IMF council to criticize researchers, Georgieva, this week over data falsification claims

The International Monetary Fund’s board of directors will intensify its investigation into managing director Kristalina Georgieva this week by interviewing her and researchers separately who said she pressured World Bank staff to change data in China’s favor, people said. with knowledge of the meetings.

The board will question lawyers from the WilmerHale firm on Monday about their World Bank investigative report, said three people familiar with the plans. The report alleged that Georgieva, as CEO of the bank in 2017, exerted undue pressure on staff to change data in the flagship “Doing Business” report to benefit China.

Georgieva, who has vehemently denied the allegations, will appear in person before the board of directors on Tuesday, the day she will deliver a virtual speech at the October 11-17 annual meetings of the IMF and the World Bank, two of the sources said. .

The interviews could be crucial in building or eroding the IMF’s shareholder support for Georgieva.

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So far, the fund’s most influential governments, including the largest shareholder in the United States, have withheld public comment, preferring to let the review process flow. Britain said in a statement to Reuters last week that it supports transparency in the matter.

The World Bank has commissioned WilmerHale to investigate the business irregularities identified in 2020, and published its findings involving Georgieva just over two weeks ago. The investigation was led by former U.S. District Attorney Ron Machen, who is co-chair of WilmerHale’s white-collar defense and investigative practice.

According to the research report, Georgieva and former World Bank president Jim Yong Kim pressured staff to manipulate data so that China’s global ranking in the “Doing Business 2018” investment climate study rose from 85th to 78th place.

The motive was reportedly to win Beijing’s support for a major capital increase that the bank’s management was seeking at the time.

International Monetary Fund (IMF) headquarters in Washington, US, April 8, 2019. (Reuters)

An IMF spokesman declined to confirm the scheduled meetings. Spokespersons for WilmerHale in Boston and Washington did not respond to requests for comment.

A Georgieva spokesperson also declined to confirm the meetings, but said in an emailed statement that Georgieva “will not be deterred by these false accusations and remains committed to fulfilling the essential mission of the IMF.”

A person familiar with the plan said the board expected to question the WilmerHale team about its investigation process – the scope of its assignment, how it conducted the investigation and how the decision was made to publish the results, what about little prior notice to Georgieva.

Other questions will seek details about the links made in the report between the changes in the data entry for “Doing Business” for China and the capital raising campaign, which resulted in a $13 billion increase in the World Bank’s paid-up capital in 2018. that increases China’s shareholding.

Another source said there are also likely to be questions about discrepancies between witness interviews, the report’s conclusions and subsequent public statements by at least one interviewee. Shanta Devarajan, the former World Bank economist who oversaw the 2018 Doing Business report released in October 2017, said he never felt pressure from Georgieva and the WilmerHale team only used half of his statements.

Machen did not respond to a request for comment.

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