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Ethiopia: Response to ECX's statement on the alleged fraud and corruption

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03/27/12

  07:55:05 am, by admin, 1682 words  
Categories: Ethiopia

Ethiopia: Response to ECX's statement on the alleged fraud and corruption

Response to ECX's statement on the alleged fraud and corruption
 
By Wondwossen Mezlekia
 
March 27, 2012

 
The statement by Ethiopia Commodity Exchange (ECX) in response to the recent article titled “Is the government serious about fighting corruption? The case of alleged fraud and corruption at the Ethiopia Commodity Exchange," is commendable in many ways. To start with, the statement was issued by the company's External Relations Manager on behalf of ECX, effectively delineating the roles of company communications from the CEO's interactions with persons and entities outside of the company. This etiquette and separation of duties is a step in the right direction. In addition, and most importantly, the civility and courage in which ECX came out to publicly defend itself on an obviously painful subject is a manifestation of ECX's emerging maturity as an institution. I tip my hat to ECX for its participation in nurturing a culture of engaging in dialogue by breaking away from the age-old political culture of ours, where emotions triumph over objectivity, and differing views are not tolerated.
 
When it comes to its content, however, the statement does not provide any new information that wasn't already uncovered during the research previously conducted for the article, so it won't affect the fundamental questions raised in the article. Leaving the sometimes self-contradicting and irrelevant assertions aside, the main points of the response are: 1) the article “has overstepped the boundaries of factual and honest commentary” because it failed to disclose the conversation I had with ECX’s CEO; 2) the extension of the bid submission date by one month was what caused Millennium IT's bid security validity period to miss the requirement by 30 days; 3) the World Bank canceled the award because no other bidder was considered responsive by its standards; 4) the bid approval process involved four layers of controls with an extensive review period; 5) the oversight of Millennium IT's bid security validity period was a minor technicality in comparison to the complex parameters evaluated;  and 6) the fact that both the World Bank and the Prime Minister’s Office had conducted full investigations in 2011 is well known and sufficient. I will address these by briefly discussing each point.
 
1) The article omits references to the CEO's explanation
 
It is true that I had the privilege of speaking on the phone with the ECX’s CEO in January 2012 during which time we discussed a range of topics. When I raised the complaints surrounding the said bidding process, the CEO's expressed reaction was a mix of astonishment and disbelief that I knew about the issue and the conversation about this particular issue effectively ended. I saw no point in pursuing it any further after the CEO said, "I am uncomfortable discussing the details of a matter that is being investigated". I totally agreed and quickly moved on to another policy related issue, which happened to be of interest to both of us, and discussed it at length. It was a cordial and very productive call that I valued and appreciated. At the end of the call, the CEO made it a point to remind me that the conversation was off the record, to which I responded affirmatively and kept my promise; thus the omission of any reference to that conversation in my article. How can I be accused of not mentioning it in the article if I was also expected to keep my word to the CEO?
 
For what it’s worth, I could have insisted and asked the CEO to go on record with or without a comment, but any information that I may have gathered would not be of material value as it only represents ECX's version of the story which I am already aware of. I had knowledge of the allegation for quite some time and had tried in vain to get the government's response on the status of the case; thus the need for the public scrutiny.
 
2)  The extension of the bid submission date by one month is what caused Millennium IT's bid to miss the requisite
 
This is inaccurate. As clearly indicated in the bid document, the bid security must be valid for at least 148 days after the date of bid opening. In this case, the tender that was advertised on May 3, 2010 had the bid opening date set for June 15, 2010. The opening date was later extended to July 12, 2010. Millennium IT's bid security, which was due to expire on October 9, 2010, would have been short of the required validity period of 148 days even if the bid opening date had not been extended.  
 
3)  The World Bank canceled the award because no other bidder was considered responsive by its standards
 
The processes of cancelling a proposal for award and awarding a contract to the next responsive bidder are two distinctly independent and mutually exclusive activities. The World Bank cancels a proposal for award and the portion of the loan allocated to the contract when it determines that the bidder and the borrower have engaged in corrupt, fraudulent, collusive, coercive or obstructive practices. It is not clear if the World Bank had considered awarding the contract to another bidder, but according to its email, the award was canceled because the World Bank "takes allegations of fraud and corruption seriously." Therefore, the presence or lack of another qualifying bidder had no bearing on the World Bank's decision to cancel the award.
 
Additionally, it is misleading to assert that there was no other responsive bidder. As it happens, there were at least two other qualifying bidders whose bids were responsive enough to satisfy the initial evaluation requirements, at the point where Millennium IT's bid should have been disqualified. It may be difficult to draw conclusions on whether either of the bids meets ECX's technical requirements without reviewing the results of the technical evaluation, but it is evident from the bid documents that the bids submitted by CMA Small Business Systems and Securities and Trading Technologies were both responsive as per the bidding guidelines. Interestingly, the opening bid price offered by these bidders was even less than Millennium IT's price by USD 1,133,393 and USD 1,585,105, respectively. Millennium IT's opening price was USD 3,585,105, which was further boosted up by USD 1,270,695 to a total cost of USD 4,855,800.
 
4) The bid approval process involved four layers of controls with an extensive review period
 
ECX seems to be suggesting here that the “minor technical error” by the bid evaluation committee had also been overlooked by everyone in the bid approval process that involved four layers of controls and an extensive review period of over six months. What this confirms is the significance of the second line of defense in risk management which is the readiness to intercept fraudulent activities after the fact as it was effectively demonstrated by the World Bank's action to promptly cancel Millennium IT's award. Apparently, one of those layers, which happens to be the World Bank, knows the difference between an oversight and fraud. And that is why ECX's alleged fraud and corruption needs to be investigated by the Federal Ethics and Anti-corruption Commission.
 
5) The oversight of Millennium IT's bid security validity period was a minor technicality
 
The oversight of the invalidity of the bid security may be claimed to be a minor technical error, but the subsequent cover-up acts are suspicious.
 
Asking all bidders, the winner and the ones who had already known that their bids were rejected alike, to extend the bid security validity after the completion of the evaluation is deliberate. It seems that ECX had chosen to fix the records in a way that would outwardly qualify Millennium IT's bid for evaluation rather than taking corrective measures as soon as the invalidity of Millennium IT's bid security was pointed out by the complainant bidder. This is not a minor technicality.
 
6) The World Bank and the Prime Minister’s Office had conducted full investigations and that should suffice
 
The World Bank's investigation is not sufficient as the sole purpose of such an investigation is to protect the Bank's own business as evidenced in this case by the Bank’s action to cancel ECX's proposal to award the contract to Millennium IT and secure its money. As a sovereign nation, it is the government’s responsibility to investigate every allegation of fraud and corruption in the public's interest and hold purported perpetrators accountable. In Ethiopia, the Anti-corruption law is cut and dry and the duty of the executive branch of the government is to implement the law impartially, without cherry picking to afford preferential treatments to some suspects over others. Unfortunately, this sense of fairness and rule of law is what has been missing in Ethiopia.
 
According to the revised proclamation for the establishment of the Federal Ethics and Anti-corruption Commission, investigating and prosecuting alleged or suspected corruption offenses committed by public officials or employees is the duty of the Commission, not that of a de facto investigation committee. The difference between the two is that the former is bound by law, at least supposedly, to prosecute anyone suspected of committing a crime of corruption, whereas the latter is an informal administrative body that can only serve the government’s political purposes. That is why the handling of ECX's alleged fraud and corruption outside the Commission’s jurisdiction becomes very suspicious and concerning.
 
The purpose of the article to which ECX responded is to publicly make the case for why the alleged perpetrator(s) at ECX should be treated like anyone who is suspected of corruption as provided by Article 25 of the Constitution which guarantees that "all persons shall be equal before the law and shall be entitled to equal protection of the law without any discrimination whatsoever."
 
ECX cannot be the defendant and plaintiff at the same time. So, instead of trying to cast doubt on the article's integrity with hopes of mystifying the alarming phenomenon it has publicized, it would be better if ECX just steps aside and let the authorities join the discourse and help restore the public's trust.

Read more on ECX and the government at: http://poorfarmer.blogspot.com/p/ecx-watch_15.html

For questions or comments: poorfarmer@gmail.com

15 comments

Comment from: thatisit [Visitor]
thatisit

That is it!!!!
This kind of knowledgebased, solid, fact based, honest and bold discussion and action which moves us in real the bit of inch forward!!!
Thank you so much!!

PS. The likes of the so called Professor Al and other wana be oppossion should learn a lot from this or shut their dirt mouth. They are no contributing anything. In that case I take my hat for those who DO and make mistake!

03/27/12 @ 15:19
Comment from: Doromata [Visitor]
Doromata

How could you say, …"the civility and courage in which ECX came out to defend itself…” Mr Mezlekia, when, in fact, the rebuttal sadly begins with a rude introduction of you as a
an “also a self-professed coffee blogger and activist who, in his view, is helping to improve the lives of coffee farmers in Ethiopia.”

ECX has miserably lost my confidence in its capacity to represent the truth in its attempt to address the issues raised by you.

03/27/12 @ 23:59
Comment from: t7 [Visitor]
t7

ECX was cornered. Thier back against the wall, they have nothing but fight back and wish this whole thing just go away. There is a lot at stake here: reputation, reputation and reputation, and lady CEO, coming from better background than the rest, would not let such tarnishement prevail. This has been one fascinating story and painful one. It would not be surprising if the perpertraors are other than the CEO and that she would ultimately be the fall lady. Lady-like and Chewa, if the going gets tough, she might just walk away from it all. How can one survive in present day Ethiopia, no matter how strong your good will, and render a staying power against all odds

03/28/12 @ 00:29
Comment from: Visitor [Visitor]
Visitor

This is a healthy discussion.
and that’s what was missing in our society now adays.

03/28/12 @ 00:31
Comment from: Ezana [Visitor]
Ezana

The point referenced to in section (5) above: How could it be a “minor technicality” when the provision could invalidate the bid and did?

03/28/12 @ 00:52
Comment from: Wetu Enewta [Visitor]
Wetu Enewta

An impressive and decisive response by Wondwossen Mezlekia ! The ECX tried to hide under a mountain of obfuscation and mambo-jumbo with its press release just as it tried to hide its corrupt practices by claiming ‘oversight’. The trouble is that it faced the truth in the form of this man who not only had the facts but also used his analytical abilities to shine light on an otherwise murky world of corruption, deceit and manipulation. It is reported that around the 1860’s Americans used to say that ‘God created all men, but Colt made all men equal’–an allusion to the power and usefulness of the Colt side arm. The ruling party in Ethiopia may think that it could hoodwink Ethiopians cold and brutally, but it is people like Wondwossen and others that will eventually DE-fang it because they have the facts as well as know how to use it.

There is nothing more abhorrent and anti-poor than corruption, graft and bribery. Its victims are the poor and the powerless. A lot of debt is assumed in the name of the poor, but the beneficiaries are the elite–the daylight thieves whose only objective is to harness personal wealth. Ethiopians will someday demand and declare that all the debts that the country has amassed since 1991 to be ‘odious’ debts–debts not in the service of the nation. In the meantime, I call on Eleni to do the honorable thing both for herself and her profession: tender your resignation!

03/28/12 @ 04:20
Comment from: Extraterrestrial [Member]  

If the exaggerated and deceptive statement by ECX “extensive and open dialogue” with Ato Mezlekia was just “I am uncomfortable discussing the details of a matter that is being investigated” then for sure ECX was lying. There is absolutely no evidence ECX had extensive and open dialogue with Ato Mezlekia and no ground for the allegation of omission of this dialogue.

What the hack is “minor technicality"? Isn’t that is where the devil is hiding, isn’t the minor technicality the tip of the iceberg?

ECX are you tying to deceive us, is the matter still under investigation? We want a clear information of the issue at stake and please make a real and sound explanation of what is happening?

My biggest worry is if ECX is corrupt and up to covering up its sickness then it is possible to say there are proper looting going on of the Ethiopian poor in other less transparent and less accountable institutions.

ECX you are on fire, you better talk sense!

03/28/12 @ 05:14
Comment from: Biya [Visitor]
Biya

Dear. Mr Mezlekia

Thank you so much for the wonderful article, and your carefully chosen and articulated words. This type of dissection is what has been missing in our society and political system today.
Even though I support the government in some areas, I know in my heart corruption is the biggest issue that made Africa the poorest of poor! We the Ethiopian people need to realize this and raise questions in a time like this. Let’s not be sole blind supporters. Corruption is the main reason why the gap between the have and the have not is getting bigger by the day!!!!! You live in my city and I hope to meet you someday.

03/28/12 @ 05:38
Comment from: Ethiopia [Visitor]
Ethiopia

dear sir Wondesen Mezalekiya

we all proud of you, Ethiopia is lucky to have a honest person like you sir,for all this we thankyou.

03/28/12 @ 06:26
Comment from: ABC-HAHU [Visitor]
ABC-HAHU

Kudos Wondwossen.
Excellent writer free from bias, a lot to be learned from this young man like Jawar Mohammed. Keep it up, that is the way we should address and tackle our many problems not only coffee issues.

Cheers

03/28/12 @ 07:45
Comment from: woldeyesus [Visitor]
woldeyesus

Very good job, Ato Wondwossen!
I also tip my hat to you, sir.
I only wish all our exchanges of views and ideas are as civil as this one. Ethiopians, especially those who are in a position to be able to influence the thought of many, please understand you can set the tone either way. Respect and trying to be as truthful as humanly possible should be the way going forward. Only because we disagree doesn’t mean we have to be at each other’s throats like some maniac beasts.

Also, supposedly being a religious country, let’s keep in mind the following from the wisest of men.

“A soft answer turneth away wrath: but grievous words stir up anger.” (Proverbs 15:1)


03/28/12 @ 09:58
Comment from: kawkawqim [Visitor]
kawkawqim

Years ago, Zinawi made a career choice and went on his distructive way and became a notorious criminal.

First,he started out by becoming a bandit;he then quickly upgraded his criminal status to being a robber.In 1991,he and armed men and women of his held Ethiopians at gun point and practically held millions of Ethiopians at gun point.The out- laws remained criminals to this day.This man,Zinawi is still at large wanted for assortments of crimes that he committed on Ethiopians.

Because the digust we felt since the robbers invaded Ethiopia,in 1991,we embarked on the struggle that we respect and adore that will for sure lead us to a victory on our common enemy.

Today,we observed the enemy evicted Ethiopians in large quantities from their farmlands;we observed the enemy stealing billions of dollars and kept it in its bank account;we observed the enemy jailing citizens;we observed the enemy killing everyone and everybody for standing for human dignity and right;we observed the enemy shrinking the size and the body of our motherland;we observed the enemy selling our children to Arab world.

Hundreds of citizens are currently dumped on the streets with their little children and left homeless.This, social disintegration has been designed and planned while the enemy was in the jungle,and had the enemy put it into practice for millions of Ethiopians to watch and witness the distruction on human life the enemy wanted us to see in horror.

Our common enemy,it is the enemy what it has been and what it will be.This anti-Ethiopia nature and stand of Zinawi and his men and women surround him have now on its highest stage to all of us to make a note of it.The enemy came into Ethiopia with a lot of guns and bullets to loot and murder Ethiopians;what the enemy is doing right now is not the last one;it is just the beginning of distroying all that we are and all that our country has.

Zinawi,although at large,he did not commit attrocities and genocides sleepwalking;oh! no! Zinawi is committing all kinds of crimes with full knowledge of him going to jail.He clearly distinguishes between bad and good and justice and injustice,but since he hated Ethiopians in depth and wanted to satisfy himself with joy of murdering Ethiopians,he continued committing crimes to this day.

Our struggle is to completely defeat our common enemy to its permanent distruction.The guns and the bullets and the corruption must be crushed and grinded into millions of tenuous dusts.

Our strong desire has been manifested in the ongoing struggle against our common enemy that we commenced years ago;what we started together will be carried out collectively because victory is the end result of our fight against the enemy;victory will rise upto the tip of mountains and remain there shining upon our dear Ethiopians who gave their lives to the freedom of citzens and the freeing of lands they live in.Our freedom will live on;our enemy will live and die in its own grave that it is digging knowingly or unknowingly.

Corruption is one of the pillars of the suppressive and oppressive system on which it was built and rested on,as guns and bullets that the enemy armed to its with is.The enemy will not demolish its own house and become burried under the debris of the house it burned down;rather,it is Ethiopians who must and can demolish all the pillars of evils that the enemy erected on the lives oof Ethiopians.

Dr.Eleni is reinforcing the pillars of suppression and oppression by reinventing new skills and knowledges and transfer it to the man,Zinawi, who has already had a mastery of murdering and looting citizens and country and whose seeking an expertice from Dr.Eleni to help him expand his finacial empire capabilities by amalgamating EFFORT and ECX into one effectively lethal tools of exploiting coffee and grain farmers and peasants to the point of bankruptcy.

Dr.Eleni has effectively transferred her skill and knowledge to the mafias who built and ran EFFORT.Today,everything and anything that is available below and above the land is owned,controlled,and run by the mafia group that run EFFORT.ECX runs and manage by mafia bosses,such as Zinawi and his men and women surrounding him.The woman,Dr.Eleni promised the grain and coffee farmers to enrich them with wealth and health and convinced them to handover their trust to her;when farmers did give their trust and fruits of labor not knowing what actually had been going on behind thier life and future of their families,their life had tipped off the balance on Dr.Eleni ECX came to a standstill on the corruption that hit on the head.Sad,sad and sad.

Coffee output reduced by 33%;the moral and energy of coffee farmers dramatically reduced to hopelessness;coffee export declined by 45%.What does it feel like broke like coffee and grain farmers?

03/28/12 @ 14:32
Comment from: Tulu Proud ET [Visitor]
Tulu Proud ET

All these Woyane thieves must Go.

Dr. Eleni another corrupted thief!!
Enough with corruptive regime. Revolt!!!
Throw out the land thief Woyane regime.

03/28/12 @ 20:17
Comment from: yrtfg [Visitor]
yrtfg

When sitting with folded hands and think of the whole saga or the tragedy,it looks like the mafia Boss and his men and women have locked Dr.Eleni,the CEO of the tragically failed thing called ECX in piggy-box for a sunny day,after the passing rain gone.

The word research is another key word- Did Dr.Eleni,the mother who gave birth to ECX and obviously,the brain behind the creation or can we call it,invension? Anyway,whatever initially she had in hear head and belly to create and nurture the baby ECX,why did not she do a reasearch on the background of Zinawi and his men and women before she hurringly embarked on a thing that would fail? At least,she should have contemplate this:- Should I go,should I stay, after this she must have answered What if?

Dr.Eleni,the CEO did not give a chance for herself to save her own future career.This is about her future choice to work for a company or organization that provides her with a good working condition and a handsome pay,to mention just few.What would the disgraced CEO,Dr.Eleni brning to her future employer? Who would she give a reference to her new employers,if a chance comes along? What would she reply to her employers,if she is asked this - How quick were you in noticing errors committed either by you or by any other office partner? What steps have you taken to correct the problem? What was the potential sources of the error?

Who is the real loser? Is it Zinawi, the robber or Dr.Eleni, the CEO?

For sure,Zinawi will not lose a thing if Dr.Eleni runs away because he got every little ticks and skill to make him a skilled cheater in the future;it is a tranferable knowledge and skill that he freely got from the CEO,but it does not mean Dr.Eleni can not defend herself,if indeed she comes to her sense and decides to take Zinawi to international court with good faith;however,she must also consider the other side of her carelessness in not digging into the real Zinawi.If the judge asks Dr.Eleni wheather she has heard of Zinawi stole $11 billion dollar from 80 million people or she did not hear but read from media,and what has she done to think and say wheather working with Zinawi would be a risk or not,God knows what she will answer.

03/29/12 @ 03:34
Comment from: abca [Visitor]
abca

Professional, that is how I would describe Mr Mezlekia’s presentation.

Rent-seeking would say the prime-minister and here he has a collossus of a rent on his lap and he is all mum.

Thank you, Mr Mezlekia for keeping the eye on the prize.

03/29/12 @ 20:32

rebtel

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