Thread by @Counter_Balance

🚨BREAKING🚨: @Counter_Balance and Corner House investigation reveals how @EIB failed to act on blatant fraud and corruption within a multi-million Euro investment it made in a private equity fund.

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Executives appointed by ECP Africa Fund II waved through suspicious payments by Spencon - a construction company which the fund took over after receiving €38 million from the @EIB. 2/14
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Suspicious Spencon payments include $4 million to two companies for 'debt recovery'.

The Director of one of those companies was a driver for Spencon itself - a clear red flag. He later said he was told the money would be used to pay public officials.3/14
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This debt recovery company did not even have a bank account when it initially invoiced Spencon for work.

Payments instead went to the private account of the Spencon driver who acted as Director. 4/14
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ECP Africa executives waved through suspicious payments despite these clear signs of corruption.

The debt recovery companies Spencon hired charged fees far higher than legitimate companies in Kenya doing the same work - yet ECP signed them off anyway.

They knew. 5/14

Whistleblowers within Spencon - supported by @Counter_Balance and The Corner House - first warned the @EIB about the corruption ECP was ignoring in 2015.

They provided emails, messages and documents as evidence of fraud, bribery and corruption. 6/14
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The @EIB said it would investigate the ECP investment. But it did not interview Spencon's directors or obtain documents despite having the right to do so.

Instead, it remained silent for years before closing the case without explanation in 2020. 7/14
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We complained to the @EIB for not explaining why.

The complaints dept. eventually confirmed that @EIB DID find there was evidence to suggest Spencon's mgmt engaged in criminality and ECP "more likely than not" knew about it.

Yet the bank took no action against ECP anyway. 8/14

The criminality by Spencon's ECP Africa-appointed managers was only made possible by the @EIB's financial support to the fund.

This support was public money.

The EU public have the right to know their hard-earned cash is not facilitating corruption and bribery. 9/14

The @EIB must reopen the case, explain what went wrong with the first investigation and assess ALL evidence of ECP's knowledge of fraud and corruption within Spencon. 10/14
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This alone is not enough.

Corrupt companies, fraudsters, money-launderers and dishonest politicians are all currently free to abuse @EIB investments for their own ends.

Something has to change. 11/14
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It is time we changed EU law to rein the @EIB in.

The bank must become legally accountable to the courts if found to have ignored fraud and corruption.

@Europarl_EN calls for the @EIB to detail how it assess reputational risks should also be heeded 12/14
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The @EIB must also freeze projects and break contracts with corrupt clients.

Our report details what the @EIB can do to fight fraud and corruption in more detail. 13/14
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Finally, the @EIB must stop relying on the private financial sector to spend money on its behalf and call it public investment.

We need a new economic paradigm where public investments put the public first - not shady investors, fossil fuel companies or the super rich. 14/14