Former World Economic Forum director Klaus Schwab is under investigation by the organization he created after a whistleblower came forward with allegations of financial misconduct committed by Schwab and his wife, according to a new letter obtained by the Wall Street Journal.

The anonymous letter was sent last week to the organization’s board and raised concerns about the WEF’s governance and workplace culture, including allegations that the Schwab family blended their personal affairs with the forum’s financial resources without proper oversight, the whistleblower alleged. A second source familiar with the matter confirmed the existence of the investigation in a statement to the Wall Street Journal.

According to the letter, Schwab allegedly asked junior employees to withdraw thousands of dollars from ATMs on his behalf. He also allegedly used WEF funds to pay for “private, in-room” massages at hotels, according to the whistleblower.

In addition, the letter alleged that Schwab’s wife, Hilde, who previously worked for the forum, scheduled “token” WEF-funded meetings in order to justify luxurious holiday travel expenses using organization funds.

Klaus Schwab, Founder and Executive Chairman, World Economic Forum at Global Shapers Annual Summit of the World Economic Forum in Geneva, 30 August – 1 September 2019 Geneva
Photo: World Economic Forum/Pascal Bitz

In recent days, Schwab had argued against an investigation, telling board members that he denied the unsubstantiated allegations and that he would challenge them in a lawsuit, sources familiar with the matter told The Journal. His efforts were unsuccessful, however, as the board decided in favor of opening a probe following an emergency meeting over the Easter holiday weekend.

Schwab opted to resign immediately as chairman rather than stay on while the investigation plays out.

In a statement released through a spokesperson, the Schwab denied all allegations levied against them by the unnamed whistleblower. The former chairman is also expected to be filing a lawsuit against whoever is behind the anonymous letter and “anybody who spreads these mistruths,” the spokesman said.

In a statement, the Forum said its board unanimously supported the decision to initiate an independent investigation “following a whistleblower letter containing allegations against former Chairman Klaus Schwab. This decision was made after consultation with external legal counsel.”

The Forum said it takes “these allegations seriously, but they remain unproven, and will await the outcome of the investigation to comment further.”