WEF Spat Heats Up as Founder Klaus Schwab Denies Misconduct

(Bloomberg) — World Economic Forum founder Klaus Schwab denied allegations of misconduct that were reportedly substantiated by a formal investigation and accused the board of trustees of violating an agreement regarding media discretion on the matter.

“I am in a position to refute all the accusations brought up against me,” Schwab said in a statement Sunday, responding to a report in SonntagsZeitung. The Swiss newspaper said preliminary findings by Swiss law firm Homburger support allegations that Schwab manipulated economic reports published by the forum and submitted unjustifiably high expense claims.

The investigation, commissioned by the WEF’s board of trustees, is examining a range of accusations against the 87-year-old, including claims he used the forum’s resources for personal purposes. 

Schwab abruptly resigned from the WEF in April after the misconduct allegations emerged, sparking a clash with the board. A successor has yet to be named.

High-profile figures linked to the role have included BlackRock Vice Chairman and former Swiss National Bank President Philipp Hildebrand, who joined the board of trustees in May, and European Central Bank President Christine Lagarde, who until recently was considered the top candidate by both Schwab and the organization, Bloomberg previously reported.

Lagarde has said she first intends to complete her ECB term, which runs until October 2027.

The WEF board of directors is currently led by former Nestle Chairman Peter Brabeck-Letmathe on an interim basis.

WEF Dispute

In his statement Sunday, Schwab said he made himself available for an interview with Homburger on July 15. He was told he would have access to a draft of the report to respond to the allegations. He has yet to see a draft, a spokesperson added in a separate statement.

“In this respect I feel deceived,” Schwab said. “I am willing to defend my interests with all my strength, even in the context of a legal dispute.”

A WEF spokesperson declined to comment when contacted by Bloomberg on Sunday, stating that the organization would respond once the investigation concludes, likely at the end of August.

The SonntagsZeitung report intensifies an ongoing dispute between Schwab and the board of trustees at WEF and comes just weeks after the two parties issued a joint statement claiming they were working toward “normalizing” their relationship and resolving the dispute.

According to excerpts cited by the newspaper, Homburger’s investigation found that Schwab repeatedly intervened to influence country rankings in the WEF’s Global Competitiveness Report for political purposes. 

In one 2017 email to then-managing director Richard Samans, Schwab allegedly requested that the report be withheld to avoid straining his relationship with Indian Prime Minister Narendra Modi, whose country had scored poorly in the ranking. He also advised against improving the UK’s place to prevent the data from being exploited by supporters of Brexit, the newspaper said.

The report was ultimately published, with the UK and India each dropping one position to eighth and 40th, respectively.

In a separate incident in 2022, Schwab allegedly shared a draft of the report with an official from one country whose ranking had deteriorated and advised against its publication. That year’s edition wasn’t ultimately published, with the WEF citing uncertainty surrounding the Covid-19 pandemic as the reason.

The investigation also scrutinized some 900,000 Swiss francs ($1.12 million) in expenses submitted by Schwab and his wife Hilde that allegedly lacked sufficient ties to WEF activities, the newspaper said.

–With assistance from Jan-Henrik Förster.

(Updates with detail on current leadership of WEF in seventh paragraph. A previous version of the story clarified the eighth paragraph to add that Schwab hasn’t yet seen the report.)

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