IMF board weighs top official’s fate in wake of China scandal

The controversy heavily implicates Georgieva, creating an awkward dilemma for the Biden administration as it aims to keep up its quiet-but-tough stance toward China. Still, some officials have cast it more as a reputational issue for the IMF, a forum for global cooperation on exchange rates, trade and financial stability. The U.S. and its allies have a controlling number of votes on the IMF board, and China has been seeking to expand its influence there.

Georgieva left the World Bank in April 2019, later that year being named to head the IMF. The IMF board said it “remains committed to a thorough, objective and timely review” after a Wednesday meeting with her. It also met Monday with WilmerHale, the law firm that drew up the report.

Georgieva has strongly denied that she did anything improper.

“The WilmerHale Report does not accurately characterize my actions with respect to Doing Business 2018, nor does it accurately portray my character or the way that I have conducted myself over a long professional career,” she told the IMF board on Wednesday in a lengthy statement. Her lawyer, Lanny Breuer of Covington & Burling, said in a letter that the report draws “inappropriate and unsupportable inferences.”

“I look forward to an expeditious resolution of the matter in a way that preserves the core strengths of the IMF and the World Bank as strong multilateral institutions that fulfill their important missions during these times of unprecedented crisis,” Georgieva said in a statement Thursday.

The report in question says she pressured staff to “make specific changes to China’s data points in an effort to increase its ranking at precisely the same time the country was expected to play a key role in the Bank’s capital increase campaign.”

Treasury officials were asked whether the Biden administration wanted her out at the fund.

“There is a review currently underway with the IMF Board, and Treasury has pushed for a thorough and fair accounting of all the facts,” Treasury spokesperson Alexandra LaManna said in a statement. “Our primary responsibility is to uphold the integrity of international financial institutions.”

The IMF board met Wednesday with Georgieva and said it “remains committed to a thorough, objective and timely review.” It also met Monday with WilmerHale, the law firm that drew up the report.

Former World Bank chief economist Joseph Stiglitz recently defended Georgieva in an op-ed in Project Syndicate, arguing that the investigation “appears to me to be a hatchet job.”

“Throughout, Georgieva acted in an entirely professional way, doing exactly what I would have done (and occasionally had to do when I was chief economist): urge those working for me to be sure their numbers were right, or as accurate as possible, given the inherent limitations on data,” he wrote.

The IMF and World Bank will hold their annual fall meetings next week.