Yellen declines to take IMF Chief ’s calls after scandal
Biden govt has yet to offer support for Georgieva
Treasury Secretary Janet Yellen has declined to return calls from the beleaguered head of the International Monetary Fund, Kristalina Georgieva, since a scandal broke, indicating that the Biden administration’s withholding of support for her goes beyond its public statements.
Georgieva has made attempts to speak with Yellen but has failed to get through, people familiar with the matter said, speaking on the condition of anonymity.
A bipartisan pair of top senators asked Yellen to ensure “full accountability” after an investigation found Georgieva improperly influenced a report in China’s favour in her previous job at the World Bank.
“Given how critical it is that this data be and be seen as unimpeachable, these allegations are deeply disturbing,” Senate Foreign Relations Committee Chairman Bob Menendez, a New Jersey Democrat, and ranking member Jim Risch of Idaho said in a September 22 letter seen by Bloomberg on Monday. “The impact these allegations could have on the strength and reputation of out international financial institutions and the Bretton Woods system are still unknown but surely they will not be good.”
The report from law firm Wilmerhale, commissioned by the World Bank, alleged that Georgieva — who took the helm of the IMF in 2019 — pressured bank staff to boost China’s business-climate rating. Georgieva previously had easy access to Yellen, the people said, given the close nature of multilateral engagement between the IMF and the Treasury. The pair spoke regularly earlier this year, Yellen’s calendars indicate, as the US and IMF worked on initiatives including the fund’s planned $650 billion global reserves injection.
The US is the largest shareholder in both the IMF and World Bank, and the Treasury Department manages those relationships. US Treasury spokeswoman Alexandra Lamanna declined to comment on Yellen’s recent contact with Georgieva. An IMF spokesperson also declined to comment, as did a spokesperson for Georgieva. “The credibility of the IMF is clearly being damaged,” said Timothy Ash, a strategist at Bluebay Asset Management in London and a veteran analyst of emerging markets. He said Georgieva should step aside until the investigations are complete.
A Treasury official said the department has reviewed the allegations of improper conduct and finds them to be concerning and serious. The department is awaiting the IMF’S own assessment, the person said, speaking on the condition of anonymity. The IMF ethics committee is currently reviewing the findings of the World Bank-commissioned report.
“As we have made clear, Treasury believes the report’s findings are serious and have warranted a full review by the IMF of the managing director’s role in the Doing Business Report,” Treasury’s Lamanna said, reiterating a statement made earlier this month.