The relationship with an employee and the favorable treatment she gave him has cost Mauricio Claver-Carone his job. The assembly of governors of the Inter-American Development Bank has decided to remove him as president after an investigation made it clear that he had violated the institution’s practices. The report by the law firm Davis Polk & Wardwell made it clear how Claver-Carone not only had an illegal love affair with an employee, but also raised her salary several times to keep her happy.
The IDB Board of Directors he had already unanimously recommended last week the dismissal of Clever-Carone. The Joe Biden government had withdrawn its support for an appointment from the last stage of Donald Trump’s presidency and that was already controversial because until now the position of president was traditionally held by one of the borrowing countries, that is, a Latin American. Claver-Carone was elected on September 12, 2020. He had just completed the second of the five-year term for which he was appointed.
The United States is the country with the most voting power in the IDB, in accordance with its participation in the capital, slightly above 30%. In the appointment of Claver-Carone, Washington finally achieved a majority support of 67%, which in practice showed a great division among the rest of the countries. Now, without the support of Joe Biden and Treasury Secretary Janet Yellen, Claver-Carone’s fate was cast.
The governors of the bank had to vote on the proposal for dismissal, with the deadline of this Tuesday and without the need for the vote to be in a meeting, but rather it could be sent remotely. This Monday the necessary votes have already been produced for the removal of Claver-carone, according to sources cited by various news agencies. The IDB did not answer a request for information from EL PAÍS and has not yet officially made public the dismissal of its president.
The content of the report, revealed last Wednesday by EL PAÍS, maintains that the president and the chief of staff had a romantic relationship, something prohibited by the internal policy of the multilateral organization. In these two years of Claver-Carone as president, the woman, J. B, obtained two salary increases. The president denied all the accusations, but the account of the facts that the law firm Davis Polk & Wardwell has compiled in its investigation, including some quite explicit messages, left little room for doubt. In addition, Claver-Carone did not allow investigators access to her mobile phone or email messages.
“There is evidence to support the conclusion that they had a romantic relationship before joining the Bank and that the relationship may have continued during their employment,” the report says. In less than a year, the president approved two salary increases for J.B, the first one upon arrival. The woman was hired on September 23, 2020 for a net annual salary of $287,000 (a similar figure in euros at the current exchange rate). A week later, on October 1, Claver-Carone approves a 20% increase, up to $350,000. In July 2021, the president signs a new increase of 20%, up to 420,000 dollars.
Despite all the findings against him, Claver-Carone launched a long statement last Tuesday in which he argued that what endangered the IDB’s reputation was the investigation and not its conduct. “It is the first time in the history of any multilateral development bank that this kind of process has been carried out, where an elected leader has been the subject of an arbitrary investigation without any formal complaint within the administrative rules of the organization, and that was initiated on the basis of anonymous and unsubstantiated complaints. It’s unprecedented,” he complained.
The substitute
It is not yet clear when the new replacement appointment will take place, which must be agreed upon by the member countries of the IDB, the development bank of Latin America. At the moment, the foreseeable thing is that the executive vice president, the Honduran Queen Irene Mejía, appointed in December 2020, will assume the acting presidency. Before joining the IDB, Mejía worked for almost 25 years at Citibank Honduras, where she held the position of CEO and Head of Corporate and Investment Banking since 2013.
To be elected president of the IDB, the candidate must have the support of a number of member countries of the bank that give him an absolute majority of the Bank’s voting power, as well as an absolute majority of the number of member countries of the Americas. The IDB has 26 borrowing member countries in Latin America and the Caribbean, in addition to Canada and the United States. Countries outside the region have 16% of the capital. In addition, a quorum is required whereby an absolute majority of the total number of governors participate in the election, including an absolute majority of the regional governors, with a voting power representing at least three-fourths of the voting power of the institution. The main shareholders are the United States (30% of the voting rights), Brazil (11.35%), Argentina (11.35%) and Mexico (7.3%). Spain has 1.96%.
The IDB group achieved a record $23.4 billion in funding and mobilization in 2021which included a record $3 billion from IDB Invest and record financing for climate change and value chain projects.