In a letter to Paul Wolfowitz, the President of the World Bank, Sir Edward accused the organisation of “toadying to a thoroughly corrupt administration” and said that last week’s loan made a mockery of efforts to stamp out high-level looting.

The loan — which included $25 million to fight graft — was made only days after the leak of a report by Kenya’s former anti-corruption czar, John Githongo, that implicated three Cabinet ministers, including the Vice-President, in scams worth hundreds of millions of pounds. It also alleged that Mr Kibaki knew of the fraud.

Although the Kenya Anti-Corruption Commission has summoned the three ministers to appear before it next month, Mr Kibaki has taken no action.

“Surely even the bank’s apolitical apparatchiks can see that what is now emerging is the most complete dissection of grand corruption yet to appear in Kenya,” Sir Edward wrote.

“And surely they can appreciate that funds disbursed at such a time cannot fail to appear as a mockery of the brave men and women who are taking risks to ensure that the scourge of corruption is banished from their country.”

Sir Edward, who famously accused the Kenyan authorities of “vomiting on the shoes” of international donors while he was High Commissioner in Nairobi, called the decision “blind and offensive blundering”. He said that Mr Wolfowitz, a leading neoconservative who served as Deputy Secretary of Defence to President Bush before his controversial World Bank appointment last year, bore personal responsibility.

Referring to Mr Wolfowitz’s pledge to crack down on corruption, he wrote: “You, as president . . . should not countenance the offensive contradiction between your own words on corruption and your officials’ toadying to a thoroughly corrupt administration.”

Before he returned to Britain last July, Sir Edward delivered a dossier of 20 suspect state tenders to Mr Kibaki. Most were “national security” contracts awarded to fictitious financing companies. Many of the deals he listed also appear in the Githongo report, including the Anglo Leasing scam, where a bogus company was awarded a passport and forensic laboratory contract worth £50 million.

The corruption charges in the Githongo report have split the Cabinet, with several ministers refusing calls to present a united face. Opposition leaders have demanded the resignation of implicated ministers. Mr Kibaki, who was elected on an anti-corruption ticket in 2002, has also faced calls to step down.

Sir Edward said that ordinary Kenyans, who were deeply angered by the corruption revelations, would have been confused by the World Bank’s message. “The bank is like the caricature of the Church in 18th-century France: a contemporary cartoon just before the Revolution showed the peasants staggering under the burdens of the world. The monarchy and aristocracy imposed most of those burdens. The Church is seen, in all its finery and privileges, standing by, leaning on the globe, adding to, not subtracting from, the sufferings of the peasantry.”

WOLFOWITZ CALLED TO ACCOUNT

“If the bank wishes to eschew interference in politics, it must avoid blind and offensive blundering of the sort demonstrated today in respect of one of Africa’s more corrupt development partners”

“The board which approved this presumably included lots of distinguished representatives of many countries, including my own, whose moral sensibilities and political judgment appear to have been asleep. I do not believe, however, that you (Wolfowitz) can avoid criticism”

“The decision is a particularly glaring example of how the bank and donors collectively fail to grasp the nettle of corruption; and their instinct, when they do address it, to get things quite wrong”

“Alas, the bank . . . repeated its past errors by blundering ahead with disbursements to Kenya without heed of the political background”

“And you (Wolfowitz), as president . . . should not countenance the offensive contradiction between your own words on corruption and your officials’ toadying to a thoroughly corrupt administration”

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