Klaus Schwab Found Guilty of 1.1M in Misused Funds, Harassment After Whistleblower Probe

Klaus Schwab, 87, the founder of the World Economic Forum (WEF), has been found guilty of financial irregularities, bullying, and inappropriate workplace behavior following a preliminary investigation by a Swiss law firm, Homburger. The findings, shared exclusively with the Wall Street Journal (WSJ), reveal a decade-long pattern of misconduct involving Schwab and his wife, Hilde, including misuse of WEF funds and harassment of employees [1]. The investigation was triggered by a whistleblower complaint in April 2024, prompting the WEF board to commission Homburger to interview over 50 current and former employees.

Preliminary results indicate Schwab treated the WEF as a personal domain, with instances of discrimination and harassment under his leadership. A notable example is a 2020 email he sent to a senior female executive, asking, “Do you feel that I am thinking of you?” which Homburger deemed inappropriate. Schwab’s spokesperson has denied the allegations, stating the email contradicts his character and emphasizing his “father figure” role toward employees. However, the WSJ notes these findings corroborate earlier reports from 2023 highlighting a toxic work environment for women and Black employees at the WEF [1].

Financial misconduct uncovered includes over $1.1 million in questionable travel expenses, including first-class flights for Hilde Schwab, who holds no formal role at the WEF. Investigators also identified $63,000 in expenses for trips to Venice, Miami, the Seychelles, and Morocco with minimal business justification. Additional lavish spending included 14 hotel massages and expensive gifts such as Russian tea sets and fur coats. Schwab defended these expenses, claiming most gifts were donated or displayed at WEF headquarters, and that he personally reimbursed half the cost of massages [1].

The investigation also highlighted $2.5 million in renovations at Villa Mundi, a WEF-owned property near Lake Geneva, contracted to a firm previously used by the Schwabs for personal projects. This has raised questions about conflicts of interest. Schwab, who resigned as WEF executive chair in April 2024, has denied all allegations and criticized the board for breaching a confidentiality agreement. He is now pursuing legal action against the whistleblowers, accusing them of defamation and coercion [1].

The final investigation report, due by late August, will be submitted to Swiss nonprofit regulators and prosecutors, who may pursue criminal charges. Schwab’s resignation has left the WEF in a transitional phase, with the organization acknowledging the validity of the whistleblower’s claims since the investigation’s findings emerged. The scandal underscores governance challenges in high-profile institutions and raises broader questions about accountability in organizations led by prominent figures.

Source: [1] [title: Klaus Schwab found guilty of financial irregularities, bullying, and inappropriate workplace behavior] [url: https://coinmarketcap.com/community/articles/68810cd5cdcb657864402285/]