National Security

Mutiny in Kabul

An exclusive report on the troubled security team at America's most important embassy.

Private guards responsible for protecting what may be the most at-risk U.S. diplomatic mission in the world -- the embassy in Kabul, Afghanistan -- say security weaknesses have left it dangerously vulnerable to attack.

In interviews and written communications with the Project On Government Oversight (POGO), current and former guards said a variety of shortcomings, from inadequate weapons training to an overextended guard force, have compromised security there -- security provided under a half-a-billion-dollar contract with Aegis Defense Services LLC, the U.S. subsidiary of a British firm. "[I]f we ever got seriously hit [by terrorists], there is no doubt in my mind the guard force here would not be able to handle it, and mass casualties and mayhem would ensue," a guard serving at the embassy wrote in a late November message to POGO.

In July, dissatisfaction boiled over when more than 40 members of the embassy's Emergency Response Team signed a petition sounding an alarm about embassy security, people familiar with the document said. The petition, submitted to the U.S. State Department and Aegis, expressed a "vote of no confidence" in three of the guard force leaders, accusing them of "tactical incompetence" and "a dangerous lack of understanding of the operational environment." Two guards say they were quickly fired after organizing the petition, in what they called "retaliation."

A State Department document obtained by POGO describes a "mutiny" among guards who defend the Kabul embassy -- an apparent reference to the petition, though the document does not explicitly mention it. Dated July 18, 2012, and labeled "SENSITIVE BUT UNCLASSIFIED," the document says that the mutiny was "baseless" and that it "undermined the chain of command" and "put the security of the Embassy at risk."

The allegations that the Kabul guards made in their interviews with POGO are all the more disturbing in the wake of congressional and public outcry over the lax security that may have contributed to the deadly attack on Ambassador Christopher Stevens and three others in Benghazi, Libya, last September. The official postmortem released by the State Department's independent commission in December painted the Benghazi facility as a casualty of bureaucratic neglect, and the assistant secretary of state for diplomatic security resigned. But the situation described by guards in Kabul suggests that diplomatic security problems go far beyond a makeshift, overlooked outpost in eastern Libya.

Following the Benghazi attack, the State Department dispatched teams to assess security at a number of diplomatic posts -- but not to the Kabul embassy because, according to the department, security was already heightened there.

The guards' charges are simply the latest chapter in the ongoing saga of the Kabul embassy.

Kabul Embassy Security Memo

In 2009, Aegis's predecessor as the security contractor there, ArmorGroup North America (AGNA), became embroiled in controversy after POGO documented security shortcomings similar to those alleged by Aegis guards -- from a breakdown in the chain of command to long hours, low morale, and alleged retaliatory firings. The organization's investigation also brought to light lurid photographs of guards engaged in nude, apparently drunken revelry and sexual hazing.

Testifying before a federal commission in September 2009, an executive of AGNA's parent company, Wackenhut Services, said there were "no excuses" for the guards' "misbehavior" and he was "not here to defend the indefensible." Although AGNA "suffered from many contractual compliance issues," Wackenhut Services Vice President Samuel Brinkley said in written testimony, "the security of the Embassy was never at risk."

The State Department chose a replacement for AGNA in 2010 only to conclude months later that the replacement company would be unprepared to begin work on schedule. Aegis was awarded the task in July 2011 and finally took over Kabul embassy protection in June 2012. But according to the Aegis guards, it rapidly became clear that the security situation was untenable.

Aegis declined to answer questions for this report. "Per our contractual obligations, all questions and inquiries regarding this contract should be directed to the Department of State's Public Affairs Office," company spokesman Joshua C. Huminski wrote.

In a written response to questions, the State Department said that a regional security officer assessed operations at the embassy and "determined that security policies and procedures are sound."

The department said it takes seriously the concerns of Aegis personnel. After receiving the petition, the embassy conducted roundtable discussions "with those who wanted to voice their concerns." According to department, it "did not request the removal of any contract personnel for voicing their concerns or signing the petition." Some individuals, it said, "have been removed for other reasons."

***

An atmosphere of danger pervades everyday life for U.S. personnel in Kabul. Almost a year to the day before the Benghazi attack, insurgents fired rocket-propelled grenades at the U.S. compound in Kabul. And on Nov. 21, a Taliban suicide bomber claimed three victims only blocks from the U.S. Embassy. A former senior U.S. official who served at the embassy said that security is designed to defend the facility "against direct assaults, one or two or more.… But a … breach in the [embassy] wall followed by a group of suicide bombers, that would be a close call.… That would be a bad day."

The sprawling, heavily fortified facility reflects the threat -- barbed wire, bomb-sniffing dogs, machine gun emplacements, perimeter walls, and towers. The lives of about 1,500 embassy employees -- American and local staff -- are on the line.

As in U.S. embassies around the world, there is a small contingent of U.S. Marines, but their main mission is to protect the chancery and destroy classified materials in the event of a breach. The embassy's defense falls principally to hundreds of American and foreign contract guards -- including approximately 100 members of the Emergency Response Team, according to guards POGO interviewed -- overseen by the State Department's Bureau of Diplomatic Security.

In Kabul, the embassy guard force is run by Aegis Defense Services under a federal contract that the State Department said has a "current value" of $497 million. (The full scope of that contract, awarded in July 2011, is unclear; the State Department said it is for security services in Kabul "for one base year plus four option years," but the department has not responded to a request for clarification.) Aegis has also provided a variety of security services to U.S. efforts in Iraq.

In interviews and emails for this report over the past few months, about a dozen current or former ERT personnel -- all of whom said they are former law enforcement officials or U.S. military veterans who had served in Iraq or Afghanistan -- said they have been worried about the state of security at the embassy. They requested anonymity to avoid retaliation or career setbacks.

One of the biggest problems, guards say, is that their team has been stretched dangerously thin by long hours for days on end and too few people to do the job. Guards have worked 14- and 15-hour workdays, for six or even seven days a week, with limited days off or leave time, sources said. That, in turn, has led to high job turnover, low morale, and other problems, they said.

"It wears you out," said a former guard and Special Forces veteran now in the United States. "People's concentration goes away.… They can't maintain focus at all."

"The impact on security is that people are glazed over, and they can't protect the facility," he added.

A 2010 Bureau of Diplomatic Security document says that the normal government-prescribed workweek for private guards overseas is 72 hours -- 12 hours per day for six days per week. It said contractors were responsible for ensuring that their personnel did not exceed those standards -- except under emergency conditions and with authorization.

Guards said that they were directed to record 12-hour workdays, even though they actually worked for 14 hours or more per day. They said that after working a six-day week, they have often worked a seventh day without pay. In comparison, for Marine security guards, a State Department manual posted on the department's website contemplates "an individual guard workload factor of 36 to 42 hours per week."

The State Department told POGO that no Aegis guard is scheduled to work more than 12 hours per shift. However, during the initial transition from AGNA to Aegis, the department said, "some contract personnel were required to work additional days, partly due to the need for intensive in-service training."

"Through Government oversight, contract adjustments, and Aegis' adherence to contract requirements, the number of hours and days the guards worked were limited to contract requirements, and the Department maintained its primary objective of ensuring the safety and security of the Embassy," the department said.

Several members of the protective force also said they and other guards were rarely if ever given an opportunity to go to the firing range to "qualify" in their use of weapons -- in other words, demonstrate an ability to hit targets. In addition, they said they were often prevented from "zeroing" -- or properly sighting -- guns and optical scopes. One alleged that even "sharpshooters on the embassy roof did not have zeroed weapons."

"Without a zeroed weapon, I can't defend myself or the embassy," said a former guard.

According to one guard who left last summer, some of his colleagues had "never fired their own weapons."

Others said they were alarmed by a failure to properly inspect vehicles for explosives as they entered the embassy compound. "The whole bomb-detection operation at the embassy is disorganized and needs to be looked at to prevent a major incident," said a veteran dog handler who left Kabul in August. "This is a Pandora's box. The embassy is a target where they could have another Benghazi, or worse."

The State Department said all canine alerts are "backed-up by technical means" to determine what steps should be taken.

The department acknowledged that the number of "designated defensive marksmen" (DDM) -- sharpshooters -- declined at one point, adding that it "utilized alternate DDM assets to augment security."

As for time at the firing range, the department said that the availability of ranges in Kabul "is dependent on the security situation, and Aegis had to adjust scheduled re-qualifications." But the department denied that any Aegis personnel have been prevented from requalifying "on their assigned weapons systems."

"All weapon systems are calibrated before being put into service," the department said.

Guards said they voiced concerns about embassy security in regular daily meetings with State Department officials and Aegis supervisors.

In July -- about a month after Aegis had officially begun protecting the embassy -- they put their fears in writing, having quickly determined that the situation was unsafe.

Their petition, signed by some 40 guards, began by accusing leaders of creating "a hostile divided work place." For example, it alleges that guard force leaders live in comfort at the embassy while the rank and file are confined to Spartan barracks several miles away and forced to eat unhygienically prepared food that guards have told POGO regularly made them ill.

More significantly, the petition speaks broadly of leaders' "tactical incompetence" and "dangerous lack of understanding of the operational environment."

One of the most serious allegations in the petition describes a senior Aegis security supervisor who posted details about the embassy's defenses on the social media site LinkedIn. The disclosure included "exact force protection numbers," the petition says. The petition calls the disclosure "an operational security violation" that "threatens the lives" of the guards and "placed hundreds of American personnel at the Embassy in potential harm's way, should it end up in the hands of any anti-American extremist."

POGO obtained a copy of what was said to be the LinkedIn posting. If it was posted on the site, it has since been removed.

The petitioners pleaded for help from the government and their employer. "It is the duty of DOS [Department of State] and AEGIS to protect those Embassy personnel and the ERT [Emergency Response Team] that may have been placed in harm's way."

The petition does not explicitly discuss some of the fears that came across most forcefully in POGO's interviews with guards -- such as their assertion that the guard force has been stretched dangerously thin.

The text of the petition concludes by invoking the 1989 Whistleblower Protection Act, which, under certain circumstances, shields from retaliation government employees who expose mismanagement, abuse of authority, or danger. Unfortunately for the petitioners, only recently have federal whistle-blower protections been extended to State Department contractors.

One guard who helped organize the petition told POGO that shortly after the document reached the State Department and Aegis, he was summoned to appear in front of half a dozen Kabul-based Diplomatic Security officers and an Aegis supervisor. He said he was "grilled" for roughly 90 minutes about what had happened and his own role. That night, he said, he worked a regular shift, only to be awakened the next day and told he would be fired and had 90 minutes to get on a plane out of Kabul.

Roughly a week later, on July 18, the State Department addressed a "MEMORANDUM for Record" to Aegis calling for the "release" -- apparently meaning dismissal -- of another guard who has been described to POGO as a leader of the petition drive and a veteran of the U.S. Army and federal law enforcement.

That memo, a copy of which was obtained by POGO, said the guard held "a critical leadership position." It added that he "was instrumental in leading a baseless mutiny against the senior operational leadership of the guard force, which undermined the chain of command and ultimately put the security of the Embassy at risk."

"I was definitely retaliated against," the guard named in the memo said. "I was bringing up issues to the [State Department's] regional security officers that they did not want to hear about. They asked me, 'Did I sign the petition.' I said, 'Yes.' Then I got fired." The guard did not want to be named in this report to avoid professional repercussions.

Two guards who said they did not sign the petition but were nevertheless critical of embassy security at staff meetings say they were told that if they did not leave the Kabul guard force voluntarily, they would be fired. They have since returned to the United States. "I was terminated for telling the truth," one of them said.

***

Partly as a result of the scandal involving Aegis's predecessor, the congressionally mandated bipartisan Commission on Wartime Contracting in Iraq and Afghanistan held a hearing and warned in 2009 that the system was broken, in part because it called for approving the lowest acceptable bid. This in turn encouraged companies to "under-bid" to win awards and then "use every means possible to limit costs."

Although Congress subsequently allowed security contracts, including the Aegis contract, to be awarded on a more subjective basis, the allegations from the Kabul embassy guards suggest that problems with private contractors persist.

In December, as a review board reported its findings about the Benghazi fiasco, Secretary of State Hillary Clinton wrote that after the attack "we took immediate steps to further protect our people and posts in high threat areas, working closely with the Department of Defense."

Deputy Secretary of State Thomas R. Nides later testified that some 225 Marines would be sent to so-called medium- and high-threat posts, "where they will serve as visible deterrents to hostile acts." The State Department is also seeking to hire more than 150 additional diplomatic security personnel, an increase of 5 percent, he said.

It remains unclear, however, what specific steps have been or will be taken to reinforce security at the embassy in Kabul. A State Department spokeswoman declined to say.

"We do not release details about our security procedures," the department said.

As part of the broader response to the Benghazi killings, Nides testified that the government dispatched teams to assess security at 19 posts in 13 countries.

Apparently, the embassy in Kabul was not one of them.

The State Department told POGO that security was already heightened at that post and therefore "it was determined that the inter-agency assessment teams would be best utilized at other locations."

When asked about increased security at the Kabul embassy, one guard wrote POGO on Dec. 21, saying, "No I have not seen an increase of security at all, in fact probably a decrease with everyone quitting and such."

Clinton, who has been recovering from a concussion and blood clot, is scheduled to testify about Benghazi to Congress next week.

SHAH MARAI/AFP/Getty Images

Investigation

Can You Fight Poverty With a Five-Star Hotel?

The story of how the World Bank's investment arm hands out billions in loans to wealthy tycoons and giant multinationals in some of the world's poorest places.

Accra is a city of choking red dust where almost no rain falls for three months at a time and clothes hung out on a line dry in 15 minutes. So the new five-star Mövenpick hotel affords a haven of sorts in Ghana's crowded capital, with manicured lawns, amply watered vegetation, and uniformed waiters gliding poolside on roller skates to offer icy drinks to guests. A high concrete wall rings the grounds, keeping out the city's overflowing poor who hawk goods in the street by day and the homeless who lie on the sidewalks by night.

The Mövenpick, which opened in 2011, fits the model of a modern international luxury hotel, with 260 rooms, seven floors, and 13,500 square feet of retail space displaying $2,000 Italian handbags and other wares. But it is exceptional in at least one respect: It was financed by a combination of two very different entities: a multibillion-dollar investment company largely controlled by a Saudi prince, and the poverty-fighting World Bank.

The investment company, Kingdom Holding Company, has a market value of $12 billion, and Forbes ranks its principal owner, Prince Alwaleed bin Talal, as the world's 29th-richest person, estimating his net worth at $18 billion. The World Bank, meanwhile, contributed its part through its International Finance Corporation (IFC), set up back in 1956 to muster cheap loans and other financial support for private businesses that contribute to its planet-improving mandate. "At the World Bank, we have made the world's most pressing development issue -- to reduce global poverty -- our mission," the bank proclaims.

Why, then, did the IFC give a Saudi prince's company an attractively priced $26 million loan to help build the Mövenpick, a hotel the prince was fully capable of financing himself? The answer is that the IFC's portfolio of billions of dollars in loans and investments is not in fact primarily targeted at helping the impoverished. At least as important is the goal of making a profit for the World Bank.

I reached this conclusion after traveling to Ghana -- in many ways typical of the more than 100 countries where the IFC works -- to see firsthand the kinds of problems the World Bank's lenders are supposed to tackle and whether their efforts are really working on the ground. I pored through thousands of pages of the bank's publicly available reports and financial statements and talked to dozens of experts familiar with its performance in Ghana and many other countries.

In case after case, the verdict was the same: The IFC likes to work with huge corporations, funding projects these companies could finance themselves. Its partners are billionaires and massive multinationals, from oil giants like ExxonMobil to Grupo Arcor, the huge Argentine candy-maker. Its projects include not only glitzy hotels and high-end shopping malls, but also gritty gold and copper mines and oil pipelines, some of which end up benefiting the very corrupt, authoritarian regimes that the rest of the World Bank is urging to change. Nearly a quarter of the IFC's paid-in capital from member governments -- now standing at $2.4 billion -- came from U.S. taxpayers, and every president in the World Bank's 69-year history has been an American. But the United States has had little complaint with these practices, even when they have become a subject of public controversy.

Not long ago, the World Bank's internal watchdog sharply criticized the IFC's approach, saying it gives little more than lip service to the bank's poverty-fighting mission. The report, a major 2011 review by the bank's Independent Evaluation Group, found that fewer than half the IFC investments it studied involved fighting poverty. "[M]ost IFC investment projects generate satisfactory returns but do not provide evidence of identifiable opportunities for the poor to participate in, contribute to, or benefit from the economic activities that the project supports," the report concluded. In fact, it said, only 13 percent of 500 projects studied "had objectives with an explicit focus on poor people," and even those that did, the report found, had a "limited" impact. The IFC did not dispute the conclusions.

There is certainly need in countries like Ghana, whose per capita GDP ranks in the bottom third of the world, with life expectancy in the bottom 15 percent and infant mortality in the bottom fourth. The IFC committed about $145 million in loans and equity in Ghana just in fiscal year 2012. Yet Takyiwaa Manuh, who advises the Ghanaian government on economic development as a member of the National Development Planning Commission, told me she doesn't think of the IFC's investments "as fighting poverty. Just because some people are employed, it is hard to say that is poverty reduction."

But the policies continue. Why? Tycoons and megacompanies offer relatively low risk and generally assured returns for the IFC, allowing it to reinvest the earnings in more such projects. Only a portion of this money ends up benefiting local workers, and critics contend that the IFC's investments often work against local development needs. "The IFC's model itself is a problem," says Jesse Griffiths, director of the European Network on Debt and Development (Eurodad), a Belgian-based nonprofit. "The IFC undermines democracy with its piecemeal, top-down approach to development that follows the priorities of private companies."

"We're not saying we're perfect," Rashad Kaldany told me. He is a veteran IFC executive and currently its vice president for global industries. The IFC operates "at the frontier," he said. "We know that not every project will work. It's about trying to make a difference to the poor and about achieving financial sustainability" -- twin goals that are challenging in combination.

When it comes to luxury hotels like the Mövenpick in downtown Accra, however, the IFC offers no apology for its investments, even making the case for them as an economic boon for poor countries. A January 2012 report from the World Bank says hotels "play a critical role in development as they catalyze tourism and business infrastructure," noting its partners include such "leading" firms as luxury chains Shangri-La, Hilton, Marriott, InterContinental -- and, of course, Mövenpick.

In Accra, Mary-Jean Moyo, the IFC's in-country manager for Ghana, told me the new hotel fights poverty by creating jobs. To illustrate, she recalled how the Mövenpick's manager "noticed that a few boys roller-skate on Sundays outside the hotel. The manager decided to hire them to work at the pool. That is development and helping local people." How many were hired, I asked. Six, Moyo responded.

When I spoke with Stuart Chase, the Mövenpick's manager, he told me that other kinds of investments besides the new hotel he was clearly proud of would do far more to stimulate Ghana's economy and reduce poverty. Chase, who has lived and worked in Ghana for years, mentioned the country's congested and potholed roads, poor electricity system, limited food supplies, and lack of trade schools. "There is no hotel school and no vocational training in the country," he complained. As a result, all the top staff members among his 300 employees are foreign.

Besides, Accra already has close to a dozen luxury hotels. Before taking over the Mövenpick, Chase managed another nearby five-star hotel owned by Ghana's Social Security and National Insurance Trust, the country's pension system. So when the IFC decided to finance Prince Alwaleed's hotel, it was entering into direct competition with the people it claims it wants to lift out of poverty. Moyo acknowledged to me that the IFC didn't study the local hotel scene before making this investment, unlike its standard practice. "We knew the company and had another successful investment in Kingdom that made the Ghana deal attractive to us," she said. The other investment? A $20 million deal in 2010 to help develop five luxury venues in Kenya, complete with heated swimming pools, golf courses, and organized safaris.

U.S. Sen. Patrick Leahy, a Vermont Democrat who sits on the Senate Appropriations subcommittee that has jurisdiction over U.S. participation in the World Bank, called the Ghana loan "not an appropriate use of public funds" when alerted to it by a 2011 Washington Times article. The U.S. Treasury Department, which administers American participation in the World Bank, defended the loan, telling the newspaper that the IFC package replaced funding expected from private banks that pulled out when market conditions soured, putting the entire $103 million project at risk. When I was in Accra in July, however, at least two other major hotel projects were under construction with private financing obtained in the same period. The prince's representatives didn't respond to requests for comment.

LUXURY HOTELS AND RESORTS are hardly the only IFC investments that offer at best limited prospects for serving its poverty-fighting mandate. Founded just a dozen years after the World Bank itself, the IFC has in recent years become its fastest-growing unit. It now has a staff of some 3,400 people in 103 countries and made $15 billion in loan commitments in 2012 across about 580 projects -- more than double its 2006 total and a figure that's projected to grow to about $20 billion in the next few years.

The original notion was that while the World Bank was lending directly to poor countries, the IFC would stimulate the growth of private business, entrepreneurship, and financial markets in some of those same countries by lending to and investing in for-profit corporations. The founders, notably including a General Foods executive named Robert Garner, emphasized that the IFC would participate only in projects for which "sufficient private capital is not available on reasonable terms."

That concept has become muddied over the years, as well-heeled borrowers with excellent credit have sought to take advantage of the IFC's relatively attractive loan terms and other investment vehicles, plus, in some cases, the cachet associated with World Bank support. The IFC's growth got a boost in the early 1980s when it was permitted for the first time to raise money from the global capital markets by issuing bonds. More recently, its growth has accelerated as it has entered new businesses, including trade finance, derivatives, and private equity, sometimes to the annoyance of private banks with which it competes.

Today, the IFC's booming list of business partners reads like a who's who of giant multinational corporations: Dow Chemical, DuPont, Mitsubishi, Vodafone, and many more. It has funded fast-food chains like Domino's Pizza in South Africa and Kentucky Fried Chicken in Jamaica. It invests in upscale shopping malls in Egypt, Ghana, the former Soviet republics, Eastern Europe, and Central Asia. It backs candy-shop chains in Argentina and Bangladesh; breweries with global beer behemoths like SABMiller and with other breweries in the Czech Republic, Laos, Romania, Russia, and Tanzania; and soft-drink distribution for the likes of Coca-Cola, PepsiCo, and their competitors in Cambodia, Ethiopia, Mali, Russia, South Sudan, Uzbekistan, and more.

The criticism of most such investments -- from a broad array of academics and watchdog groups as well as local organizations in the poor countries themselves -- is that they make little impact on poverty and could just as easily be undertaken without IFC subsidies. In some cases, critics contend, the projects hold back development and exacerbate poverty, not to mention subjecting affected countries to pollution and other ills.

The debate is swirling as the World Bank has a new leader, installed in July: Jim Yong Kim, an American physician who recently stepped down as president of Dartmouth College. The bank declined to make him available to comment for this article, and in his brief tenure so far, he has given little hint of his view of the IFC. In both his statement when he took office in July and on his first overseas visit, to Ghana's neighbor to the west, Ivory Coast, he did note briefly the importance of the IFC within the World Bank Group and of the private sector to global job creation.

The IFC is also in the middle of a change in leadership. Its former head, Lars Thunell, recently completed his term, and Chinese national Jin-Yong Cai, a Goldman Sachs partner who was in charge of the firm's Chinese banking operations, succeeded him in October. At that time, Kaldany, who had been serving as the IFC's acting CEO, stepped back to the post of vice president for global industries.

The IFC's operations have been the subject not only of outside criticism but of significant parts of 2011's stinging internal report and other critiques from within the World Bank. The 2011 document, in which the bank's Independent Evaluation Group examined the IFC's activities over the previous decade, portrayed a profit-oriented, deal-driven organization that often fails to reach the poor, and at times may even sacrifice the poor, in a drive to earn a healthy return on its investments: "Greater effort is needed in translating the strategic intentions into actions in investment operations and advisory services to enhance IFC's poverty focus."

But the IFC's money-generating strategy has at least one benefit: It sustains the jobs of the people who work for it. The "more money the IFC makes, the more the bank has [available] to invest," says Griffiths, the director of Eurodad. "Staff is incentivized to make money."

Francis Kalitsi, a former IFC employee who is now a managing partner at private-equity firm Serengeti Capital in Accra, has a similar view. "To get ahead, you had to book big transactions," he recalls of his time at the IFC. "The IFC is very profit-focused. The IFC does not address poverty, and its investments rarely touch the poor."

The IFC sets annual targets for the number, size, and types of deals employees should complete, and it awards performance bonuses for reaching these targets, according to several current and former IFC staffers. "If you don't reach the target, you don't get a bonus," says Alan Moody, a former IFC manager who now works elsewhere at the World Bank. Deals often come to the IFC from private companies, not the other way around. "We choose our projects by identifying key clients and asking them what their needs are," says the IFC's Moyo. That means, though, that by following private companies' priorities, the IFC makes investments that are not necessarily aligned with countries' own development strategies.

Even if the IFC focused more of its resources on poverty, it doesn't have a good way to track whether its work has any impact. The 2011 report -- which advises that the IFC "needs to think carefully about questions such as who the poor are, where they are located, and how they can be reached" -- criticizes the IFC for lacking metrics for its investments, saying it fails to "[d]efine, monitor, and report poverty outcomes for projects."

The IFC does not contest these criticisms. Its management responded to the evaluation group's report by stating, "We broadly agree with [the] report's lessons and recommendations" and conceded that the "IFC has not been consistent in stating … the anticipated poverty reduction effects of a project." The IFC notes that it several years ago began using a Development Outcome Tracking System (DOTS) to measure the effectiveness of its projects at spurring economic development and alleviating poverty. This system, however, has drawn snickers from a number of IFC clients. They note that the DOTS ratings rely heavily on self-reporting by the recipient companies and depend to some extent on financial data for the entire firm, often with multiple divisions around the world, rather than focusing on the specific area of the IFC-funded project. Still, Kaldany expresses enthusiasm for the effort, saying it is pathbreaking and getting better.

Meanwhile, there has been little evidence of change on the ground. Everywhere I looked -- in Ghana, in nearby West Africa, and globally -- the IFC still seems to be giving its mandate to fight poverty short shrift.

In finance, for example, R. Yofi Grant, executive director of Databank, one of Ghana's largest banks, told me that the IFC's practice of providing loans at attractive terms to multinational companies "crowds out local banks and private-equity firms by taking the juiciest investments and walking away with a healthy return."

Grant says that the IFC recently organized a $115 million financing package for global telecom giant Vodafone to expand its operations in Ghana, even though six telecom companies already operate in the country. Despite such robust private investment, the IFC's loan package for Vodafone was its second in two years. "That is not poverty reduction, and these are not frontier investments," Grant says, referring to the IFC's refrain that it invests where other financiers might not. "The IFC says all the right things and does all the wrong things."

A THOUSAND MILES EAST of Ghana are Cameroon and Chad, which exemplify a major and highly controversial domain of IFC investment, one where the stakes are often higher than with hotels and shopping malls. That domain is energy.

As of the end of 2011, the IFC reported a $2 billion oil-and-gas portfolio, investing with 30 companies in 23 countries and, the IFC boasted, achieving "Award Winning Recognition from the Market." But critics, including environmentalists and nonprofit groups such as the Bretton Woods Project and Christian Aid, contend that the projects often exacerbate the poverty they are supposed to alleviate. The projects, they say, frequently escalate local conflict and corruption, displace communities, disrupt livelihoods, and contribute to the emission of greenhouse gases and other pollutants.

In 2003, an independent review panel within the World Bank even recommended that the bank, including the IFC, pull out of all oil, natural gas, and coal-mining projects by 2008, saying such loans do not benefit the poor who live where the natural resources are found. But the World Bank's board overruled these recommendations. The bank ultimately agreed to an approach that is "business as usual with marginal changes," Emil Salim, the Indonesian official who led the bank's review, told Bloomberg News in 2004. In a conference call with reporters at the time, IFC executive Kaldany said, "There was very broad consensus that we should remain engaged; we do add value."

The example of Chad and Cameroon, however, offers a more complicated picture. In 2000, the IFC invested roughly $200 million with ExxonMobil, Chevron, and others, along with the governments of Chad and Cameroon, to support the construction of a nearly $4 billion oil-pipeline project that experts estimate will generate more than $5 billion in revenue over the 25-year life of the project from wells mainly in landlocked Chad to a port in Cameroon.

The two countries are even poorer than Ghana to the west. Per capita income in Chad ranks 193rd in the world, compared with 185th place for Cameroon and 172nd for Ghana. Life expectancy at birth in Chad, at 48.7 years, is the world's absolute worst, and the country has been ruled for the last two decades by heavy-handed dictator Idriss Déby.

"Conditions were and are a hardship and horrible," says Peter Rosenblum, co-director of the Human Rights Institute at Columbia University, who argued that the pipeline project should demand protections for the civilian population. The bulk of the oil revenue was supposed to be set aside for food, education, health care, and infrastructure. But in the face of attacks from rebel groups supported by neighboring Sudan, and asserting a need to defend the pipeline, Déby instead channeled substantial chunks into arms purchases, bringing criticism not only from human rights groups but from the World Bank. As critics of the project had warned, the oil bonanza increased the stakes for control of the country and added to the civil strife.

What happened with Chad is not an isolated incident. Despite perennial controversies over energy and mining projects, often the subject of fierce disputes related to everything from their environmental impacts to the extent they boost authoritarian regimes, the IFC continues to invest in them extensively. Just in 2012, the IFC announced investments in mining projects for gold, copper, and diamonds in places like Mongolia, Liberia, and South Africa, as well as investments in oil and gas projects in Colombia, Ivory Coast, the Middle East, and North Africa.

Moreover, as with Chad's Déby, the IFC continues to lend and invest in countries with heavy-handed rulers such as Syria (Bashar al-Assad) and Venezuela (Hugo Chávez). Kaldany told me there were about a dozen dictatorships, which he wouldn't name, where the IFC would simply not do business. But then there is a second tier, where he is inclined to work. "It is a tradeoff. We can have a positive influence," he said, referring to a recent IFC deal in now civil war-torn Syria to fund microfinance. He said the IFC is insisting on increasingly tight financial controls in such countries to ensure that the proceeds from the projects are targeted directly to the poor rather than to sustaining the dictators' hold on power. He acknowledged that the controls in the Chad case were not nearly tight enough and that the IFC ultimately had to pull out.

The IFC's critics see two obvious ways to fix it: dramatically overhaul its priorities or sharply reduce its funding and channel those resources toward the type of World Bank projects that more closely align with its anti-poverty mission.

Kaldany said that the IFC is seeking to increase its number of small projects, of under $5 million and tightly targeted on the poor, and to devote more attention to the poorest of the poor countries. In the most recent fiscal year, it generated 105 of the smaller projects, 20 percent of its total deals, although a much smaller percentage of its total dollar outlays. (IFC officials couldn't immediately provide that number.)

But don't count on a new direction. Although its new leadership has remained publicly mum, the IFC's new chief, Cai, has told people he strongly supports its current strategy.

IN ACCRA, NOT FAR from the new Mövenpick, the IFC's posh offices -- sporting a lawn, flowers, and private parking -- sit amid a slum, surrounded by an imposing concrete wall topped by coils of barbed wire. The only paved part of the road to the IFC is directly in front of the guarded complex, which has no sign announcing its identity. The rest of the road is a winding, dusty dirt path filled with potholes and surrounded by hovels erected out of battered metal or wood.

Barefoot children sit amid goats and roving chickens, on ground dotted by garbage and litter. Women cook tiny fish strung onto sticks over an open fire, ignoring the near-100-degree temperatures. I approached them one day in July, and some of them said they had lived there for 15 years. When asked whether they knew what the World Bank is, they said no. When told that it fights poverty, many of them laughed.

"We need help, and we know there are places that help," said one woman who was cooking as two young boys clung to her legs. "But we have never heard of them."

Pam McLean