WASHINGTON — The International Monetary Fund board on Monday expressed confidence in the leadership of Kristalina Georgieva, its chief executive, after allegations that she manipulated data to appease China when she was a senior World Bank official.
The decision came less than a month after an independent investigation commissioned by the World Bank concluded that it played a central role in its involvement in the 2018 Doing Business investigation. The findings raised questions about its judgment and ability to conduct the investigation. to continue to lead the IMF. But in the end, the board of directors decided that the investigation into Ms. Georgieva’s actions “did not conclusively show” that she had acted improperly.
“After reviewing all the evidence presented, the board reaffirms its full confidence in the director’s leadership and ability to carry out its duties effectively,” the IMF board said in a statement. “The Board relies on the Director’s commitment to uphold the highest standards of governance and integrity in the IMF”
Ms Georgieva, a Bulgarian economist, retained strong support from many of the IMF’s shareholders, including France, who had lobbied hard for her to get the job in 2019. The United States, the fund’s largest shareholder, declined to show public support for her over the allegations, but ultimately did not call for her removal.
Treasury Secretary Janet L. Yellen spoke to Ms Georgieva on Monday and told her that the World Bank’s investigation into her actions “raised legitimate concerns and concerns,” the Treasury Department said. However, Ms Yellen said that in the absence of “further direct evidence” regarding Ms Georgieva’s role in data manipulation at the World Bank, according to a readout of the call, there was no basis for a change in leadership at the fund.
The outcome could lead to political backlash for the Biden administration. Republicans and Democrats in Congress had urged Ms. Yellen to press for “full accountability” after it emerged that Ms. Georgieva had instructed staff to find a way to ensure China’s rankings would not plummet in the annual report on the national business environment.
The Biden administration and lawmakers from both sides are concerned about China’s growing economic clout and influence in multilateral institutions.
Treasury officials debated the seriousness of the revelations for weeks and publicly urged that the process of reviewing Ms. Georgieva’s actions at the World Bank be allowed.
The World Bank’s Doing Business report assessed the business environment in countries around the world. Developing countries in particular cared a lot about their rankings, which they used to attract foreign investment.
At the time of the reported manipulation, World Bank officials were concerned about negotiations with members for a capital increase and were under pressure not to anger China, which ranked 78th on the list of countries in 2017 and in the report by 2018 would fall. .
According to the investigation, the staff of Jim Yong Kim, the bank’s then president, held meetings to find ways to improve China’s position. Ms. Georgieva also got involved, working with a top assistant to develop a way to make China look better without affecting the rankings of other countries.
The investigation revealed that Mrs. Georgieva was “directly involved” in efforts to improve China’s position and at one point reprimanded the bank’s Chinese director for mismanaging the bank’s relationship with the country.
Last week, the IMF’s board of directors spent hours interviewing officials from the law firm WilmerHale, which led the World Bank’s investigation. They also interviewed Ms. Georgieva, who criticized the process of that investigation and insisted that she had acted correctly.
“The WilmerHale report does not accurately describe my actions regarding Doing Business 2018, nor does it accurately reflect my character or the way I have conducted myself over a long professional career,” Ms Georgieva said in a statement to the board of directors. ; it was obtained by The New York Times.
Ms. Georgieva was a longtime employee of the World Bank and climbed through the ranks to become its director. She was previously a member of the European Commission – the executive body of the European Union – and she has a Ph.D. in economics from the University of National and World Economics in Sofia, Bulgaria, where she also taught.
Ms Georgieva said in a statement Monday evening that the episode had been difficult for her personally and that she was grateful that the IMF board had expressed its confidence in her leadership.
“I am pleased that, after a comprehensive, unbiased assessment of the facts, the IMF’s board of directors agrees that the allegations were unfounded,” Ms Georgieva said. “Trust and integrity are the cornerstones of the multinational organizations that I have served faithfully for more than four decades.”