German design firm Lahmeyer International, Bad Vilbel, in late February became the first firm blacklisted for bribery by the European Bank for Reconstruction and Development. The move follows the World Bank’s ban of the firm last November that was set to last up to four months. The actions relate to Lahmeyer’s involvement in corrupt activities in the Lesotho Highlands Water Project a decade ago. The firm is now ineligible for EBRD contracts until it improves its three-year-old anti-corruption program, says a bank spokesman.

Highlands Water Project entangled German and Canadian consulting firms in kickback scheme.

EBRD was not involved in the Lesotho job, but it was dissatisfied with Lahmeyer's anti-corruption program, says a bank spokesman. “We are all working together,” he says. “We will work with them to make it better.”

Lahmeyer will implement bank suggestions “without delay,” in order to be removed from the blacklist "during the second term of 2007," says Managing Director Henning Nothdurft. The ban “disturbed many of our [other] clients,” he adds. The firm claims to have won back their trust “by open discussions and explanations,” says Nothdurft, noting that EBRD accounts for about 2% of Lahmeyer sales, while the World Bank had contributed 5-8%.

A spokeswoman for Lahmeyer’s new owner, private equity firm Advent International, Boston, played down the earlier ban, saying it accounted for little business. Advent bought Lahmeyer last October from German water giant RWE Group in a package of five firms. It plans to review operations and sell the firms individually, she adds. Advent retains investments from three to seven years. No Lahmeyer managers that were linked to bribes between 1991 and 1997 of Masufa Sole, the now-imprisoned Lesotho Highlands Development Authority ex-CEO, are still employed at the firm, says Nothdurft. In 2004, the World Bank barred Canadian engineer Acres International Ltd. for participating in bank-sponsored projects for three years for bribing Sole.