Smearing a Latin Bank Reformer

Defending the dignity of women in the workplace and fighting educated elites are top priorities of the Biden administration. Or so it says. Now, an unsubstantiated – and perhaps politically motivated – allegation against a female Inter-American Development Bank employee in Washington and her boss has brought the President of the United States and his team he took the opportunity to go for a walk.

At issue was an anonymous email dated March 29 sent to members of the bank’s “organizational, personnel and board issues”. I have seen emails alleging, without evidence, that IDB President Mauricio Claver-Carone had a “romantic and inappropriate relationship with one of his subordinates” and implied that he abused travel accounts and expenses to disguise it.

Reuters reported on the allegations on April 7, and Mr. Claver-Carone told me by phone on April 18 that he categorically denies them. In a speech marking the launch of IDB’s latest macroeconomic report on April 8, he said he was looking forward to the opportunity to respond to his accuser with “direct evidence of truth”.

The letter also alludes to the character and competence of the subordinate, who holds a senior position at the bank and appears to be a good professional but whose power in the organization is damaged by the alleged leak.

Both sides deserve due process, but without US intervention, they might not get it. Ethical violations in banking are serious. However, the same goes for the use of anonymous sources for media coverage.

Reuters said it had not yet seen the email. But it cited unnamed sources as saying bank executives had met with lawyers to talk about its contents. A few days later, “the directors met again. . . to draft a resolution to hire an outside firm to investigate the allegations, the bank source said,” according to Reuters.

On Friday, an IDB communications spokesman declined to say whether after five weeks the bank would show Claver-Carone emails or notify him of an investigation. The spokesperson pointed out to me bank regulations that forbid Mr. Claver-Carone and his subordinates from discussing the matter publicly. For this reason, an IDB spokesperson told me, subordinates must decline my request for comment.

We don’t know what the public will learn once the matter is brought up fairly. But the way in which the allusion was brought to light raises questions about good luck from damage to the reputation of two bank employees.

Claver-Carone’s nomination in 2020 to head the bank has been controversial, and not least because he is the first American ever to be nominated for the position. As a candidate, he pledged to make the bank more representative of the region by bringing the smaller Central American, Caribbean and South American countries into the hierarchy. He also promised to increase transparency, accountability and efficiency of the bank.

Argentina doesn’t like its prospects. As the Journal’s editorial board noted at the time, the country “held a third of the top banking jobs assigned to borrower countries despite [had] only 11.4% bank ownership rate”. Buenos Aires led a failed attempt to beat the nomination.

Mr. Claver-Carone is a bad guy. He kept his promise to rebalance the leadership role. Of the four vice-presidential positions, one is currently held by Ecuador and the other by Paraguay. Reina Irene Mejía, the bank’s executive vice president, is from Honduras. According to the bank, women hold nearly half of all national representation positions in the region, up from 10% when Mr. Claver-Carone joined the board.

In his April 8 speech, the president noted that by 2021, the bank had saved $10 million by eliminating redundancies and frivolous spending. “This is no longer an organization that uses private jets and chauffeured cars, and I am proud of that,” he said.

There has also been a shift in Chinese policy. Between 2010-20, Beijing — with a less than 0.004% stake in the bank — was awarded $1.7 billion in contracts. That makes it the fourth largest recipient of banking transactions, after Brazil, Argentina and Peru. Now, the focus on tapping private capital from the US and Europe is reducing dependence on China. This is combined with the modernization of IDB Invest, the bank’s own financial arm that works with investors.

Former Citibank Chairman William Rhodes called Mr Claver-Carone “the right person, in the right place, at the right time, doing a great job at IDB” and praised his work with private funding. Ricardo Zúñiga, the State Department’s special envoy for the northern triangle of Central America, welcomed the IDB’s focus on marginal operations and noted Mr. Claver-Carone’s “strong cooperation with the administration” “.

IDB members can remove a chairman at will. But serve him until a lynch mob – and treat his subordinates as collateral damage – without a hearing, to save an old boys’ club of privilege, rife with racism. family and corruption. Paging Janet Yellen.

Write to O’Grady@wsj.com.

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https://www.wsj.com/articles/smearing-latin-bank-reformer-idb-mauricio-claver-carone-america-misconduct-sexual-deny-reuters-11652036455 Smearing a Latin Bank Reformer

Alley Einstein

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