World Bank Mishandled Sexual- Harassment Claims, Internal Tribunal Says

Mr. Chaves left the bank in 2019, weeks after he was demoted, to become Costa Rica’s finance minister.

The labor tribunal, which serves as a judicial forum of last resort for the bank’s 12,000 employees, released the 56-page ruling in June.

Through his press secretary, Mr. Malpass declined to comment. A spokesperson said that the World Bank maintains confidentiality in ethics cases to protect staff members involved in allegations of misconduct and to preserve the integrity of investigations.

Jim Yong Kim, who served as World Bank president from 2012 to 2019, and Robert Zoellick, Mr. Kim’s predecessor from 2007 to 2012, didn’t respond to requests for comment.

The bank apologized to the women for its mishandling of the case and said that it has taken steps to ensure that those who bring complaints have a greater voice in sexual-harassment cases.

“Like many large organizations, we know we can always do better, and we must ensure we are taking every step necessary to prevent wrongdoing and support survivors of sexual harassment,” Annette Dixon, the bank’s current human-resources chief, said.

Mr. Chaves denied that he sexually harassed female colleagues. The complaints likely originated from “cultural differences and behaviors that, for other people, would not be offensive,” he said.

Between 2009 and 2013, Mr. Chaves engaged in a pattern of unwelcome sexual advances and insinuations, according to the tribunal’s findings. The tribunal reviewed testimony collected by the bank’s ethics department that involved interviews with 30 witnesses. Mr. Chaves’s actions included leering, kissing attempts, unwelcome invitations to hotels and vacations, questions about personal relationships and comments on physical appearance to half a dozen women, including bank employees, subordinates and consultants, according to the findings. Two of the women involved were in their early 20s, in their first jobs and “very junior” to Mr. Chaves, according to the testimony.

One of the women, 22 years old at the time, told the tribunal that Mr. Chaves began sexually harassing her within weeks of her joining his unit as a junior associate in 2009. She told investigators that Mr. Chaves commented that he liked it when she bent over, “then proceeded to drop an item and ask her to pick it up for him, a request which she refused.”

“The harassment took place on a daily basis,” she was quoted as saying to investigators.

Mr. Chaves said in response to questions from the Journal that such an incident didn’t occur and that there were no corroborating witnesses.

The two women who brought the initial case against Mr. Chaves said that they were only “the tip of the iceberg” of a “large number of victims” in the case.

Mr. Chaves said in response that the World Bank and the tribunal ruled that the investigation was fair, complete and impartial.

The Staff Association, the employee union that safeguards labor rights of staff, told the tribunal that the Bank’s initial response to the allegations showed a “deeply flawed understanding” of how to address sexual harassment in an institution tasked with fostering gender inclusion and human development in the poorest corners of the world.

In 2007, former World Bank President Paul Wolfowitz quit over a memo he sent to the human-resources vice president, instructing him to arrange a pay increase and promotion for Mr. Wolfowitz’s girlfriend. Dominique Strauss-Kahn resigned as the International Monetary Fund’s managing director in 2011 after he was accused of sexual assault in a New York hotel, although the charges were later dropped.

According to the labor tribunal’s findings, the World Bank in this case ignored repeated complaints about Mr. Chaves’s behavior at its Washington, D.C., headquarters since as far back as 2009.

A World Bank research economist told investigators that in mid-2009, after several offers of coffee, lunch or a mentoring relationship, she agreed to meet Mr. Chaves for lunch. At the lunch, Mr. Chaves made a reference to having an orgy with six different animals and asked her directly whether she had ever cheated or had an affair with a married man.

She was quoted in the tribunal’s document as saying that she responded to his comments and questions by “literally staring at the plate,” “literally frozen […] in complete shock.”

She said she reported the incidents to her managers, who were in a separate unit from Mr. Chaves, and wrote an email to him requesting that he avoid topics of an explicit nature, according to the tribunal’s report.

Mr. Chaves responded in an email that her “actions could be construed as threatening in view of their potential negative implications on my reputation, relationship with my family and career in the bank,” according to the tribunal’s document.

Queried by the Journal, Mr. Chaves wrote that the lunchtime allegations referred to subjective perceptions of events that the woman found disturbing, but that there were no sexual advances or physical contact.

In 2013, Mr. Chaves was promoted, becoming country manager of Indonesia, a director-level position.

In 2017, another female employee made a formal complaint about Mr. Chaves to the co-chair of the bank’s newly created working group on sexual harassment, prompting an investigation by the ethics department, according to the tribunal’s ruling.

In testimony, the co-chair of the working group told investigators that Mr. Chaves’s name had come up during informal staff meetings as a “well-known sexual harasser,” according to the testimony. Also in the testimony, one of the women told investigators it took her years to formally report, since she understood that previous efforts by colleagues to report his “well known” behavior had been of no benefit.

Two years after the complaint was made to the bank’s working group on sexual harassment, the ethics department filed its final report to the bank’s human-resources unit.

In late 2019, the human-resources department imposed an administrative sanction on Mr. Chaves, including a demotion to a nonmanagerial position and a three-year salary freeze, for “inappropriate behavior of a sexual nature.” The department made no mention in its decision letter of sexual harassment, which under bank guidelines would have led to immediate dismissal. The department also took no action to protect the victims from Mr. Chaves during the investigation and after, the tribunal found.

In its decision letter, the human-resources department cited mitigating circumstances, such as Mr. Chaves’s “stellar” record during more than two decades of service and his winning, in 2010, a bank prize for “diversity and inclusion.” At the time he won, several women had already complained to senior staff about his harassment, according to the timeline of testimony received by the tribunal.

“Staff were extremely disappointed by the bank’s initial handling of the case, in light of the spotlight that has been placed on sexual harassment in recent years and the bank’s stated commitment to address the issue seriously,” the Staff Association said in a review of the case in September. The union declined to comment further.

Four months after Mr. Chaves left the bank to become Costa Rica’s finance minister, the World Bank approved a $157 million loan to help the finance ministry improve Costa Rica’s tax collection and customs operations.

Disappointed with the outcome of the 2017-2019 investigation, the two employees who made the original complaint filed an appeal to the bank’s internal labor tribunal. They asked not for monetary compensation but for an explicit recognition that Mr. Chaves engaged in sexual harassment and that he receive a more severe sanction, according to the tribunal’s document. They asked that the employees themselves should receive some protection. As Costa Rica’s finance minister, he continued to have professional ties to both the World Bank and IMF.

Senior management opposed the appeal, according to the tribunal’s later report, saying the women had no standing to take their case to the tribunal.

The Staff Association, however, backed the women’s appeal, and helped them with legal fees and costs, which amounted to almost $65,000, according to the document.

“It’s distressing that victims seeking justice for sexual harassment should have to endure more than two years of investigation and litigation, and the active opposition of the bank after already having endured sexual harassment within the bank’s walls,” the Staff Association said in its case review.

The bank declined to comment on the Staff Association’s remarks, citing the need to treat personnel issues confidentially.

The tribunal decided to take the case, resulting in the June ruling.

The employees who made the complaints haven’t been publicly identified. One of them still works at the World Bank, the other at the IMF, the tribunal’s report said.

“Our case has been very painful and long, but we are confident that it was for a good cause,” the two victims said.

“We have seen the Bank’s position change since the initial decision, by acknowledging that the behavior constituted sexual harassment and stepping up to protect us in our specific case and currently working on new initiatives to tackle sexual harassment,” they said.

A part of the bank’s handling of the accusations took place during the tenure of former Chief Executive Kristalina Georgieva, current head of the IMF. Through a spokeswoman, Ms. Georgieva said she was unaware of the case. The bank’s human-resources department reports directly to the president’s office, not to the chief executive.

In addition to its apology, the bank issued a “no rehire” flag and restricted access of Mr. Chaves to the World Bank and informed the IMF security team of those restrictions. The tribunal also ordered the bank to cover the women’s legal fees and costs.

Mr. Chaves was recently nominated by Costa Rica’s center-left Democratic Social Progress party as its presidential candidate. Polls show he is expected to get less than 5% of the vote in the February elections.

Write to Santiago Pérez at [email protected]