Tue | Nov 29, 2022

Race on for top job as Nigel Clarke-led board sacks IDB president

Published:Tuesday | September 27, 2022 | 12:09 AMHuntley Medley/Associate Business Editor
Sacked IDB President Mauricio Claver-Carone.
Sacked IDB President Mauricio Claver-Carone.
Clarke has been tight-lipped on the Claver-Carone scandal, declining repeated Financial Gleaner requests for a comment.
Clarke has been tight-lipped on the Claver-Carone scandal, declining repeated Financial Gleaner requests for a comment.
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Member countries of the Dr Nigel Clarke-chaired Inter-American Development Bank (IDB) are now vying to put forward preferred candidates for the post of president of the bank after the position became vacant on Monday following the termination of...

Member countries of the Dr Nigel Clarke-chaired Inter-American Development Bank (IDB) are now vying to put forward preferred candidates for the post of president of the bank after the position became vacant on Monday following the termination of the tenure of its Mauricio Claver-Carone.

Honduran banker Reina Irene Mejía Chacón, the IDB’s executive vice-president and chief operating officer, is expected to assume the role of interim president.

Claver-Carone, once a top official in the administration of former United States President Donald Trump, was part of an experiment – highly unpopular in Latin America and the Caribbean – for an American to head the nearly 63-year-old organisation for the first time in its history.

That unprecedented move ended in tatters three years ahead of Claver-Carone’s scheduled five-year term of office, when the 48-member board of governors of the Washington DC-based institution finalised a vote on Monday to remove the president, the Trump nominee, over alleged ethics violations.

Claver-Carone was elected amid controversy on September 12, 2020, at the height of the COVID-19 pandemic, by 30 of the IDB’s 48 governors after an attempt by some Caribbean and Latin American countries to delay the vote fizzled. Two other potential candidates from Argentina and Costa Rica pulled out of the race.

Since being elected, Claver-Carone has led a raft of sweeping changes at the institution, including an effort to cull the power of big nations like Argentina and Brazil and attempting to give smaller member states a greater voice, winning approval for a major capital increase and giving greater focus to private-sector investments over loans.

However, in April this year, he became the subject of an internal ethics probe, which was sparked by an anonymous letter, and initiated by a resolution of the 14-member board of directors which received the approval of the Clarke-led board of governors for the investigation to be done. Clarke is Jamaica’s minister of finance and the public service.

VIOLATION OF ETHIC RULES

The investigation is said by international news agency Reuters to have centred on the nature of personal relations between Claver-Carone and a senior staffer for whom he made employment decisions, a situation that is said to violate the ethics rules of the bank.

Voting by the board of governors on the termination recommendation from the board of directors started on Thursday last week and a majority vote for termination was reached on Monday.

Late Monday afternoon, the IDB issued a statement on the decision, noting that its board of governors, “following the unanimous recommendation by the board of executive directors, has resolved that Mr Mauricio Claver-Carone will cease to hold the office of president of the bank, effective on September 26, 2022”.

Claver-Carone, a Miami-based Cuban American, had labelled the allegations as false and railed against the investigation process from the outset.

While the former president was said by Reuters sources to have been uncooperative with the investigation, Claver-Carone said in a recent statement that he “fully cooperated without relinquishing constitutional rights”.

An official visit to Jamaica in December last year by Claver-Carone and a top-level IDB delegation was overshadowed by his abrupt non-renewal of the employment contract of Therese Turner-Jones as the IDB’s Jamaica country representative and general manager of its Caribbean department.

As confirmed by the former IDB president to the Financial Gleaner at the time, the sacking of Turner-Jones, who was sent on immediate administrative leave in December, prior to the termination of her contract in March this year, was only one of several top-level staff changes he had made across the bank since he assumed office in October 2020.

The IDB is a major source of grant and loan funding for the countries of Latin America and the Caribbean. Its private-sector arm, IDB Invest, provides equity funding for businesses in the region. Its total capital provision last year was US$23 billion.

The IDB is said to have provided US$456 million in loan and grant funding to Jamaica in the five years to 2021.

huntley.medley@gleanerjm.com