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.
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.