Finishing the Haitian revolution… Israel policy shift… Kenya update

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In case you missed yesterday’s newsletter about our reporting on the scandal involving the World Bank and Bridge International Academies — or even if you read it — see below for updates, including comments from a World Bank official and Bridge, as well as an internal email sent last night by the head of the International Finance Corporation, the bank’s private lending arm.

Today, with the media focusing on violence and instability again in Haiti, the understandable impulse from many well-meaning people is to sigh, shake our heads at the tragedy of it all, and reluctantly send in the Marines to straighten things out again. The new version of “sending in the Marines” no longer involves actual Marines, but in this case would be a Kenyan police force paid for by the United States and operating under the auspices of the United Nations. 

The U.S. has been intervening in the affairs of Haiti on a fairly routine basis for more than a century, yet the situation remains tumultuous. That’s one way of putting it. Another would be to say: You’ve been intervening in Haitian affairs consistently for more than a century. How are you so sure that you’re not the problem? That’s essentially the question I put to the State Department’s Matt Miller this week, producing what I thought was a fascinating back and forth. 

I went deeper on the question on the podcast this week, speaking to journalist and researcher Jake Johnston, author of the new book “Aid State: Elite Panic, Disaster Capitalism, and the Battle to Control Haiti.”

On Thursday, Saagar Enjeti and I interviewed Ambassador Daniel Foote, who resigned in protest in 2021 from his position as U.S. envoy to Haiti. Foote argued that the Haitian people are in the process of what he described as finishing the Haitian revolution, and that it would be wise for the United States to step back and give Haitians themselves space to sort out their affairs. Any effort to foist a new government on Haiti from outside will be rejected in violent fashion, and you’ll only be able to see the resulting carnage on Telegram.  

Now that we’re more than five months into Israel’s war in Gaza, a perceptible shift in American attitudes, and in particular Jewish American attitudes, is detectable. On Thursday, Senate Majority Leader Chuck Schumer denounced Israeli Prime Minister Benjamin Netanyahu, calling him an obstacle to an enduring peace. Some of Israel’s leading boosters responded by suggesting the highest-ranking Jewish politician in American history was an antisemite. The Biden administration floated the possibility of using what leverage it has to replace Netanyahu as prime minister. Miller, the State Department’s spokesperson, choked up in response to a question from my colleague Prem Thakker about the toll of the war on Palestinian children, and what the U.S. planned to do to help them recover in its aftermath — those who survive, that is. 

The lobbying campaign from Israel’s backers, meanwhile, has only grown more intense. At AIPAC’s annual conference this week, lobbyists distributed talking points urging advocates to deny that any famine is taking place in Gaza, even as people are now dying of starvation — widely understood to be arguably the most painful way to die. 

As I reported yesterday, the Jewish Communal Fund, a massive donor-advised fund that facilitates charitable contributions, has barred its members from sending donations to the group Jewish Voices for Peace. These are strange times. 

At Columbia University, my colleague Thakker reports, a coalition of more than 20 organizations sponsored a protest in November against the war in Gaza. Yet, a new lawsuit notes, only two groups were disciplined. From Thakker:

On Tuesday, the New York Civil Liberties Union and Palestine Legal filed a lawsuit against Columbia University, “for the unlawful suspension of its chapters of Students for Justice in Palestine (SJP) and Jewish Voice for Peace (JVP) for engaging in peaceful protest.” The groups seek reinstatement and a declaration that the school violated state law in carrying out the suspensions.

The suit — brought on behalf of the SJP and JVP chapters, as well as one Palestinian and one Jewish student — notes that the November 9 protest was “sponsored by a coalition comprised of over 20 groups,” and that nevertheless, the “two groups were given no notice of the planned suspensions and no opportunity to respond to the charges or to contest them. None of the other groups involved in the event faced disciplinary action.”

Here’s yesterday’s newsletter, with updates:

Once in a while, it’s nice to get a reminder that journalism still matters. The latest one came in the form of a remarkable all-staff email sent by World Bank President Ajay Banga, which was quickly leaked to me. 

If you’ve been following our reporting, you know that over the past year, Neha Wadekar and I unearthed a whistleblower's shocking claim of a cover-up of a child sex abuse scandal, a who’s who of international do-good financiers, and a for-profit education chain operating mostly in Africa called Bridge International Academies. 

Our subsequent report showed in detail how an investigator working for the World Bank was stymied and retaliated against. (An official with the World Bank said he resisted moves to slow down the investigation and that he was bound by a confidentiality provision, which he said allowed the World Bank to obtain information that “was essential for the investigation.”) We got notes from a critical phone call between World Bank officials and company executives showing a plan to “neutralize Adler” — the lead internal investigator who had uncovered the allegations — and to slow down the process. “Time matters,” as one person on the call put it. “Need to delay until Series F.” (That’s a name for a financing round.)

Following our reporting, Sens. Elizabeth Warren, D-Mass., and Peter Welch, D-Vt., sent multiple letters to the World Bank, warning the new president that how he responded to the scandal would be used by Congress as a proxy for his broader seriousness about reforming the bank. “We view the Bridge case as a litmus test for the conversation currently taking place around IFC's responsibility to remedy social and environmental harm caused by its projects, especially those where IFC is not following its own policies, which we see as an important foundation for any proposal to increase the funds available to the World Bank Group,” the senators wrote, referring to the World Bank’s private financing arm, the International Finance Corporation. (The World Bank declined to comment.)

The Guardian and the New York Times wrote follow-up articles, and earlier this week California Rep. Maxine Waters, the top Democrat on the Financial Services Committee, sent a letter to Treasury Secretary Janet Yellen similarly slamming the Bank.

Over the past several months, however, Banga was strangely resistant to taking action. At a conference in February, he pushed back on the notion there was a “legal effort to cover it up.”

“I think there's a series of things management could have done better,” he said. “And that's the discussion we're going to have with the board shortly. So I'm not going to preempt that. I just disagree that there was a legal effort to cover it up — that I will not accept as a question — because I don't agree with it. If it is proven to be so, I will take all the action that's necessary, but really conjecturing that is so in a public space, I will refuse to sign up for it. That's who I am. I'm sorry if you don't like it.” He added: “I’d be happy to be fired by the way. I can go back to my private sector life.”

Bridge International Academies was backed by the World Bank’s IFC, as well as prominent Silicon Valley and venture capital leaders, including private funds linked to Bill Ackman, Mark Zuckerberg, and Pierre Omidyar (whose foundation was the founding donor of The Intercept, but has since stepped back). 

Banga didn’t start his term as World Bank president until June 2023, long after the scandal and the claimed cover-up began, meaning it was handled — or mishandled — exclusively by bank officials appointed by Donald Trump. Why he went to the mat for those Trump officials remains a mystery.

Regardless, that’s over, with Banga now apologizing, acknowledging “mistakes were made,” and pledging to “do better.” What that better looks like remains a focus of contention.

The IFC proposed a remedial plan Thursday. Responding to the plan, Bridge said, "Since 2020, Bridge has encouraged and offered support based on its longstanding work and commitment to IFC to enhance the institution’s awareness of child safeguarding risk across industries, and shared best practices for both prevention of and response to child safeguarding risk. Bridge remains a committed partner in support of this effort, and looks forward to continuing to work with IFC and other organizations committed to child safeguarding across Kenya to strengthen support for survivors of abuse."

Civil society groups have been quick to condemn the plan as inadequate. 

Read Banga’s full apology below, followed by an internal email from IFC Managing Director Makhtar Diop. They’re classics of the corporate genre. 

Our first exposé.

Our follow-up, which blew the lid off the cover-up. 

Our produced podcast version.

Banga’s email to staff:

Colleagues, 

Ten years ago, the World Bank Group invested in Bridge International Academies with the ambition of helping children in Kenya gain access to quality education and the opportunities that come as a result. Early on we received reports of child sexual abuse, but protocols were not followed and children were hurt. Put simply, mistakes were made.

On behalf of the World Bank Group, I am sorry for the trauma these children experienced, committed to supporting the survivors, and determined to ensure we do better going forward. 

The change we are pursuing requires action but begins with self-reflection. 

Tomorrow, the Compliance Advisor Ombudsman will publish findings that resulted from a years long independent investigation into this tragedy. The report comes with an opportunity to take another step down that road of reform, but it won’t be easy and demands we each take ownership. 

Those findings will be accompanied by a Management Action Plan that our shareholders have approved, under which IFC will develop a remediation program with input from survivors, civil society, and child abuse experts. I encourage everyone to read the report and sincerely consider its conclusions. 

But already we know areas that need to be addressed and preliminary next steps. We should have responded earlier and more aggressively. We should have onboarded learnings across the World Bank Group on how to properly address allegations. And we should have pulled in the other investors at the onset and encouraged them to be partners in the response. 

In the near future, IFC – with child safety experts – will begin having important conversations with survivors in a way that ensures their well-being. Additionally, in order to make certain the CAO investigation is received with the credibility it deserves, we will ask an outside investigator to ensure that this was conducted in a manner that was free from interference. 

This is a difficult moment for our institution, but it must be a moment of introspection. I know each of you care for the World Bank Group – and the people we serve – as deeply as I do. We are all here for a purpose, that purpose must guide us to do better.

Ajay

What follows is an all-staff email sent by Diop, which does not go as far as Banga’s and suggests that the fight for accountability remains an active one. “Unlike Banga, IFC’s managing director, Makhtar Diop, has yet to offer an apology or take responsibility for IFC’s failings,” noted Devex, a trade publication. His note:

Further to Ajay’s note yesterday, I am writing to update you on the investigation by the Compliance Advisor Ombudsman (CAO) related to our former investment in Bridge International Academies in Kenya. This has been a deeply troubling case, especially as it concerns violence against children. This situation requires us to act immediately. We must also learn important lessons from it.

In our pursuit to provide affordable, quality education to children from low-income families, the IFC made equity investments in Bridge International Academies in 2013 and 2016, and in Learn Capital Ventures Fund in 2014, which also held equity in Bridge. However, the CAO's investigation into allegations of child sexual abuse at Bridge schools revealed significant shortcomings in our due diligence and project supervision processes. We failed to assess and mitigate the risks of child sexual abuse adequately. The Board has since approved a Management Action Plan that we proposed, which focuses on remediation and prevention, emphasizing a survivor-centered approach.

I want to be clear: IFC has zero tolerance for gender-based violence, child sexual abuse, or abuse of any kind.

We are committed to improvement, and the first step is an honest evaluation of our own actions in this case and other cases. This report has surfaced issues both with our systems and culture. We take these valuable lessons to heart and must work collectively to guide our future actions. I urge all Directors and Managers to discuss these lessons with their teams.

Problems will inevitably arise because it’s the nature of our business. They can come from the project or from our own actions. Development is complex and we work in fragile environments with weak institutions. The question is how we should act when problems arise and how we learn to prevent recurrence.

First and foremost, we must ensure that we are listening carefully to the beneficiaries of our projects. They are often vulnerable populations who are not always heard. Their concerns must be surfaced and addressed swiftly. This is essential to our mission. We have an individual responsibility to do the right thing and I am counting on each of you to do so. This is part of our ethos. However, individual commitment must be backed up by systems. This is why we have strengthened our Stakeholder Grievance Response mechanisms to handle direct complaints, including clarification of responsibilities, timelines, and processes. Our country offices have a critical role to play in this.

Second, working together with our co-investors is the best way to have a more holistic approach to effective resolution of problems. I urge you to sit with our clients and co-investors and discuss how to address challenges together. Our partners want to do the right thing, but most do not have the level of E&S expertise that we do, and we need to bring them along, while also listening to their ideas with humility.

Finally, I am adamant that we create space for staff to raise and escalate issues in a timely manner so that we can all help with their resolution. Zero tolerance starts here. To reiterate: escalating problems is not a sign of a failure.

To address the more systemic issues, we are taking proactive steps to comprehensively respond to the risks that came to light through this case, including the following:

1. We are beginning the review and update of our Sustainability Framework, which is over ten years old. As we do this, we will be embedding child protection and GBV measures into our Environmental and Social (E&S) policies and procedures. In the meantime, we are already reviewing and strengthening the E&S provisions in investment agreements related to child safeguarding and GBV prevention.
2. We also need to know if there are risks in our portfolio which should be addressed now. The E&S team is well advanced in conducting a portfolio review to identify any gaps and develop action plans to prevent and mitigate GBV and child sexual abuse.
3. We need more GBV specialists in the field close to teams and clients to strengthen the global GBV practice established in 2020. We are in the process of recruiting the best expertise outside our institution. These GBV experts will be in place in each region within the next couple of months. They will work alongside our existing specialists and better equip staff and clients to identify and respond to instances of child sexual abuse and GBV.
4. As highlighted in my recent conversation with Tania Kaddeche, our Global Director of ESG Sustainability Advice and Solutions, we have started to provide mandatory training to all operations staff to enhance their understanding of non-financial risks, with a particular emphasis on GBV and child protection.

I stand with you in this journey. Our work is challenging, but it is our responsibility to address issues swiftly and transparently. We all play a part in safeguarding the well-being of those impacted by our investments. I am grateful for your dedication to our mission and your tireless efforts. Together, we will emerge as a more robust institution, better equipped to serve the world.

Best regards,

Makhtar