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Inter-American Investment Corporation Must Reveal Contracts and Salaries in Vila vs. the IIC

Bea Edwards, April 12, 2013

IDB_logoOn Apr. 5, 2013, the District Court of the District of Columbia ordered the Inter-American Investment Corporation (IIC), the multilateral private sector lending arm of the Inter-American Development Bank (IDB), to turn over documents to Jorge Vila, who is suing the institution. The ruling read:

it is hereby ORDERED that the defendant shall produce to the plaintiff any contracts for consulting services or reports created by consultants that contain references to the work allegedly performed by the plaintiff, the value of the type of work allegedly performed by the plaintiff, or the value of an initiative involving the type of work the plaintiff allegedly performed if the defendant had chosen to pursue it. Contracts and reports that do not contain any of these references need not be produced. It is further ORDERED that the defendant shall produce to the plaintiff any information regarding salaries and bonuses paid to employees who perform work for the defendant that is similar to the type of work allegedly performed by the plaintiff.

The ruling definitively penetrates the legal immunities that have largely protected intergovernmental organizations in the United States from external scrutiny of their contracting practices for decades.

Vila worked under what he and colleagues regarded as a verbal contract at the IIC in 2003. When he finished his assignment, the IIC, protected by its immunities from labor disputes in national courts, refused to pay him. U.S. District court took jurisdiction, however, ruling that the matter was not a labor dispute but rather an unjust enrichment case.

The IIC appealed the ruling and lost in 2009. In fact, the institution has racked up a string of legal defeats each time it has tried to shield its practices and its management from exposure in court. This most recent ruling requires the institution to turn over to the plaintiff information regarding the contracts and salaries of other consultants who did, or who do, work similar to the work he did. 

To GAP’s knowledge, never before has an international institution been obliged to divulge to anyone outside the organization itself the particulars of its contracting procedures. At the United Nations and the World Bank, for example, which operate under the same legal immunities, contracting practices are a black box. While all of these institutions have become more open about contracting and procurement in their development projects, their own corporate governance practices remain a closely held secret.

With this most recent ruling in the Vila case, however, advances in transparency, good governance and accountability may finally occur at IIC, IDB, World Bank and United Nations, all of which have operated outside any national legal system since they were established. In the future, even the possibility that the specifics of various consultants’ assignments and salaries could see the light of day will go a long way toward regularizing the ad hoc corporate procedures that seem to characterize hiring and compensation at both the IIC and the IDB.

The IIC/IDB is going down fighting, however. An important witness in the case has yet to be deposed, despite a subpoena by Vila’s attorney, issued in December, 2012. Jacques Rogozinski, former General Manager of the IIC whom Vila contends was instrumental in the decision not to pay him for work done, departed the United States immediately after leaving his post as General Manager of the IIC in December 2012.

Jorge Vila is represented by Douglas Hartnett of Elitok and Hartnett, LLCArnold and Porter, LLP.represent the IIC and the IDB.

 

Bea Edwards is Executive and International Director for the Government Accountability Project, the nation's leading whistleblower protection and advocacy organization.