Inter-American Development Bank votes to oust then-President Donald Trump

Governors of the largest Latin American-focused multilateral bank voted to remove its chairman after an external investigation found he had an undisclosed intimate relationship with a subordinate to whom he gave two major raises of salary.

The decision to oust Mauricio Claver-Carone, the controversial president of the Washington-based Inter-American Development Bank, was made early Monday afternoon, three sources familiar with the matter told the Financial Times.

The IDB then released a brief statement confirming that Claver-Carone “will cease to serve as President of the Bank, effective September 26, 2022.” Executive Vice President Reina Irene Mejía will act as president until a new leader is chosen, he added.

Claver-Carone, who served as former US President Donald Trump’s top adviser on Latin America, has consistently denied the charges and described the governors’ vote as a “political circus”.

“I am about to be fired and to this day. . . I have yet to ask legal counsel or anyone from the bank to formally contact me to present the original charge, the report, the rules I am subject to,” he told the FT. “The bank has failed to live up to its responsibility as a rules-based institution.”

The IDB, which facilitated $23 billion in loans to Latin America and the Caribbean last year, has hired US law firm Davis Polk to investigate charges by an anonymous whistleblower.

This person alleged that Claver-Carone failed to disclose a “romantic and inappropriate relationship” with a subordinate, incurred excessive hotel expenses while traveling with her, and retaliated against bank employees who had reported the alleged violations.

The confidential 19-page report, a copy of which was passed to the FT, concluded it was ‘reasonable to conclude’ Claver-Carone was in a relationship with the woman before she joined the bank and breached the policy of the bank by failing to disclose and carrying out employment actions for its benefit.

He also said he and the woman failed to cooperate fully with the investigation and that the couple had stayed in at least 15 cases in hotels that exceeded the bank’s cost limits. He did not uphold the complaint about the alleged intimidation of whistleblowers.

Claver-Carone and the woman denied not cooperating with the investigation, which sent a stir in Latin American diplomatic circles in Washington.

In a ‘final statement’ sent to the FT on Monday evening, the IDB president denounced what he called ‘old guard bureaucracies’ in the region which were ‘stuck in a cycle of populist ideologies and patronage Politics”.

“Despite the report which cleared me and my staff of all anonymous allegations and wrongdoing, they have now claimed a lack of cooperation and allowed lies to be manipulated and misinterpreted in what was believed to be a investigation to ‘the highest standards,'” he said.

The investigation revealed that a few days after the woman joined the IDB with a salary of $287,000, Claver-Carone requested and approved a salary increase for her of approximately 20%. Ten months later, she received another 20% raise, bringing her salary to $420,000, along with a new title.

The Davis Polk report was sent to the bank’s 14 executive directors on September 19. Last Thursday, they had voted unanimously to recommend Claver-Carone’s impeachment and put the issue to a vote by the board of directors of the 48 member countries of the IDB, including 16 European nations, South Korea, China and Japan as well as those of the Americas.

A U.S. Treasury spokesman said last week that “Claver-Carone’s creation of a climate of fear of retaliation among staff and borrowing countries has lost the confidence of bank staff and shareholders and necessitates a change of direction”.

Following Monday’s board vote, IDB member countries will begin considering possible successors. Costa Rica’s former president Laura Chinchilla, who ran against Claver-Carone to lead the IDB in 2020 before stepping down, is among the favored candidates to succeed him, diplomatic sources said.

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