Head of Latin America’s leading development bank faces sacking over misconduct allegations

Leading member states of the Inter-American Development Bank are expected to vote to sack bank President Mauricio Claver-Carone after an investigation found wrongdoing over an undisclosed romantic relationship between him and a bank employee, according to senior government officials from countries with large voting stakes at the bank .

People familiar with the matter said the bank’s shareholders unanimously supported Mr Claver-Carone’s dismissal after a law firm conducting an investigation on behalf of the bank found evidence that he had been in a relationship with a bank employee who reported to him . The investigation also found Mr Claver-Carone approved a 45 percent base pay increase for the senior executive in less than a year, the people said.

Mr Claver-Carone could not be reached for comment. He said in a statement posted to the bank’s website earlier this week that he supports and is cooperating with the investigation. He denied having a relationship with the employee and said the investigation had not confirmed the “false and anonymous allegations” made against him in press reports.

“Despite the lack of due process, I have fully cooperated without relinquishing my constitutional rights,” he added.

A spokesman for the bank said he had no information about the bank’s board of directors’ vote. People familiar with the situation said the board on Thursday recommended Mr Claver-Carone be removed.

Mr. Claver-Carone, a Cuban who served as senior director for western hemisphere affairs at the National Security Council during the Trump administration, became the first US citizen to head the IDB, which has angered governments in the region since his appointment Tradition of having the institution headed by a Latin American. Prior to joining the Trump administration, Mr. Claver-Carone had championed the US trade embargo on Cuba. And in the White House, he was a key architect in tightening sanctions on Havana and Venezuela.

In mid-2020, the Trump administration appointed him to head the IDB, a Washington-based multilateral lender that last year made more than $23 billion in loans across the region in support of programs to reduce poverty, health, education, and more and provided infrastructure.

The final decision on Mr Claver-Carone’s sacking will be taken by the Bank’s Board of Directors, composed primarily of finance ministers from member countries. Member states such as the US, Brazil, Argentina, Mexico and Colombia, which together hold more than 60% of the total vote, are expected to approve the release next week, people familiar with the situation said.

“After a thorough, independent and credible investigation identified wrongdoing that violates the principles and values ​​of the Inter-American Development Bank, and after consultation with partners, the United States supports the dismissal of the IDB President,” the US Treasury Department spokesman said. Michael Kikukawa.

People familiar with the matter said the US was concerned about Mr Claver-Carone’s lack of cooperation during the investigation, including the refusal to release his bank-issued phone and other records.

“President Claver-Carone’s refusal to fully cooperate with the investigation and his creation of a climate of fear of retaliation among staff and borrowing countries has lost the confidence of the bank’s staff and shareholders and requires a leadership change,” Mr. Kikukawa said .

The appointment of Mr. Claver-Carone as head of the multilateral lender broke with a six-decade tradition in which a Latin American chaired an institution that also provides technical advice to member states.

write to José de Córdoba at jose.decordoba@wsj.com, Juan Montes at juan.montes@wsj.com and Andrew Duehren at andrew.duehren@wsj.com

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