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World Bank Alleges Timorese Governor of Campaign Fraud

By Colum Lynch

The governor of East Timor tried to siphon more than $700,000 of public funds into a campaign against the province’s independence from Indonesia, according to World Bank officials and Indonesian government documents.

United Nations officials described the alleged attempt by Gov. Abilio Jose Osorio Soares as a clear violation of a U.N.-brokered agreement on the independence referendum held Monday in East Timor, a former Portuguese colony seized by Indonesia in 1975.

But World Bank officials said that their own inquiry and an Indonesian investigation found no evidence that the governor succeeded in diverting either World Bank loans or Indonesian public funds. Soares declined to take phone calls seeking comment.

The World Bank provided about $1.5 billion to Indonesia last year. In May, its executive board approved an additional $600 million loan to help shore up Indonesia’s foreign currency reserves.

In exchange for the latest loan, Indonesia promised to carry out a “social safety net” program, providing rice, health care and education to the country’s poorest people. On May 21, Soares requested more than $700,000 from that program to finance a pro-autonomy political campaign and to fund anti-independence militias in the districts of Lautem and Ambeno, according to a copy of the governor’s proposed budget.

About 20 percent of the money was targeted for “socialization programs,” a euphemism for the campaign supporting Indonesia’s offer of autonomy, but not full independence, for East Timor. Another five percent was to be disbursed to Pamswakarsa, the civil defense organizations, or militias, frequently denounced by the United Nations as instigators of violence in East Timor.

Bank officials said they began the inquiry after an English translation of Soares’ proposed budget was circulated on the Internet along with a letter falsely implying that the World Bank had approved the governor’s planned use of the money.

“There has been no evidence presented to date linking our money to the militias, just allegations,” said Peter Stephens, a spokesman for the World Bank.

“We have structured lending to ensure that it does not pass through too many hands,” Stephens said. “Is it all leak-proof? Clearly it isn’t. But is it better to stay away and hope for purity?”