US Senators call for ‘full accountability’ in World Bank data controversy

Kristalina Georgieva, Managing Director, International Monetary Fund (IMF), during a press conference regarding the World Economic Outlook Update, prior the 50th annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, 19 January 2020. [EPA-EFE/GIAN EHRENZELLER]

The top Democrat and Republican on the US Senate Foreign Relations Committee have urged President Joe Biden to “ensure full accountability” over a World Bank data-rigging controversy that has embroiled International Monetary Fund chief Kristalina Georgieva.

The panel’s chairman, Senator Robert Menendez, a Democrat, and Republican Senator James Risch, said in a letter released on Monday that Biden should direct the US Treasury Department to “do their due diligence with all due haste and, as necessary, ensure full accountability.”

Georgieva, who has been the IMF’s managing director since April 2019, is pushing back against allegations in a World Bank outside investigation report that when she was the bank’s CEO in 2017, she applied “undue pressure” on staff to make data changes that boosted China’s rankings in the World Bank’s flagship “Doing Business” report on country investment climates.

Georgieva pressured World Bank employees to favor China in report

World Bank leaders, including then-Chief Executive Kristalina Georgieva, applied “undue pressure” on staff to boost China’s ranking in the bank’s “Doing Business 2018” report, according to an independent investigation released Thursday (16 September).

On Friday, Georgieva called the allegations against her “false and spurious” and accused the office of the World Bank’s past president, Jim Yong Kim, of manipulating the data.

European Commission Executive Vice President Valdis Dombrovskis met with Georgieva on Monday (27 September) in Washington and issued a supportive tweet, saying: “Always good to see IMF’s @KGeorgieva,” and that the IMF has shown “real leadership” in a distribution of monetary reserves to member countries.

Bulgaria’s Georgieva was a Vice President of the European Commission. She was also a candidate for UN Secretary General.

Bulgaria’s Borissov explains how Georgieva got IMF top job

The Capitals brings you the latest news from across Europe, through on-the-ground reporting by EURACTIV’s media network. You can subscribe to the newsletter here.

Thus far, the US Treasury Department — which controls the dominant US shareholdings in both organizations — has said little about the matter beyond that it is studying the allegations against Georgieva.

Treasury spokeswoman Alexandra LaManna declined to comment on a Bloomberg report that Treasury Secretary Janet Yellen has declined to take calls from Georgieva since the controversy broke 10 days ago. A personal spokesperson for Georgieva declined comment on the report.

“As we have made clear, Treasury believes the report’s findings are serious and have warranted a full review by the IMF of the managing director’s role in the Doing Business Report,” LaManna said, echoing a statement made shortly after the scandal broke. “Our primary responsibility is to uphold the integrity of the international financial institutions.”

More prominent economists and women leaders came to Georgieva’s defense with published opinion pieces and tweets, including Jeffrey Sachs of Columbia University, who wrote in the Financial Times that the allegation against Georgieva is “venial on its face” and that to oust her would be “a dangerous and costly capitulation to anti-Beijing hysteria.”

“Unimpeachable’ data

But Menendez and Risch called the allegations “deeply disturbing” and that IMF and World Bank data must be seen as “unimpeachable,” but they did not call for Georgieva to step down.

“At face value, the seriousness of the allegations that Ms. Georgieva would risk the integrity of both the data and the Bank to cater to the Chinese Government is hard to overstate,” the Senators wrote in the letter dated 22 September.

“The impact these allegations could have on the strength and reputation of our international financial institutions and the Bretton Woods system are still unknown – but surely they will not be good.”

In the context of her bid for the UN top job, Georgieva has been investigated by Christopher Steele, the former MI6 spy and author of the ‘Golden shower’ dossier on President-elect Donald Trump, on alleged links with the Bulgarian shady Multigroup, a post-Communist business empire led by Iliya Pavlov, who was assassinated in Sofia in 2003.

British spy behind Trump’s ‘kompromat’ also investigated EU's Georgieva

EXCLUSIVE / Christopher Steele, a former Russia operations officer for Britain’s MI6 intelligence agency who is purported to be the author of a dossier of allegations against US President-elect Donald Trump, has also investigated former Bulgarian Commissioner Kristalina Georgieva, EURACTIV.com can reveal.

(Edited by Georgi Gotev)

Subscribe to our newsletters

Subscribe