Brazil favors removal of Trump-picked Bank Chief on Ethics Hunt

(Bloomberg) — Brazil, the second-largest shareholder in the Inter-American Development Bank, supports the removal of the lender’s president amid an ethics probe into his role, according to a top government official from the South American nation.

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President Jair Bolsonaro’s administration sees IDB’s Mauricio Claver-Carone as unable to continue leading the Washington-based bank after the investigation highlighted an alleged romantic relationship with apparent violations of the bank’s rules, it said the officer, trying not to do so. to recognize because the government’s position is not public.

The Brazilian government, which has an 11.4% stake in the bank and together with the US and Argentina has almost 53% of its voting power, is hoping for a solution to the situation soon as Claver-Carone is losing internal support, according to the person. . To remove Claver-Carone, a simple majority of voting shares would be needed from the countries seeking his oysters.

The final decision would be made by the board of governors, mostly government finance ministers to whom the board’s executive directors report, although they are expected to support the executive board’s recommendation.

Brazil’s Ministry of Economy, which oversees relations with the IDB, declined to comment, as did the IDB’s own press office.

When Claver-Carone, a former Trump administration official, was appointed to lead the development bank focused on Latin America, he opened a rift between the US and the region in 2020. He was the first citizen of the United States who headed a traditionally Latin-dominated institution. American since its creation in 1959.

Although Brazil at the time supported his candidacy as part of the Bolsonaro-Trump deal, the relationship between Claver-Carone and Economy Minister Paulo Guedes has been rocky, with fights over Brazil’s representatives to the bank, the person said.

Claver-Carone was expected to appear before the bank’s board on Thursday to respond to the allegations in a session with the institution’s executive directors, Bloomberg News reported earlier.

Read More: Trump picks Latin American Bank chief to address Board on Explorer

The former top Treasury adviser, International Monetary Fund representative and Miami satellite radio host has mounted an aggressive defense to keep his job. In a statement posted Tuesday on the IDB website, Claver-Carone said he fully cooperated with the investigation and declared that he “does not substantiate the anonymous false allegations made against me or IDB staff in the newspapers.”

He said the investigator himself violated IDB rules because he and other IDB staff “did not have the opportunity to review the final investigation report, respond to its conclusions, or correct inaccuracies.”

The investigation found evidence — supported by handwriting analysis, divorce records and interview statements — that supported the conclusion that the two had a romantic relationship before joining the Washington-based IDB in late 2020 “and that the relationship may have continued during their employment at the bank,” according to a Sept. 19 report prepared by law firm Davis Polk & Wardwell LLP at the direction of the IDB board.

​​​​The probe also found that Claver-Carone took an employment action to benefit the assistant, doubling her salary in less than a year for a cumulative 46% increase to more than $400,000.

The report has not been made public but has been seen by Bloomberg.

Neither Claver-Carone nor the assistant fully cooperated with the investigation, according to the report. Claver-Carone denied in interviews with Davis Polk in recent weeks that he had a romantic relationship with the aide, who declined to be interviewed for the investigation, according to the report. The person did not respond to requests for comment.

Read more: Latin America Development Bank Chief Decries Personal Reasons

In comments to Bloomberg, Claver-Carone said he was interviewed by investigators for more than seven hours and responded to many of their requests for information.

He said the investigation failed to provide him with due process. “A fundamental lack of fairness shows that this is a purely political process,” he said.

Davis Polk did not respond to requests for comment.

The IDB, which is strategic to the influence of the US in Latin America, lent $ 23.5 billion last year, focusing on boosting economies and offering lines of credit to buy Covid-19 vaccines for a region that was one of the most difficult in the world hit by the pandemic. Nations experienced one of the worst economic contractions in their history in 2020, with millions losing jobs or falling into poverty.

(Updates with details of the votes and the investigation and Claver-Carone’s comments starting in the fourth article.)

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