WASHINGTON (Reuters)

Inter-American Development Bank (IDB) President Mauricio Claver-Carone today (September 26) denied any allegations of wrongdoing and said he had not been informed by Latin America’s biggest development bank that its governing board had voted to remove him.

Claver-Carone told Reuters that he had been denied due process in the bank’s handling of whistleblower allegations that he engaged in a relationship with a subordinate, and a subsequent independent investigation.

He said he would pursue legal action against the bank for breach of contract, and believed there was a case to be made for defamation as well.

His comments came after news surfaced that the governors of the IDB voted to fire Claver-Carone, a person with knowledge of the vote said, after an investigation showed the only American president in the bank’s 62-year history had an intimate relationship with a subordinate.

The governors of Latin America’s largest development bank began voting early on Thursday and reached the required quorum and majority vote Monday, the source told Reuters. Nominations for Claver-Carone’s replacement, likely a politically charged process, were expected to begin as early as next week.

Some members are pushing for Claver-Carone to be replaced with a woman, several sources briefed on the search for his replacement told Reuters.

Headquartered in Washington, the IDB is a key investor in Latin America and the Caribbean, behind nearly 600 ongoing infrastructure, health, tourism and other projects. It was responsible for US$23.4 billion in financing and other financial commitments in 2021, and was expected to lend billions to Argentina in 2022 and 2023 to help ease economic turmoil.

Cuban-American Claver-Carone was nominated for a five-year term then-President Donald Trump and took office in October 2020. He had tried to wrest power away from Argentina and Brazil, which have dominated the bank’s agenda in the past, and provide more of a role for smaller countries.

The 14 directors voted unanimously on Thursday to recommend firing Claver-Carone after an independent ethics investigation found evidence he had engaged in an intimate relationship with a senior staffer for whom he had made employment decisions, including salary increases totaling more than 45 per cent of base pay in less than one year.

Investigators found that Claver-Carone created a hostile environment at the bank, with numerous staff members fearing reprisals and retaliation for participating fully and honestly in the probe, three sources said. Ten of the 50 people interviewed for the probe expressed such concerns, one source added.

“Across the bank, everyone is celebrating this,” one source said about his departure.

Claver-Carone could not be reached by phone on Monday and did not respond to a text message. He has previously denied the allegations, blasting the investigation for failing to “meet international standards of integrity.”

The bank’s executive vice president, Reina Irene Mejia, from Honduras, is expected to take over as acting president until a successor is chosen, a source said.

The bank had no immediate comment.