Latin American development bank loses chief after ethics probe

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MIAMI — Governors of the Inter-American Development Bank have voted to fire its president, Mauricio Claver-Carone, after an ethics investigation found he likely had an intimate relationship with a subordinate.

The governors of the 48-member JID had until Tuesday to vote electronically on whether to sack Claver-Carone following a unanimous recommendation last week by the bank’s board. to the fire of the first American to lead the bank in its 63 year history.

But enough ballots had been cast by Monday afternoon to achieve the necessary quorum. The IDB said in a statement that, in accordance with the bank’s charter, Executive Vice President Reina Mejia would take over as interim president until a new leader is chosen.

An investigation at the request of the council determined that Claver-Carone violated ethics rules by giving a 40% salary increase to his chief of staff, with whom he said he had probably been romantically involved. since at least 2019, when both worked at the White House. , according to a copy of the report obtained by the AP.

Claver-Carone denied ever having a relationship with his top aide and said the investigation, led by New York law firm Davis Polk, was seriously defective.

In an interview Monday, Claver-Carone said he was considering legal action against the international financial institution for allegedly defaming his reputation and violating the terms of his employment contract. He also criticized the Biden administration for failing to uphold the due process rights of one of its citizens.

“The Bank has failed to meet the rating as a rules-based institution,” he wrote in a farewell letter to governors, complaining that he was never officially informed of the anonymous complaint that triggered the investigation or corrected the inaccuracies of the investigators. ‘confidential report. “The future of the Bank hangs in the balance. Going forward, it will be essential to ensure that ad hoc and arbitrary disregard for rules and procedures never happens again.

The bank’s board lost faith in Claver-Carone’s leadership following evidence, including a “contract” he and his assistant allegedly wrote on the back of a placemat in the summer of 2019. that they were dining at a steakhouse in Medellin, Colombia. Both were attending the annual meeting of the Organization of American States.

In it, they reportedly outlined a timeline for divorcing their spouses and getting married. There is also a ‘break clause’ stating that failure to comply with the terms will result in ‘sadness and grief’ which could only be alleviated by ‘candle wax and a naughty box’ from a hotel on the edge. of sea in Miami, the birthplace of Claver-Carone.

While investigators found no evidence that Claver-Carone violated the bank’s travel policies to cover up the alleged romance, he blamed her for not fully cooperating with their investigation by refusing to hand over her work phone and providing access to communications from their personal phone and e-mail. . He also said he likely violated the bank’s conflict of interest policy, which prohibits managers from making employment decisions on behalf of people with whom they have an intimate relationship, when he unilaterally gave his assistant a 40% raise.

The findings echo accusations of ethical lapses against another Republican at the top of a multilateral institution, former Defense Secretary Paul Wolfowitz, who resigned as head of the World Bank in 2007 over arrange a generous pay rise for his girlfriend.

The Inter-American Development Bank is the largest multilateral lender in Latin America, disbursing a record $23 billion last year to alleviate poverty worsened by the coronavirus pandemic in the region. The United States is the main shareholder, with 30% of the votes.

Claver-Carone was elected president in the final months of the Trump administration despite grumbling from Democrats and some others in the region. During his time at the bank, he has worked to reduce the influence of China, which joined the bank in 2009, and to strengthen engagement with Taiwan, which Beijing considers a breakaway province.

Under bank rules, executive vice president Reina Mejia, a Honduran national who has spent most of her career at Citibank in Central America, will succeed Claver-Carone until a new president is elected.

Follow Goodman on Twitter: @APJoshGoodman

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