some of the poorest and often most conflict-ridden countries in the world. Our comprehensive reform emphasises the importance to our staff of this mission.  We regret that certain deficiencies of policy and procedure resulted in our failure to meet the highest standards of corporate governance, such that we did not meet the expectations of DFID and the public, to whom we are accountable.”

The organisation is to reform itself as “an enterprise with primary focus on a social mission, with a mandate to consider its triple bottom line, taking into account its social, environmental and financial performance.”
It will also establish a foundation and reinvest a significant percentage of net earnings in developing countries, in part through the new foundation.

It announced three founding directors – Andrew Kuhn, Amitabh Shrivastava and Peter Young – will step down. And William Morrison himself , a founding director and ASI’s Executive Chairman, will step down after leading ASI through the restructuring.

Looking back through early Companies House accounts show the firm originated as an off shoot of the Adam Smith Institute – a neoliberal think tank – and its first directors included two founders of that think tank Madsen Pirie and Eamonn Butler. The Institute was recently revealed in a survey to be the least transparent about where it got its money.

One of the other directors Peter Young, who has just quit, had been there 24 years.

The highest paid director was paid £223,000 a year and the remaining directors shared another £500,000 a year between them. Malcolm Rifkind, the former Tory foreign secretary, is also a non executive director.

The company was nearly struck off the Companies House register  in December – but the action was withdrawn in February.

One can only wonder whether there is more to this story than even meets the eye – given how quickly it has started a damage limitation exercise. One waits the MPs findings with growing interest.

8 thoughts on “A British made overseas aid scandal that has ended in ruined reputations for the people who promoted it

  1. Adam Smith Institute should never have been allowed anywhere near the aid budget after their “advice” fuelled the terrible epidemic of pesticide-swallowing suicides among Andhra Pradesh farmers in 2005 (on Clare Short’s watch!).

    They are ideologues not development experts. The aid budget is at least notionally meant to relieve poverty, even if it does provide some nice business for British consultancies at the same time. When an aid programme forces the poor into debt and their indebtedness results in thousandsof suicides, there’s something direly wrong. That’s what happened in 2005 – http://www.rediff.com/money/2005/may/27bspec.htm Talk to Christian Aid and Oxfam about them. (While you’re at it since it’s Fairtrade Fortnight talk to the Fairtrade Foundation as well. For years Adam Smith International kicked off every Fairtrade Fortnight with a misleading press release knocking Fairtrade certification as a way of mitigating producer poverty).

    Why weren’t Adam Smith blacklisted after Andhra Pradesh? Who are their friends at court?

    Pursue this one till you get to the bottom of it, David. This isn’t the proverbial corrupt African dictators scamming the aid budget, it’s the denigrators of aid themselves.

  2. The four departees you name in your post featured
    prominently in a Mail article fiveyears ago at http://www.dailymail.co.uk/news/article-2204239/The-fat-cats-foreign-aid-Ministers-target-consultants-paid-500m-taxpayer.html , which noted the dividends with which they rewarded themsleves for their successful good works.

    In 2010 Peter Young received more than £1million – a salary of £250,000 and a self-approved dividend of £800,000. Of the three others William Morrison topped up his 2010 salary of around £150,000 with a dividend of over £1 million. Andrew Kuhn’s 2010 salary of £125,000 was matched eight times over by his £1 million-plus dividend, which was also Amitabh Shrivastava’s reward for “making markets work for the poor”.

    The UK’s contribution to global poverty reduction is a moral obligation and an ethical commitment. It’s also an instrument of political influence, for good or ill, and any benefit to British commercial interests should not be at the expense of the primary objective of poverty alleviation.

    The use of British consultants is of course justified when
    appropriate technical expertise is lacking locally. But the aid budget isn’t there for them to skim off the cream. If there is a genuine level of risk and danger involved in them taking up a contract, adequate compensation has to be included in the equation. But ASI’s projects have been described as “not about poverty-reduction but about jollies, corporate workshops and company profits”. And the contribution of the notorious Edinburgh taxi-cab operator Malcolm Rifkind on the company’s governance seems unlikely to be reassuring.

    Aid is about helping the poor out of poverty, it’s not about helping ideological opportunists with well-placed friends to fill their pockets.

    At the Powerbase article on Brian Monteith, Peter Young, one of the “Blue Trot” extreme ideologues of the Federation of Conservative Students, is said to have operated a false account as a slush fund bankrolling FCS’s attempt to break up the National Union of Students by encouraging individual student associations to disaffiliate. His history hardly suggests an over-riding interest in the well-being of the global poor.

    ASI seems to have had significant links with DfID under Labour and Conservatives. The ASI story seems to emphasise the importance of adequate supervision of aid budget administrators and beneficiaries. ASI seems to have had significant links with DfID under Laour and Conservatives.

    • Owen
      Thanks for posting this link. From what I can see ASI Ltd is also linked to a loss making company which is subdsidised by ASI called The Amphion Group and Peter Young is a director. a year or so ago it paid out a whopping dividend of over £33 per share.
      Since writing this piece new information has come to me suggesting an even darker connection between Whitehall and ASI Ltd which was also alluded to in the Mail on Sunday. I am checking it out at the moment.

  3. Did Peter Young have any involvement with the Federation of Conservative Students campaign to “Hang Nelson Mandela”? Did he have anything to say about it?

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