The stage is set for a possible showdown involving the Nigel Clarke-chaired board of governors of the Inter-American Development Bank and IDB President Mauricio Claver-Carone over an investigation into allegations of impropriety against him.
In April this year, on the heels of the multilateral financial institution’s March annual meeting at which Jamaica’s Finance Minister, Dr Nigel Clarke, was elected chairman of the bank’s highest decision-making body, international news agency Reuters broke news that the bank would be investigating the president over allegations said to have stemmed from an anonymous letter to the bank.
Staffers at the Washington, DC-based institution have confirmed to the Financial Gleaner, the bank’s receipt of the letter and the commissioning of the investigation by the 14-member board of directors, whose authority in the organisation’s corporate structure is a rung below that of the governors.
The bank’s website details that the board of executive directors, drawn from the IDB’s 48 member countries, is responsible for the operations of the bank and may exercise powers delegated by the board of governors. The executive board operates through standing committees, including an Organization, Human Resources and Board Matters Committee that has met about seven times since April this year, with its latest meeting having been on Monday this week. The IDB conducted a major review of the ethics, conduct and grievance systems in 2011.
Reuters reported this week that the matter, which it said had been investigated by a third party, legal firm Davis Polk, which was called in by the IDB board of directors, is set to be voted on as soon as this week by the 14-member board of executive directors, and the then Clarke-led board of governors of 48 members. Each member country appoints a governor – usually a finance minister or central bank president – whose voting power is proportional to the amount of capital in the bank subscribed by that country. On that basis, the United States, Argentina and Brazil together are said to hold nearly 53 per cent of the voting power.
Termination of the five-year tenure of the president is said by Reuters to be among the issues to be determined. Its reports, based on sources, have also alleged non-cooperation with the investigation by Claver-Carone.
The bank has maintained an official stance of “no comment” on the matter since it emerged, with its spokesperson in Kingston telling the Financial Gleaner that no official comment or updates would be forthcoming on the issue. Clarke has also not responded to repeated Financial Gleaner requests for a comment on how the process is expected to unfold.
However, Claver-Carone has come out swinging from the outset, declaring during on online event in April that the allegations were part of a media campaign that, he alleged, involved the “weaponising of an anonymous letter”.
“An anonymous media campaign, led by a letter which, coincidentally, began the day after our successful annual meeting, where governors approved historic reforms and a pathway for capital increase for IDB Invest,” Claver-Carone said during comments at the April 8 launch of the IDB’s Latin America and the Caribbean 2022 Macroeconomic Report.
He was critical of the process for the handling of the matter within the IDB.
“How can we advocate rule of law and transparency when over the past two weeks, staff of this bank, your colleagues, have been denied due process by a select few, who in turn have unaccountably, allegedly, violated the code of ethics by weaponising an anonymous letter to all the states as part of the campaign. The IDB has mechanisms in place for dealing with matters of ethics which I fully support and welcome, but none of those processes include proactively pitching stories to journalists to influence public opinion or to prejudge the facts,” the IDB president said at the time.
“I am going to respect what should be a confidential process, according to the rules of the bank; and the potential for an alleged investigation, according to sources talking to the press yet again, in violation of bank rules, has apparently been confirmed. I have not been informed. Nonetheless, I do hope that I am given the opportunity to officially present my case and information, so that we can lead by example,” he added.
This week, in a statement issued by the IDB communication office, Claver-Carone took another swipe at the IDB processes.
“The handling of the investigation has repeatedly violated the ethics rules of the bank, basic norms, and raised seriously questionable practices, including manipulating, distorting, and knowingly using information proven to be unreliable to predetermine an outcome, instead of presenting a fair and unbiased review,” the bank’s president charged in the statement that was posted to the IDB’s official website and issued to the media.
“The investigative process failed to meet international standards of integrity that both the IDB and the region strive to exemplify. In clear and direct contravention of IDB ethics rules, neither I nor any other IDB staff member has been given an opportunity to review the final investigative report, respond to its conclusions, or correct inaccuracies,” he alleged.
“I would welcome the opportunity to officially respond to the investigation’s findings, in accordance with bank rules and international standards, to finally be able to discuss the matter with the board of governors,” Claver-Carone said.
“As the elected president of the Inter-American Development Bank, I supported and participated in this unprecedented investigation, which, as expected, does not substantiate the false and anonymous allegations that were made against me or IDB staff in the press. It is the first time in the history of any multilateral development bank that a process like this takes place, where an elected leader has been subject to an arbitrary investigation without any formal complaint within the administrative rules of the organisation, and launched on the basis of anonymous and unsubstantiated allegations. Despite the absence of due process, I fully cooperated without relinquishing my constitutional rights,” he said.
The first American president in the bank’s 63-year history, Claver-Carone, a Miami-based Cuban American, was elected in September 2020, amid controversy, to head the IDB, fresh from several high-profile positions in the administration of former United States President Donald Trump. He was the nominee of the Trump administration, and his candidacy was viewed in some circles as a betrayal of the unwritten convention of the IDB head being chosen from Latin America.
huntley.medley@gleanerjm.com