Georgieva’s Future at Helm of IMF Still Unclear After Marathon Board Meeting

World Bank Chief Executive Officer Kristalina Georgieva speaks at the annual session of China Development Forum (CDF) 2018 at the Diaoyutai State Guesthouse in Beijing on March 25, 2018. (Jason Lee/Reuters)

WASHINGTON—The International Monetary Fund’s executive board ended a five-hour meeting about the future of Managing Director Kristalina Georgieva without a decision on Friday, saying it would seek more information about claims she pressured World Bank staff to alter data to benefit China in her previous role.

The IMF said the board had made “significant progress” in its review of the World Bank data-rigging scandal, but agreed to request “more clarifying details with a view to very soon concluding its consideration of the matter.”

It was not immediately clear if the board would meet again before the start of next week’s high-profile meetings of the IMF and World Bank, where Georgieva is due to play a prominent role in presenting the global lender’s newest economic forecasts.

Georgieva said she had answered all the board’s questions and remains at the board’s disposal as it concludes its review.

Georgieva has strongly denied the allegations, which date back to her time as chief executive of the World Bank in 2017. Her lawyer claims that a probe by the WilmerHale law firm hired by the World Bank to investigate data irregularities in its flagship “Doing Business” reports violated World Bank staff rules in part by denying her an opportunity to respond to the accusations, an assertion WilmerHale disputes.

In a letter to the International Monetary Fund Executive Board released on Thursday, Covington & Burling attorney Lanny Breuer asked directors to consider “fundamental procedural and substantive errors” with the investigation report by WilmerHale.

China has not commented on the findings of the report.

But hopes for any quick consensus on her future at the IMF faded amid uncertainty over the U.S. position.

The U.S. Treasury, which controls 16.5 percent of the IMF’s shares, declined to comment after Friday’s meeting.

Treasury spokesperson Alexandra LaManna said earlier this week that the department has “pushed for a thorough and fair accounting of all the facts” in the ongoing review. “Our primary responsibility is to uphold the integrity of international financial institutions,” she said.

Marathon Meetings

Friday’s marathon executive board meeting, held behind closed doors, followed lengthy meetings with Georgieva and the WilmerHale lawyers earlier in the week.

WilmerHale’s investigation report (pdf) prepared for the World Bank board alleged that when Georgieva was World Bank CEO in 2017, she applied “undue pressure” on bank staff to make data changes to the flagship “Doing Business” report to boost China’s business-climate ranking.

Europe’s backing is important since the IMF chief has traditionally been chosen by European governments, with the U.S. administration nominating the World Bank’s president.

France in 2019 backed Georgieva, a former senior European Commission official, as a compromise candidate to break a deadlock over the successor to Christine Lagarde, now European Central Bank president. She is the first person from a developing economy to head the institution.

Annual Meeting Clouds

The issue is expected to dominate next week’s annual meetings of the World Bank and the IMF.

Current and former staff from both institutions said that no matter who is to blame for the altered data, the scandal has dented their research reputations, raising critical questions over whether that work is subject to member country influence.

Anne Krueger, a former World Bank chief economist and IMF first deputy managing director, argued in a blog post on Thursday that Georgieva must step down to restore the Fund’s credibility.

“Should Georgieva remain in her position, she and her staff will surely be pressured to alter other countries’ data and rankings,” Krueger wrote. “And even if they resist, the reports they produce will be suspect. The entire institution’s work will be devalued.”

By David Lawder and Andrea Shalal