Beijing’s Agent? Treasury Department May Boot IMF Chief Georgieva Over Data Rigging To Favor China

The U.S. Treasury Department is reportedly mulling the possibility of requesting International Monetary Fund (IMF) chief Kristalina Georgieva to step down from her position over an alleged ethics scandal that claimed she pressured World Bank staff when she was chief executive to adjust China’s ranking in the “Doing Business 2018” report.

According to Bloomberg, people with knowledge of the matter said that Treasury Department officials have been discussing whether the Managing Director should be asked to resign as the fund said it continues to review the investigation results by law firm WilmerHale, which the World Bank commissioned for the probe. The fund’s 24-member executive board met with Georgieva Wednesday as part of its review. Earlier this week, the executive board met with WilmerHale.

The U.S. government’s position in the matter could play a major role in the board’s review of the allegations as the country accounts for 16.5% - the biggest share – of the fund’s voting rights. One person told the outlet that the board met for about five hours. Executive directors are scheduled for another meeting Friday to discuss the matter.

In mid-September, WilmerHale revealed in its independent investigation report that Georgieva applied “undue pressure” on staff to improve China’s ranking, raising concerns about China’s influence and hold at the World Bank, Reuters reported.

Georgieva said she disagreed “fundamentally with the findings and interpretations” on the WilmerHale report. Shortly after news of the report emerged, the Treasury Department said it was analyzing the report’s “serious findings.”

In the report, WilmerHale said there was “direct and indirect pressure” in then-World Bank President Jim Yong Kim’s office to alter the report’s methodology in favor of China’s ranking. The report noted that the “pressure” could have likely occurred under Kim’s orders. The report also mentioned that Georgieva and key adviser Simeon Djankov pressured staff to “make specific changes to China’s data points.” At that time, the World Bank sought China’s support for a capital increase.

In a statement released Wednesday regarding the matter, an IMF spokesperson said the fund’s executive board “remains committed to a thorough, objective, and timely review and expects to meet again soon for further discussion.” The World Bank has since canceled the economic report.

In the World Bank’s “Doing Business 2018” report published October 2017, China’s ranking was at 78th place. In the initial draft report, China’s ranking was seven places lower. The bank’s “Doing Business” report ranks nations based on several business factors including legal environments and business climate policies.

This is not the first time the chief of a global institution is facing such an accusation regarding China. WHO chief Tedros Adhanom Ghebreyesus has faced accusations of having been "bought by China." The U.S. has criticized the global health agency since the beginning of the COVID-19 pandemic for its “favoritism” toward Beijing.