Exclusive-U.S will not nominate another U.S. candidate for IDB, Treasury says

© Reuters. Visitors are attend the second day of the of the Inter-American Development Bank (IDB) meeting in Panama City March 15, 2013. REUTERS/ Carlos Jasso

By Andrea Shalal

WASHINGTON (Reuters) - The Biden administration will not nominate a candidate from the United States to head the Inter-American Development Bank (IDB) after this week's ouster of Mauricio Claver-Carone after an ethics scandal, a Treasury spokesperson told Reuters.

Claver-Carone, the first U.S. president in the 62-year history of the bank, was nominated in 2020 by former President Donald Trump, upending an unwritten understanding that the president of Latin America's largest development bank would come from a borrowing country in the region.

"We will return to the governance understanding that the previous administration shredded, by welcoming candidates from borrowing member countries to compete for the presidency," Treasury spokesperson Michael Kikukawa said. "The Biden administration will not put forward an American candidate."

The United States controls 30% of the voting shares of the bank, its largest shareholder by far.

The governors of the IDB voted on Monday to fire its Cuban-American chief after an independent investigation showed he had an intimate relationship with a subordinate and acted to give her salary increases totaling more than 45% of base pay in less than one year.

Claver-Carone denied in an interview with Reuters on Monday that he ever had an intimate relationship with the staffer and said he was planning legal action against the bank.

Headquartered in Washington, the IDB is a key investor in Latin America and the Caribbean, providing $23.4 billion in financing and other financial commitments in 2021.

President Joe Biden has vowed to "reinvigorate" Western hemisphere institutions such as the IDB, and sees the bank as a key player in responding to the high inflation and slow growth exacerbated by Russia's invasion of Ukraine, while working for more transparent lending in the region, U.S. officials say.

The Biden administration wants the bank to move on quickly from the leadership crisis and help lead efforts for greater economic cooperation with Latin America and the Caribbean.

Treasury said it would look for candidates who fully backed reforms aimed at leveraging private sector investment to create more jobs in the region and bolster confidence in the region’s democracies, while addressing climate change.

Under the formal selection process for a new president launched Wednesday, IDB governors can nominate candidates within the next 45 days.