IDB board sees 'emerging consensus' that Claver-Carone should be removed - source

© Reuters. Visitors walk past a screen with the logo of Banco Interamericano de Desarrollo (BID) at the Atlapa Convention Center in Panama City March 13, 2013. REUTERS/Carlos Jasso

By Andrea Shalal

WASHINGTON (Reuters) - The Inter-American Development Bank's board of directors is reaching an "emerging consensus" that its president Mauricio Claver-Carone should be removed after an independent ethics investigation, a source familiar with the process told Reuters.

Brazil, a major shareholder in the bank that had supported Claver-Carone's election, now favored taking action against the Trump-era nominee, said the source, who declined to speak publicly since the matter is still under review.

Reuters reported on Tuesday that Davis Polk, the outside legal firm hired to investigate whistleblower allegations against Claver-Carone found evidence that he engaged in an intimate relationship with a staffer and cited examples of abuse of power by Claver-Carone.

A decision by the board of directors could come in "days, not weeks," with the final decision up to the bank's board of governors, the source added.

The 14-member board met for a third day about the matter on Wednesday, joined by representatives from all 48 member countries.

The Davis Polk report also found that both Claver-Carone and the senior staffer in question failed to cooperate fully with probe, despite clear bank requirements to do so, the source said.

Claver-Carone and the staffer have both denied the allegations in general terms.

On Tuesday, Claver took aim at the board for its handling of the investigation, and said its results did not "substantiate the false and anonymous allegations" that triggered the probe. He posted his statement on the bank's website, a move described by two sources as highly unusual.

"There is emerging consensus at the IDB that this is too much, and action needs to be taken," said one of the sources, citing concern about Claver-Carone's lack of cooperation, and his move on Friday to demote an Argentine official who had served as vice president for finance.

"There is emerging consensus that he needs to be removed."

The Washington-based IDB is a development bank that, while far smaller than the International Monetary Fund or World Bank, is a major provider of development funding in Latin America.

The United States, the bank's biggest shareholder, has said it is closely reviewing the report but would refrain from further comment until the review was complete.

The report found that Claver-Carone refused to surrender his bank-issued mobile phone for analysis, or to provide any text messages between him and the staff on his personal phone, the source said.

It concluded that the lack of cooperation was relevant to the allegations in the complaint and was itself an independent violation of the bank's principles and policies, the source added.