Exposed: how foreign aid giant conned MPs with fake evidence
Published by The Mail on Sunday (4th December, 2016)
Fat cat foreign aid contractors paid millions by the taxpayer tried to deceive MPs and protect their lucrative business by faking glowing testimonials about their work overseas, it can be revealed today.
Bosses at Adam Smith International (ASI) organised the sending of supportive statements to a powerful MPs’ committee investigating the vast profits made by so-called ‘poverty barons’ on the back of Britain’s huge foreign aid spending.
They passed them off as independent submissions from senior foreign politicians and officials – but they were drafted by the firm’s staff.
It was a brazen attempt to ensure the company’s 36 lucrative contracts – worth £329 million – were not cut after The Mail on Sunday’s startling exposé of Britain’s £12 billion foreign aid giveaway.
But ASI’s astonishing scam was foiled when sharp-eyed officials at the International Development Committee (IDC) realised they were being bombarded by submissions that all had suspiciously similar praise for the firm’s work.
A whistleblower, horrified by the deceit, leaked incriminating emails from the firm to The Mail on Sunday that reveal the extraordinary lengths to which they went to cover their tracks.
The messages reveal how a senior ASI director in one case warned staff writing fake statements not to pretend to be ‘illiterate farmers’ writing in ‘perfect English’.
In another astonishing email, the same executive wrote: ‘We need to take care that an ASI employee is not identified as the creator.’
Seemingly fearing detection, he said ‘it will look suspicious’ if all submissions were identical.
One foreign dignitary said he was later given a ‘letter of recommendation’ to sign. He was angry when he discovered it was to be used as part of the firm’s submission to the inquiry.
The emails also raise questions over involvement of the Department for International Development (Dfid), which has come under increasing pressure over doling out massive sums abroad amid public spending cuts at home.
The emails say the testimonies were ordered by Dfid and claim officials would ‘nudge’ any aid beneficiaries reluctant to play ball.
The damning dossier of leaked messages also reveals that:
- One of the secret documents – marked ‘Official Sensitive’ on every page – reveals that it is ‘certain’ that some of the British taxpayers’ money sent to Somalia will be diverted to Islamic State;
- A former Dfid official who now works for Adam Smith International illegally obtained confidential Whitehall reports to help the company bid for new contracts;
- Ministers are still handing £70 million this year in bilateral aid to India, despite this fast-growing economy having its own space programme.
Last night ASI directors faced the prospect of being charged with contempt of Parliament.
‘These allegations are serious and concerning,’ said Stephen Twigg, chairman of the IDC, who said he would be recommending an investigation by his committee.
The bizarre plot was hatched in May when Mr Twigg’s committee announced plans to extend an inquiry into Dfid spending with a probe into its use of contractors.
This followed The Mail on Sunday’s exposé of how private firms handing out British aid in the poorest parts of the planet were driving up their profits, pay and dividends.
We revealed how a small group of favoured contractors have seen turnovers soar and margins rise off the back of Britain’s aid boom.
ASI is the biggest specialist firm. It saw post-tax profits more than double in two years to £14.3 million and handed out six-figure dividends to directors on top of salaries of up to £239,617.
MPs said there had been ‘heavy criticism’ of Dfid’s use of for-profit private organisations to deliver aid programmes. Dfid secretary Priti Patel has told colleagues she has been ‘appalled’ by the closeness of between Dfid and suppliers, telling them she will not tolerate ‘profiteering off the back of the suffering of the world’s poorest.’
The Mail on Sunday understands she is planning to tough new transparency standards to open up contracts and budgets to hold contractors to account.
The cache of leaked emails reveals that director Peter Young, ASI’s head of strategy, told staff that Dfid ‘urgently needed’ testimonies from the recipients of British foreign aid to ensure ‘a strong response’ to the criticism.
Young outlined what should be in submissions, before suggesting staff should approach ‘Ministers and permanent secretaries and the like’ as ‘priorities’, along with small entrepreneurs.
He asked colleagues to let him know if contacts need ‘a nudge’ from Dfid. He wrote: ‘Frankly this is a time for beneficiaries to step up and be helpful. They are getting free, high-quality advice and should be prepared to chip in.’
In one astonishing email, Young warned staff writing fake submissions from foreign beneficiaries: ‘We need to be judicious. It would not be plausible for an illiterate farmer to submit a long note in perfect written English.’
A senior manager responded days later, relaying his discussions with three named ministers in Afghanistan that he would turn into ‘ideal submissions’.
Young responded: ‘Excellent work. I think we need to write individual submissions in each case, otherwise it will look too suspicious.’
Nine days later another manager confirmed he had ‘produced submissions’ for two ministers. ‘The challenge has been in ensuring the two sound sufficiently different, whilst conveying the main points Peter outlined,’ she wrote.
A statement purporting to be written by one of these men – Javid Sadaat, deputy minister of mines in Afghanistan – was later sent to the committee, along with submissions from politicians in Kenya and senior officials in Sierra Leone identified in the firm’s internal correspondence as agreeing to offer evidence.
Sadaat’s statement to MPs praised Dfid’s ‘expertise and professionalism’, adding that ASI support in a £10.2 million scheme to help develop natural resources was ‘incredibly useful’ and their continued presence ‘essential’ for his ministry.
Afghan media later reported the country’s president Ashram Ghani had criticised the ministry’s foreign advisers, saying they did not have any tangible achievements over past three years.
Others identified for giving evidence include the police commissioner of Somaliland and Asha, a 20-year-old woman running a food kiosk in Mombasa, Kenya, who was pictured in April with the then Dfid Secretary of State Justine Greening.
An overseas source who signed one of the ‘evidence’ statements said ASI staff asked for ‘a letter of recommendation’ but did not say it was for a parliamentary probe.
‘I was very annoyed because they did not tell me what the letter was for,’ he said. ‘The paper was drafted by them and then sent to me.’
Young was so hands-on with the operation he instructed staff to draft the submissions in Microsoft Word. He sent another email explaining ‘how to remove the hidden personal information’ in ‘potentially embarrassing’ or ‘sensitive’ metadata.
A clerk for the Select Committee told The Mail on Sunday that suspicions were raised after ‘a large number of similar submissions’ praising ASI arrived from aid beneficiaries around the world.
The submissions were finally accepted as written evidence by the committee – but not categorised as being ‘independent testimonies’. The Select Committee publishes its final report early in the New Year.
Dfid said it engages ‘openly and honestly’ with Parliament. ‘No evidence of wrongdoing has been received,’ said a spokeswoman.
ASI said it encouraged partners to submit evidence to the parliamentary inquiry, believing it important the committee members understood ‘the strong support’ of beneficiaries for the good work being achieved.
A spokeswoman said submissions were either written entirely by the individuals or staff helped produce initial drafts after beneficiaries had articulated their views.
Submissions were agreed and signed off by each beneficiary.
She said Young did suggest that if based on a draft originating on a company computer, they should not contain data to identify ASI staff as originators ‘as this would give the misleading impression they were our views, and not those of the beneficiary.’
It is an extraordinary picture. In a wood-panelled committee room in the heart of the House of Commons, Peter Young, Adam Smith International’s director of strategy, looked amazed as I submitted evidence to MPs savaging foreign aid fat cats like him, and questioning how much he had earned over the last decade in salary, bonuses and pensions.
The subject under discussion at the International Development Committee was whether the Government was frittering away taxpayers’ cash on such private contractors, creaming off millions meant for the world’s poorest people.
Little did the listening MPs know that Young was at the centre of a secret scheme to feed misleading evidence to their inquiry.
Sadly, Young declined to answer my query, although his chunky salary figure would be well into seven figures, given that in one year alone he paid himself a dividend of £800,000.
Under his guidance, ASI has become the dominant specialist private deliverer of British aid, driving up profits and margins on the back of the great British aid giveaway.
My exposé in the MoS earlier this year that prompted the session in Westminster found ASI’s turnover soared from £72 million to £111.7 million in just two years. Profits after tax more than doubled from £6.8 million in 2012 to £14.3 million in 2014.
The firm’s parent company shared almost £1 million pay among a small pool of directors, boosted by dividends of £440,885 paid to five of them. It previously paid one director a seven-figure sum in annual salary and bonuses, despite working in the poverty industry.
They do at least share the spoils with staff. According to its annual report, ASI pays its 105 employees an impressive average salary of £69,425 a year, despite more than doubling numbers in two years.
Young has been at the firm since it was founded in 1992. Sources say he is the brains behind the company’s ascent.
A controversial former head of the Federation of Conservative Students, Young and his partners exploited the popularity of Thatcherism after the fall of the Berlin Wall by advising on economic and political reform in Eastern Europe. They soon saw lucrative opportunities in the swelling aid industry, expanding into Africa, Asia and Latin America as successive governments ramped up the foreign giveaway.
But success has led to criticism, with campaign group Global Justice alleging earlier this year that the Government was ‘lining the pockets of wealthy consultants’ by paying ASI to promote projects with ‘questionable’ benefits for the poor.