Asian infrastructure bank can’t be reformed unless China changes course, former executive says

A former senior executive of the Asian Infrastructure Investment Bank (AIIB) told a House of Commons committee Monday he doesn’t believe the international financial institution can be reformed as long as China remains on its current geopolitical course.

Bob Pickard, the bank’s former top communications director, resigned in protest from the bank last June after alleging the bank was being controlled by Beijing. Testifying before the Canada-China relations committee Monday, he outlined in detail his fear that the Communist government is pulling the bank’s strings.

Canada has frozen its participation in the multilateral organization indefinitely. Pickard, a Canadian citizen, said he doubts it can be rehabilitated under the current circumstances.

“I would say that so long as we have the current geopolitical situation, and so long as we have the Chinese Communist Party trying to work to undermine Western democracies … trying to replace the United States as the number one power, it is impossible for that to happen,” he said.

Pickard’s remarks are significant given that Finance Minister Chrystia Freeland announced last Friday that Canada’s review of its participation in the bank would be expanded.

Pickard also told MPs he was troubled by the fact that Canadian officials conducting the assessment had not reached out to him with more questions about his allegations — claims which the bank, in an internal report, dismissed as a “despicable pack of lies.”

The former executive suggested that an investigation carried out by the Chinese-led institution was more a public relations exercise and that he was denied access to his own internal documents when trying to defend himself.

The AIIB was launched in 2016 and is considered a major initiative of Chinese President Xi Jinping, who wants to see a counterweight to the western dominated World Bank and the International Monetary Fund. There are 106 global members of the AIIB, including Australia, Canada, France and Germany.

In announcing the expanded review, Freeland said in a media statement that Canada will conduct an analysis of AIIB investments, its governance and management framework.

Pickard told the committee how the bank’s president throughout his short tenure became increasingly isolated and appeared to be taking advice from an official whom he claimed had no job description — “except that he was supposed to be the new party guy,” a liaison with the government.

“The key point is that the AIIB president’s office is unusually powerful, even in the context of a multilateral organization,” he testified.

“It’s extremely top-down and that office is a cocoon physically cut off. And it is dominated by senior Communist Party members.”

He described what he called a “heel-clicking obedience” to the directives coming out of the president’s office that is “valued more highly than any other virtue at the bank.”

Pickard went on to claim that all of the information going up to AIIB president Jin Liqun was filtered through to CCP officials whose offices were in the closest physical proximity to Jin inside the bank’s headquarters in Beijing.

Pickard told MPs he attempted to resign once before his eventual departure and raised his concerns about undue influence with Jin. His resignation wasn’t accepted initially, he said, but within days the bank’s ombudsman launched an investigation into Pickard’s department.

Liberal MP Peter Fragisketos asked whether Pickard had any evidence in the form of documentation to back up his allegations.

“I am an eyewitness. I have opinions. I saw certain things,” Pickard said.

“People keep asking me, ‘Where are the documents?’ Well, if I take those documents from the bank, I’d either be in a Chinese jail right now or I’d be under serious litigation.”

Steven Kuhn, a senior official in the international trade and finance branch of the Department of Finance, said the federal government launched its review of the bank immediately upon hearing the allegations and the first conversation with the former senior executive happened within a week.

“We gave Mr. Pickard as much time as he required to provide his part of the story in oral testimony and invited him to continue to engage with us as he was able to provide more information. And he did so with a number of emails,” Kuhn said.

Much of the subsequent time has been spent trying to “corroborate the seriousness of the allegations that he has been making, and to find a way forward as part of our ongoing review,” he said.

In terms of the expansion of the review, Kuhn said Canada had “identified some weaknesses and some areas for further engagement with respect to the governance of the institution.”

He did not elaborate further.