Wednesday, October 27

IMF board to meet again on Georgieva review Friday -source


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WASHINGTON — The International Monetary Fund’s executive board will meet again on Friday after interviewing Managing Director Kristalina Georgieva over claims that she pressured World Bank staff to alter data to favor China in her previous role, a source familiar with the deliberations said.

A spokesperson for the IMF would only say that the board would come together “soon” to discuss the matter.

“The Executive Board remains committed to a thorough, objective and timely review, and expects to meet again soon for further discussion,” the spokesperson said.

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Georgieva on Wednesday again strongly denied https://www.reuters.com/business/imfs-georgieva-accuses-former-world-bank-president-kims-office-manipulation-2021-09-24 the accusations in an external investigation report https://thedocs.worldbank.org/en/doc/84a922cc9273b7b120d49ad3b9e9d3f9-0090012021/original/DB-Investigation-Findings-and-Report-to-the-Board-of-Executive-Directors-September-15-2021.pdf that she applied “undue pressure” on World Bank staff for changes that boosted China’s ranking in the “Doing Business 2018” report at a time when the bank was seeking Beijing’s support for a major capital increase.

In a detailed statement, a copy of which was seen by Reuters, Georgieva told the board that the law firm that conducted the investigation, WilmerHale, mischaracterized her actions while serving as World Bank chief executive and falsely told her that she was not a subject of its investigation.

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Georgieva rejected WilmerHale’s conclusion that she and other senior World Bank officials pressured staff to alter data to boost China’s standing in the 2018 report on countries’ business climates, or any linkage with the capital increase.

“The idea that after nearly 20 years at the World Bank, I would suddenly start pressuring bank staff inappropriately to change information in a report is outrageous and untrue,” Georgieva told the IMF board. “The bank and the fund live by our data and our analysis. To corrupt these is simply unacceptable.”

The board is racing to complete its review of the allegations against Georgieva ahead of the annual IMF and World Bank meetings, which begin next week, where the global lender will unveil its latest economic projections.

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Georgieva, who has faced some calls for removal from the IMF, told the fund’s board she remained committed “to my core” to fulfilling the vital mission of the IMF.

Thus far, the fund’s most influential member governments, including top shareholder the United States, have withheld public judgment as the review process plays out.

Sources briefed on the board’s deliberations said Georgieva drew support from European, Middle Eastern and African countries, while the United States remained more reserved.

The US Treasury had “pushed for a thorough and fair accounting of all the facts” in the ongoing review, said spokeswoman Alexandra LaManna. “Our primary responsibility is to uphold the integrity of international financial institutions.”

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No comment was immediately available from WilmerHale.

The World Bank data-rigging scandal has dented the research reputations of both institutions, https://www.reuters.com/business/world-bank-imf-face-long-term-damage-after-data-rigging-scandal- 2021-10-04 raising critical questions over whether that work is subject to shareholder influence, former staff, government officials and outside experts say.

On Monday, IMF board members spent five hours questioning lawyers from the WilmerHale firm about their investigation report https://thedocs.worldbank.org/en/doc/84a922cc9273b7b120d49ad3b9e9d3f9-0090012021/original/DB-Investigation-Findings-and-Report-to -the-Board-of-Executive-Directors-September-15-2021.pdf and how it was conducted.

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One European source said officials have raised concerns that the release of the firm’s findings with very little notice to Georgieva and others was troubling, as were comments from Shanta Devarajan, the former World Bank official in charge of the Doing Business 2018 report, who said he was never pressured https://twitter.com/Shanta_WB/status/1441093124638449675 by Georgieva to alter the report.

Georgieva also took issue with WilmerHale’s handling of the probe, saying that some of her comments were taken out of context, she was falsely assured that her testimony was confidential, and she was never given a chance to review her testimony for accuracy. (Reporting by Andrea Shalal and David Lawder; Editing by Hugh Lawson, Diane Craft and Leslie Adler)

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