August 30, 2023

The Honorable Janet Yellen Dr. Adriana Kugler

Secretary United States Executive Director
Department of the Treasury World Bank Group
1500 Pennsylvania Avenue, NW 1818 H Street, NW
Washington, D.C. 20220 Washington, D.C. 20433

Dear Secretary Yellen,

We write to raise concerns about the People’s Republic of China’s (PRC) influence at the
World Bank and the disproportionate share of World Bank contracts awarded to PRC companies,
including those tied to human rights abuses and sanctioned by the United States. We urge you to
press the World Bank to reform its procurement practices to allow for a more level playing field
and help ensure that U.S. taxpayers are not financing projects that undermine U.S. national
interests.

The United States is the largest contributor to the World Bank, accounting for 16.6
percent of funding to the International Bank for Reconstruction and Development (IBRD)
through annual payments of billions of taxpayer dollars. By custom, the president of the World
Bank is always nominated by the United States. The U.S. holds the largest voting shares in both
the IBRD (15.7 percent) and the International Development Association (IDA) (9.7 percent). The
PRC only provides a fraction of this funding by comparison.

Yet a recent Government Accountability Office (GAO) report shows that the PRC has
benefited disproportionately from the Bank. The report states that PRC companies have been
awarded nearly 30 percent of all World Bank contract dollars in the past decade, totaling $21
billion, to execute projects funded by World Bank loans.1 By contrast, U.S. companies have only
received 2.4 percent of this funding. Chinese companies dominate civil works and goods
projects, which account for the vast majority of World Bank contract dollars.2 The World Bank
bidding process appears so stacked against American companies that they have largely given up
on bidding for most World Bank projects, with U.S. companies only bidding on 1.2 percent of
contracts.3

The GAO report further raises concerns about World Bank contracts funding PRC entities
that undermine U.S. national security and engage in gross human rights abuses. The report

1 United States Government Accountability Office, World Bank Borrower Countries’ Contracts to Businesses in the U.S. and to Entities
Potentially on U.S. Sanctions or Lists of Other Concern (GAO: Report to Congressional Requesters, May 2023), Highlights Page.
2
United States Government Accountability Office, World Bank Borrower Countries’ Contracts to Businesses in the U.S. and to Entities
Potentially on U.S. Sanctions or Lists of Other Concern (GAO: Report to Congressional Requesters, May 2023), 9.
3
United States Government Accountability Office, World Bank Borrower Countries’ Contracts to Businesses in the U.S. and to Entities
Potentially on U.S. Sanctions or Lists of Other Concern (GAO: Report to Congressional Requesters, May 2023), 23.
identifies at least $75 million in World Bank contracts issued to a dozen PRC companies
sanctioned or otherwise blacklisted by the United States.4 World Bank contracts awarded in the
past few years have fueled the expansion of Huawei in East Africa and, had the U.S. not
intervened, would have paid Huawei Marine to build a submarine cable to connect to sensitive
U.S. government defense communications on Guam.56 The Bank even awarded a multi-million
contract to a subsidiary of Xinjiang Production and Construction Corps (XPCC), a Chinese
Communist Party (CCP) paramilitary group involved in the genocide against the Uyghur
people.7,8

The contract money won by PRC entities comes in addition to the billions of dollars in
World Bank loans that China receives every year, despite its status as the world’s second-largest
economy. Most absurdly, China receives these billions in loans even though every year since
2016 it has exceeded the threshold at which it should graduate from World Bank loans.9

Unfortunately, instead of tightening oversight of PRC-related World Bank operations and

forcing overdue reform, the new World Bank leadership appears to be moving in the opposite
direction. World Bank President Ajay Banga recently announced a major partnership with the
Asian Infrastructure Investment Bank (AIIB), which the PRC established as its rival to the World
Bank. This deal offers undue legitimacy to the AIIB and comes just weeks after a leading AIIB
official resigned in protest and accused the AIIB of being run by the CCP “like an internal secret
police.”10

Given that the World Bank is reportedly looking for a capital increase this year, it is
critical that the Treasury Department and the U.S. Executive Director at the World Bank demand
reforms at the Bank before Congress can be comfortable providing additional taxpayer money to
an institution that has engaged in activity so hostile to U.S. national interests.11

With these concerns in mind, we request that you respond to the following no later than
September 13:

1) Do you believe that China receiving 30 percent of World Bank contract funding for over
a decade indicates that the World Bank’s procurement process is fair and transparent?
a. Do you believe that China’s disproportionate share of World Bank contract
funding suggests that the World Bank must reform its procurement process?

4
$75 million figure assembled from: United States Government Accountability Office, World Bank Borrower Countries’ Contracts to Businesses
in the U.S. and to Entities Potentially on U.S. Sanctions or Lists of Other Concern (GAO: Report to Congressional Requesters, May 2023),
44-55.
5
United States Government Accountability Office, World Bank Borrower Countries’ Contracts to Businesses in the U.S. and to Entities
Potentially on U.S. Sanctions or Lists of Other Concern (GAO: Report to Congressional Requesters, May 2023), 50.
6
Jonathan Barrett; Yew Lun Tian, Exclusive-Pacific Undersea Cable Project Sinks After U.S. Warns Against Chinese Participation (Reuters,
June 17, 2021).
7
United States Government Accountability Office, World Bank Borrower Countries’ Contracts to Businesses in the U.S. and to Entities
Potentially on U.S. Sanctions or Lists of Other Concern (GAO: Report to Congressional Requesters, May 2023), 47, 53.
8
U.S. Department of the Treasury, Treasury Sanctions Chinese Entity and Officials Pursuant to Global Magnitsky Human Rights Executive
Order (Press Releases, July 31, 2020).
9
Organization for Economic Co-operation and Development, IBRD Graduation, Transition Finance Toolkit (International Bank for
Reconstruction and Development, July 2021).
10
Joe Leahy; Alec Russell, China-backed AIIB Secures World Bank Deal (Financial Times, July 2021).
11
Shalanda Young, “Letter regarding critical funding needs for FY2024,” Executive Office of the President, Office of Management and Budget
(OMB: Letter to Kevin McCarthy, Speaker of the House of Representatives, August 10, 2023), 35.

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 2) There have been past reform attempts to require World Bank contracts to not be awarded
based solely on the lowest-cost bid.
a. Have you or the U.S. Executive Director seen any compelling evidence that
World Bank procurement contracts are primarily awarded on factors beyond the
lowest-cost bid?
b. Given China’s disproportionate share of World Bank contract funding, do you
believe that these past reforms have succeeded?

3) According to GAO, the World Bank does not require borrowers to report on awards to
subcontractors, and the World Bank allows borrower nations to submit their own data on
their projects without independent World Bank confirmation that the data is accurate.12
a. Will you and the U.S. Executive Director commit to demanding that the World
Bank require its borrowers to report subcontractors on World Bank-funded
projects?
b. Will you and the U.S. Executive Director commit to demanding that the World
Bank oversee, investigate, and if necessary correct faulty data relating to World
Bank-funded projects and notify other countries if a country has engaged in
deceptive practices concerning its World Bank funding?

4) What actions have the Treasury Department or the U.S. Executive Director taken since
2021 to pressure the World Bank to reform its contract procurement process?
a. What concrete actions has the World Bank taken since 2021 in response to U.S.
requests, or on its own accord, that you believe have improved the transparency
and fairness of its contract process?
b. What concrete actions have the Treasury Department or the U.S. Executive
Director taken to improve the competitiveness of U.S. companies in the World
Bank contract-bidding process?

5) Does the Treasury Department’s Office of Foreign Assets Control (OFAC) communicate
with the World Bank when an entity on one of OFAC’s sanctions lists is being considered
for or has been awarded a World Bank-funded contract?
a. Has OFAC had any past communication with the World Bank about the presence
of one of its contract bidders on an OFAC blacklist?
b. Has the World Bank ever acknowledged to the Department of the Treasury or
other relevant U.S. government entities that it was willfully financing an entity or
person designated by the U.S. government as a Foreign Terrorist Organization or a
Specially Designated Global Terrorist organization?
c. Has the World Bank ever acknowledged to the Department of the Treasury or
other relevant U.S. government entities that it was willfully financing an entity on
the Specially Designated Nationals (SDN) List or the Non-SDN Chinese Military-
Industrial Complex Companies (NS-CMIC) List?

12
United States Government Accountability Office, World Bank Borrower Countries’ Contracts to Businesses in the U.S. and to Entities
Potentially on U.S. Sanctions or Lists of Other Concern (GAO: Report to Congressional Requesters, May 2023), 7.

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 6) Have the Treasury Department or the U.S. Executive Director ever threatened
countermeasures against the World Bank for the Bank directly or indirectly funding an
entity in violation of U.S. sanctions?

7) Do you believe that the World Bank’s recently approved deal with the AIIB advances
U.S. national security interests? If yes, why?
a. If not, will you commit to opposing this deal?

8) Please provide examples since January 2021 of the U.S. Executive Director using the
voice and vote of the United States to reform the World Bank procurement process.

9) Please provide examples since January 2021 of the U.S. Executive Director using the
voice and vote of the United States to push for the PRC to no longer receive, or to receive
increasingly fewer, World Bank loans.
a. What actions has the Treasury Department taken to pressure the World Bank to
move the PRC towards graduation from World Bank loans?

Thank you for your prompt attention to this matter. We look forward to your response.

Sincerely,

____________________ ____________________
Jim Banks Mike Gallagher
Member of Congress Member of Congress

____________________ ____________________
Neal P. Dunn, M.D. Rob Wittman
Member of Congress Member of Congress

____________________ ____________________
John Moolenaar Michelle Steel
Member of Congress Member of Congress

____________________ ____________________
Darin LaHood Dan Newhouse
Member of Congress Member of Congress

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____________________
Ashley Hinson
Member of Congress