Klaus Schwab found guilty of financial irregularities, bullying, and inappropriate workplace behavior

Klaus Schwab, the 87-year-old founder of the World Economic Forum (WEF), is guilty of a decade-long workplace misconduct practice, according to preliminary findings of an internal investigation shared in a Wednesday exclusive by the Wall Street Journal. The probe was commissioned by the Forum’s board of trustees in April this year after a whistleblower sent a complaint to the board. As reported by WSJ, investigators have said Schwab had engaged in inappropriate workplace behavior, financial irregularities, and abuse of power together with his wife, Hilde. Schwab misconduct discovered from investigations In April, an anonymous whistleblower letter shared with the Wall Street Journal alleged that Schwab misused Forum funds and mistreated employees. This prompted Swiss law firm Homburger, based in Zurich, to interview more than 50 current and former employees. Preliminary findings have revealed that Schwab treated the WEF as his personal domain, allowing several instances of harassment and discrimination under his leadership. One instance showed Schwab sent a late-night email to a senior female executive in June 2020, writing, “Do you feel that I am thinking of you?” which Homburger coined inappropriate. The former WEF executive chairman’s spokesman stated the email contradicts his character and insisted he had always treated women respectfully. He also said Schwab saw the Forum as his “family,” where he acted as a father figure to younger employees. In 2023, a Wall Street Journal report detailed the forum as a toxic environment for women and Black employees. The new findings appear to corroborate those very claims. The current investigation’s final report, expected by the end of August, will be submitted to Swiss nonprofit regulators and forwarded to prosecutors, who could possibly charge Schwab in court. Fallout forced Schwab to resign from executive chair seat Schwab stepped down as chairman of the WEF over the Easter weekend and no longer holds any role within the organization. After stepping down, the forum confirmed that the whistleblower letter existed and that a formal internal investigation was underway. Although WEF noted at the time that the allegations were unproven, findings since then have provided evidence supporting the complaint’s claims. The investigation’s preliminary results were shared with some Forum trustees and discussed directly with Schwab during a five-hour meeting. The latter is still denying the accusations and has lambasted the board for breaching an agreement to refrain from public comment. He has also participated in the inquiry and reviewed a draft version of the report, promising to defend himself vigorously, through legal channels, and has filed a criminal complaint in Switzerland for defamation and coercion against the anonymous whistleblowers. Financial misconduct and lavish spending Investigators found that Schwab and his wife filed over $1.1 million in questionable travel expenses. This included frequent first-class flights for Hilde Schwab to accompany her husband on WEF-related trips, despite holding no formal role in the organization. They also mentioned $63,000 was spent on trips to Venice, Miami, the Seychelles, and Morocco, with little evidence of business involvement. The Schwabs are also accused of using Forum funds for personal indulgences, such as 14 hotel massages, half of which Schwab later reimbursed, and expensive gifts including Russian tea sets, personalized Tiffany cufflinks, and fur coats. Schwab said he typically asked assistants to bill him personally for such expenses and claimed that many gifts were donated to charity or displayed at WEF headquarters. More controversially, investigators revealed that the Schwabs directed lavish spending on the renovation of a Forum-owned property, Villa Mundi, near Lake Geneva. The design firm hired for the refurbishment was the same one previously employed for the Schwabs’ personal projects. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now