IDB chief’s dismissal signals end to ‘reign of terror,’ say relieved employees

There is a feeling of relief, of joy, almost of jubilation, although the fear has not completely disappeared. EL PAÍS has spoken with former and current officials and employees of the Inter-American Development Bank (IDB) about the recent dismissal of the president, Mauricio Claver-Carone, following a probe over an alleged inappropriate relationship with a subordinate.

Everyone interviewed for this article underscored the negative working climate at the IDB, a leading regional development institution that is owned by 48 states, although the US is the biggest shareholder with 30% of voting power. Ever since the probe was launched through an anonymous complaint, a “regime of terror” had been established and employees lived in fear of reprisals, several people told this newspaper.

Claver-Carone, a former aide to ex-US president Donald Trump whose 2020 appointment was controversial as it broke with a tradition of choosing Latin American presidents, maintains that the accusations against him are false and that his dismissal is the result of a conspiracy between the Joe Biden administration, China and Latin American countries.

Carola Álvarez held various positions of responsibility at the IDB over the last 15 years. Beyond the “immediate and sensational” nature of the relationship that has led to the dismissal of Claver-Carone, during his tenure “a culture of retaliation was created within the institution against any discrepancy or difference of opinion,” she said. There were reprisals for people who published a program evaluation with a negative result “because of the consequences and the inconvenience that this generated for the Trump administration,” explains Álvarez.

“An organization where professionals cannot do their job, cannot tell the truth, disagree or present an alternative point of view is not a dynamic organization that grows and thrives,” agrees Therese Turner-Jones, who left the IDB in April 2022 after 15 years working as a manager, and more than 20 years of previous experience at the International Monetary Fund (IMF). This former worker describes an abuse of power by the bank’s management leadership that should not have been allowed.

This created a culture of fear: “No one was talking, conversations were taking place outside, not inside the building. That’s how ridiculous it was,” adds Turner-Jones, noting that colleagues at the bank seemed “depressed, despondent and demoralized.”

Verónica Zavala, a former minister of transportation and communications in Peru before joining the IDB, illustrates the point: she tweeted some ideas about the need for reforms, and many colleagues inside the bank called her or wrote her private messages, but no one dared to retweet her public messages or give them a simple ‘like.’ “If you have a G-4 visa [the one issued to international agency officials to work in the US] and a family to support and you have nowhere else to go...” says Turner-Jones.

“There are people who were removed from their post because they put up a photo on LinkedIn showing a person that they [Claver-Carone and his chief of staff] did not like,” says Álvarez. “This attitude of persecution and fear is what is terrible. And what it says is that institutional tools are not enough to provide a counterweight or check against a situation where someone wants to establish this culture.”

Zavala believes that the IDB’s problems went deeper than Claver-Carone’s alleged romantic relationship with his chief of staff and the subsequent violation of the organization’s ethics principles. “In a way, it’s like convicting Al Capone of cheating on his taxes. There is much more behind it than that, but it allowed the board of directors and the governors to make a decision.” The IDB’s board of directors unanimously recommended dismissing Claver-Carone, and later the vast majority of the governors did as well.

With Claver-Carone removed, many of those consulted for this story are now concerned about how to avert similar risks in the future. “Hopefully reflections will be made that will lead to a strengthened institution, with the appropriate checks and balances, for the benefit of the region,” says Zavala. “Institutions are tested at times of stress. This president had no respect for the institutions, he had a very different vision and the institutions did not work to ensure that the processes were handled properly during this presidency.”

“The important thing is for this not to happen again,” agrees Turner-Jones. “This case is solved. Really, it has damaged the reputation of the institution, but it is about where we go from here, especially considering the needs of the region.”

A controversial appointment

The appointment of Claver-Carone, imposed in 2020 due to pressure from Donald Trump, broke the tradition of the IDB president coming from one of the borrowing countries, and it was controversial from the beginning. Claver-Carone maintains that he was met with a hostile reception and that he was routinely denied information, as he pointed out in a recent interview on NTN24. EL PAÍS has tried unsuccessfully to reach him for comment through IDB services. In the televised interview, the ousted president said he was subjected to a trial without rules. “I don’t care that they have decided to take me out of the bank. I care that it was in a defamatory and dirty way.“

The bank’s governor for Germany, Niel Annen, Secretary of State for Cooperation of the German Ministry of Cooperation and Development, explained his position in statements to a German television station: “More than the love affair, it has been a clear violation of the bank’s Code of Ethics. For me personally and also for my fellow governors, it was a very serious fact that trust was broken because Mr. Claver-Carone was not cooperating with the investigation. On the contrary, he was using the bank’s resources to defend himself publicly and I think that was very serious.”

The replacement

No replacement for Claver-Carone has been selected yet, but Mexico has announced that it will present Alicia Bárcena as a candidate. The former president of Costa Rica, Laura Chinchilla, who was already a rival to Claver-Carone in 2020, and former Chile president Michelle Bachelet have also been mentioned as potential candidates. The United States has given up on backing an American nominee, and would be glad to see the post filled by a woman who can build enough consensus to give stability to the institution after this crisis.

“I think there are plenty of capable, mission-ready women out there to take on this challenge,” says Zavala. “It would be great and there are so many that it should be possible to find the perfect one, but regardless of whether it is a woman or a man, what seems important to me that it be a person who understands the technical aspects. This bank is not a financial entity, it is a development entity.” It should also be someone with a good understanding of the political diversity of Latin America and the Caribbean, she adds.

“I think the key word is credibility,” says Álvarez. Candidates can step up until November 11, and the board of governors is planning to elect the new president on the 20th.