The directors are civil servants seconded by governments which fund the bank but who are paid by the bank and enjoy the same tax advantages as staff. They monitor bank finances but are, in effect, part of it.
Yesterday it was disclosed that the bank, set up to help former Communist eastern European countries with low standards of living to switch to free market economies, had spent twice as much on overheads as it had handed out in loans.
EBRD spent pounds 55.5m fitting out its offices in London having already paid pounds 18m to refurbish previous premises. The British government provided pounds 40m.
The entrance to the bank's headquarters in the City of London is a monument to the grandiose ideas of Jacques Attali, its founding president. Lifts are framed by slabs of Carrara marble which, at an estimated cost of pounds 750,000, replaced the Travertine marble originally installed.
Below a mirrored ceiling are security barriers activated by remote control. An auditorium on the first floor on the building in Exchange Square, Broadgate, will have cost about pounds 1m when finished and the bank has spent about pounds 250,000 on works of art.
The bank, set up in April 1991, also spent pounds 600,000 on hiring aircraft for Mr Attali last year - 8 per cent of the travel budget. A further 15 to 18 such trips, each costing about pounds 22,000, are in this year's budget.
Last Christmas more than 600 staff, directors and consultants attended a party at the Grosvenor House Hotel, London, which cost pounds 52,000 - enough to launch a project in eastern Europe.
Compared with pounds 201.5m spent on office fittings, staff pay, travel and administrative overheads by the end of 1992, the EBRD gave out a total of pounds 101m in loans and investments to eastern Europe.
Last night the bank did not dispute those figures but said that it 'is proud of its record in central and eastern Europe and the former Soviet Union which it has achieved in difficult circumstances'. Its statement added: 'The bank is very cautious in the use of its shareholders' money and is subject to auditing procedures as well as the control of governing bodies.'
Critics pointed out that the 23 governors, including the British representative, Robert Graham Harrison, are civil servants on secondment from the European countries owning the bank. They are paid by the EBRD, get salaries higher than their civil service pay and, in common with bank staff, do not pay British taxes.
Michael Irwin, former director of the World Bank's health services department, said: 'What we need here is an independent form of control by people who are not being paid by the bank.'
Dr Irwin caused controversy three years ago when he exposed 'bloated, overpaid bureaucracy' and 'wasteful practices' at the World Bank, which has a similar board of directors.
Gordon Brown, Labour's shadow Chancellor, is going to table a parliamentary question to try to find out how the money has been spent.
Leading article, page 19
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