Klaus Schwab: from global guru to accused of embezzlement and harassment

The fall of Klaus Schwab is spectacular. The founder of the World Economic Forum, at 87 years old, faces devastating accusations: systematic inappropriate conduct, financial irregularities, and abuse of power over a decade, according to an internal investigation that came to light in the Wall Street Journal.

The juicy part of the scandal

It all started in April when an anonymous whistleblower accused Schwab of embezzling funds and mistreating employees. The Swiss firm Homburger got to work, interviewing more than 50 current and former employees. The preliminary results are brutal:

Personally: An email from 2020 that Schwab sent to a senior executive asking “Do you feel that I'm thinking of you?” in the middle of the night. His defense: it was just a paternal figure. Sure.

In financial matters: $1.1 million in questionable travel expenses. His wife Hilde flew first class to WEF events without having even an official title. Then there are the $63,000 on vacations to Venice, Miami, and the Seychelles ( with little evidence that it was “work”). And the minor details: 14 massages at hotels, personalized Tiffany cufflinks, fur coats, Russian tea sets.

The cherry: The Schwabs used funds from the Forum to renovate Villa Mundi, a property by Lake Geneva. They hired the same design firm that had worked on their personal projects. Coincidence?

The consequences

Schwab resigned as president of the WEF at Easter. The final report will arrive by the end of August to the Swiss prosecutors, who could file criminal charges. Schwab denies everything and counters: he accuses the board of violating confidentiality agreements and has filed a criminal complaint for defamation against the anonymous whistleblowers.

This situation corroborates a 2023 WSJ report that described the WEF as a toxic environment for women and black employees. It seems that the environment was not a problem for the employees.