•Press Release Globalization and Trade International Monetary Fund
World Bank president’s attack on the head of IMF appears politically motivated and violates due process.
Washington, DC — Mark Weisbrot, Co-Director of the Center of Economic and Policy Research, called today for a US congressional investigation into the attempt to remove IMF Managing Director Kristalina Georgieva from office.
“It’s clear that the law firm [WilmerHale] hired to do this investigation targeted Georgieva and misrepresented what it was doing,” Weisbrot said. “They even stated in writing that she was not a subject of the investigation.”
Also, as Georgieva points out, she was “never afforded an opportunity to review the notes taken during my interview for accuracy and to offer clarification…” Nor was she allowed to “read and respond to references that directly relate to [her] actions in the Report before it was made final and publicly released.”
Weisbrot said: “The public release of the report in this manner, after assurances to Georgieva that her testimony was confidential, is very strong evidence of animus on the part of the World Bank president, who was in charge of this operation. It would be good if he, and others involved, could answer some questions about their role in these apparent violations of due process and ethics rules.”
Weisbrot noted there were other irregularities in the conduct of the investigation. Previous investigations of the World Bank’s “Doing Business” report (in 2013, 2019, and 2021) involved people who were experts in the subject matter, particularly economics and data questions. Yet this investigation was done by a law firm with no such expertise.
“The WilmerHale report relies heavily on innuendo and alleged links, without evidence, between events or circumstances,” Weisbrot noted. For example, the report tries to make a case that Bank management was trying to give China a more favorable ranking in the Doing Business report in exchange for its support for a capital increase for member countries. But China had always supported the capital increase.
Weisbrot also suggested that David Malpass, who has been president of the World Bank before, during, and since the WilmerHale investigation, may have political reasons to get rid of Georgieva. He is a Trump appointee, and was an advisor to Trump during the 2016 election campaign. His views on monetary policy are quite extreme; he has supported a return to the gold standard, a view that hardly any economists would take seriously.
The Trump administration vetoed a proposed large issuance of Special Drawing Rights when it was put forth by Georgieva in March 2020, and supported by almost all other countries in the IMF. Supporters of the gold standard would be against any such move, as they are against quantitative easing by national central banks.
Malpass is also on the record as a climate change denier, asserting when he ran for US Senate in 2010 that “he did not believe carbon dioxide created from human activity was warming the planet.” Georgieva, by contrast, emphasized in an op-ed one month ago that “[t]he International Monetary Fund estimates that 6-10% of global GDP — somewhere in the region of an additional $6 trillion to $10 trillion — needs to be invested in the next decade to green our economies.”
“This effort to oust Georgieva came from Malpass at the World Bank,” said Weisbrot. “It looks very much like a political move. There is motive, opportunity, and evidence. It warrants a congressional investigation.”