Treasury Secretary Janet Yellen conceded on Monday that “legitimate issues and concerns” have been raised by a report that found World Bank data was rigged to make China looked better, but added she saw no reason to replace International Monetary Fund (IMF) Managing Director Kristalina Georgieva for her alleged role in the scandal.
Yellen settled for asking Georgieva and her colleagues to take “proactive steps” to “reinforce data integrity and credibility at the IMF.”
The Treasury Department said the report on World Bank data-rigging by law firm WilmerHale “does underscore the need for shareholders to be vigilant in defending the integrity of both the Bank and the Fund.”
Treasury promised to “monitor follow-up closely” and “evaluate any new facts or findings.”
The IMF executive board stood behind Georgieva on Monday.
“Having looked at all the evidence presented, the Executive Board reaffirms its full confidence in the managing director’s leadership and ability to continue to effectively carry out her duties. The board trusts in the managing director’s commitment to maintaining the highest standards of governance and integrity in the IMF,” the board said.
According to WilmerHale’s analysis, which was published in mid-September, Georgieva was among the World Bank officers who pressured staffers to fudge the numbers so China would look better in the annual “Doing Business” report for 2018.
This was allegedly done to induce Chinese Communist Party leaders to support a capital increase favored by the World Bank. The unfavorable business environment depicted by the unfudged “Doing Business” data would have made China look much less appealing to investors.
“Multilateralism was at stake, and the Bank was in ‘very deep trouble’ if the campaign missed its goals,” Georgieva told WilmerHale’s investigators.
The World Bank Group permanently canceled the report after the data manipulation was revealed, citing the “ethical matters” called into question by WilmerHale’s report, “including the conduct of former Board officials.”
Those ethical matters unleashed a storm of outrage in September. Analysts noted major investment decisions were influenced by the “Doing Business” report. The discovery that bank leaders manipulated the numbers to placate Chinese Communists sent up red flags about corruption and politicization at the World Bank, not to mention concerns about the malevolent influence of the CCP spreading into Western institutions.