House Republicans Call for Yellen to Testify on IMF Scandal

(Bloomberg) -- House Republicans want Treasury Secretary Janet Yellen to testify on the Biden administration’s decision to refrain from calling for the removal of the International Monetary Fund chief following an ethics investigation and scandal.

Representative Patrick McHenry, the ranking GOP member of the House Committee on Financial Services, along with Representatives French Hill and Andy Barr, asked chairwoman Maxine Waters of California on Thursday to call the hearing, according to a letter seen by Bloomberg News. Summoning of witnesses rests with the chair. 

In a second letter to Yellen, they asked a list of questions pertaining to the probe and the fund’s issuance of $650 billion of new reserves to help countries through the pandemic, seeking a response by Nov. 15.

The IMF board earlier this month said its investigation didn’t conclusively demonstrate that Managing Director Kristalina Georgieva played an improper role in the report in question, which ranks countries’ business climates.

The U.S. -- the largest shareholder in both the IMF and World Bank -- had said the allegations against Georgieva “serious” and debated seeking her resignation, Bloomberg News reported this month, while ultimately stopping short of that move. Waters last month labeled the accusations against Georgieva “very troubling” and said that they “called into question the current leadership at the IMF.”

U.S. Treasury spokeswoman Alexandra LaManna declined to comment.

“We share your concerns that member countries like China can undermine multilateralism and the integrity of our international financial institutions,” the Republican lawmakers wrote in the letter to Waters. A hearing would allow the committee to hear from Yellen on her decision-making process and “any proactive steps that will be taken to reinforce data integrity, accountability, and credibility at the fund,” they said. 

In the letter to Yellen, they said it is concerning that the committee has yet to hear her testimony and that, “combined with the president’s failure to fill the position of undersecretary for international affairs, committee Republicans can only conclude that the Biden administration is indifferent to U.S. leadership in international economic governance.”

Yellen this month said that the scandal “raised legitimate issues and concerns” and could hurt confidence in the IMF and World Bank unless the institutions take strong actions to prevent misconduct and support whistle-blowers.

The Republican lawmakers also asked Yellen about the integrity of the fund’s Article IV annual evaluations, citing a Bloomberg News report this month that IMF officials including Georgieva softened a warning about environmental risks to Brazil’s economy after President Jair Bolsonaro’s government objected to the language. Almost 200 IMF staff signed a petition sent to Georgieva earlier this week asking for more details of the case.

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