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Sydney Morning Herald
2 days ago
- Business
- Sydney Morning Herald
The astonishing fall from grace of an 87-year-old economic kingpin
'He wasn't perfect, but he has been stitched up because he wouldn't go when people wanted him to go,' one person close to the organisation told The Telegraph. Other insiders fear that the push to remove Schwab will come at too high a reputational cost to the WEF itself. 'They've used a sledgehammer to crack a nut,' one said. It is an astonishing fall from grace from the former executive chairman, who was awarded an honorary knighthood by the UK in 2006. The German-born professor built his empire from humble beginnings, establishing the WEF in 1971 as a forum for policymakers and CEOs to discuss global issues. Over the years it mutated into a magnet for world leaders, a capital of fevered dealmaking, a byword for elitism and a lightning rod for conspiracy theories. The title of his book The Great Reset – about how the pandemic could remake global economies – has become shorthand for online extremists convinced that plots to create a world government are hatched at Davos. Schwab, the quintessential 'Davos Man,' was front and centre every year as he welcomed a galaxy of heads of state and government. They included prime ministers and presidents as different as Angela Merkel and Donald Trump, Emmanuel Macron and Narendra Modi or Baroness May and Vladimir Putin. At this year's gathering, in January, there was no Sir Keir Starmer, French president or German chancellor in Davos. The demise of Davos has often been predicted, but rivals are circling. China has the Boao Forum, colloquially known as 'the Asian Davos', and Saudi Arabia has launched the Future Investment Initiative, which is dubbed 'Davos in the Desert'. Loading The rumblings of what would become an avalanche of revelations about Schwab began with a 2024 investigation by the Wall Street Journal, which accused the WEF of having a workplace culture that was hostile to black people and women. Women were allegedly sidelined after becoming pregnant, while two staff members used the n-word, according to the Journal. The WEF said at the time it had zero tolerance for discrimination and harassment and disputed the allegations in the newspaper report. Staff alleged that Schwab was inappropriate and made unwanted suggestive remarks, while one female staffer claimed he put his leg on her desk with his crotch in front of her face. She said Schwab told her he wished she was Hawaiian because he'd like to see her in Hawaiian costume, which the WEF fiercely denied. Others told the Wall Street Journal that attractive women were chosen to meet international delegates. There was a slang term for such encounters – 'white on blue action' – a reference to the different coloured lanyards worn at the conference by officials and famous guests. Former staff at the non-profit were reported to have set up a WhatsApp group called 'WEFugees' in which they shared horror stories about their experiences. A former staffer told the Journal: 'We promote inclusion and improving the state of the world and women's issues but do the opposite.' Schwab complained bitterly about the Journal 's reporting but was determined to craft a graceful, prolonged exit from the WEF, which generates about $US00 million a year. The WEF's founding bylaws state 'the Founder himself designates his successor', and stipulates he or 'at least one member of his immediate family' is on the board of trustees. Schwab's plan was to move to a role as non-executive chairman and retire in stages, picking his successor. But then whistleblowers sent a letter in an email to WEF trustees, including luminaries such Al Gore, the former US vice-president, and cellist Yo Yo Maa. It accused Schwab and his wife, Hilde, of misusing WEF funds. It said Schwab had used company funds to pay for private massages, and he had redirected WEF resources and staff in a vainglorious bid to get nominated for the Nobel Peace Prize. 'This was not a WEF initiative, but a self-driven effort disguised as organisational work,' the letter said. It complained about Hilde Schwab's spending of about $USUS50 million on Villa Mundi, a mansion next to WEF headquarters overlooking Lake Geneva. It alleged she controlled access to the property and that one entire floor was reserved for the couple's exclusive use, according to the Wall Street Journal. They denied the allegations. In April this year, a WEF audit committee recommended opening an independent investigation into the new allegations. Schwab went on the attack. He wrote a furious email to the committee demanding the probe be dropped within 24 hours and threatened to file a criminal complaint. The gamble backfired. After the WEF board insisted the investigation had to go ahead, Schwab resigned 48 hours after sending his email. He insisted his legacy was 'well established', adding he had received 'the highest national distinction from numerous countries for my efforts in helping economic developments, reconciliation efforts and even avoiding a war'. After a two-hour emergency meeting of trustees, Schwab's ouster was announced on April 21. He was swiftly replaced by Peter Brabeck-Letmathe, the WEF's vice-chairman and former Nestle CEO. A law-firm led independent investigation began in accordance with Swiss regulations. Last Sunday, some preliminary findings were published in Switzerland's SonntagsZeitung newspaper. Law firm Homburger has looked into some £836,000 in expenses submitted by Schwab and his wife which, it was reported, were not sufficiently linked to WEF activities. Schwab sent suggestive emails and had 'embarrassing interactions' with younger WEF staff, according to the leaked findings. The newspaper revealed he had told staff that the UK 'must not see any improvement' in the WEF's annual Global Competitiveness Report, which ranks countries on productivity. Otherwise it would be 'exploited by the Brexit camp', he wrote. In the 2017/2018 report, the UK's ranking improved from seventh to fourth after a change in methodology. Loading The final report published in 2017 – a year after the Brexit referendum – showed the UK had dropped one place to eighth. It was not the only example of political manipulation of research, according to the newspaper. Schwab has denied all the allegations.
The Age
2 days ago
- Business
- The Age
The astonishing fall from grace of an 87-year-old economic kingpin
'He wasn't perfect, but he has been stitched up because he wouldn't go when people wanted him to go,' one person close to the organisation told The Telegraph. Other insiders fear that the push to remove Schwab will come at too high a reputational cost to the WEF itself. 'They've used a sledgehammer to crack a nut,' one said. It is an astonishing fall from grace from the former executive chairman, who was awarded an honorary knighthood by the UK in 2006. The German-born professor built his empire from humble beginnings, establishing the WEF in 1971 as a forum for policymakers and CEOs to discuss global issues. Over the years it mutated into a magnet for world leaders, a capital of fevered dealmaking, a byword for elitism and a lightning rod for conspiracy theories. The title of his book The Great Reset – about how the pandemic could remake global economies – has become shorthand for online extremists convinced that plots to create a world government are hatched at Davos. Schwab, the quintessential 'Davos Man,' was front and centre every year as he welcomed a galaxy of heads of state and government. They included prime ministers and presidents as different as Angela Merkel and Donald Trump, Emmanuel Macron and Narendra Modi or Baroness May and Vladimir Putin. At this year's gathering, in January, there was no Sir Keir Starmer, French president or German chancellor in Davos. The demise of Davos has often been predicted, but rivals are circling. China has the Boao Forum, colloquially known as 'the Asian Davos', and Saudi Arabia has launched the Future Investment Initiative, which is dubbed 'Davos in the Desert'. Loading The rumblings of what would become an avalanche of revelations about Schwab began with a 2024 investigation by the Wall Street Journal, which accused the WEF of having a workplace culture that was hostile to black people and women. Women were allegedly sidelined after becoming pregnant, while two staff members used the n-word, according to the Journal. The WEF said at the time it had zero tolerance for discrimination and harassment and disputed the allegations in the newspaper report. Staff alleged that Schwab was inappropriate and made unwanted suggestive remarks, while one female staffer claimed he put his leg on her desk with his crotch in front of her face. She said Schwab told her he wished she was Hawaiian because he'd like to see her in Hawaiian costume, which the WEF fiercely denied. Others told the Wall Street Journal that attractive women were chosen to meet international delegates. There was a slang term for such encounters – 'white on blue action' – a reference to the different coloured lanyards worn at the conference by officials and famous guests. Former staff at the non-profit were reported to have set up a WhatsApp group called 'WEFugees' in which they shared horror stories about their experiences. A former staffer told the Journal: 'We promote inclusion and improving the state of the world and women's issues but do the opposite.' Schwab complained bitterly about the Journal 's reporting but was determined to craft a graceful, prolonged exit from the WEF, which generates about $US00 million a year. The WEF's founding bylaws state 'the Founder himself designates his successor', and stipulates he or 'at least one member of his immediate family' is on the board of trustees. Schwab's plan was to move to a role as non-executive chairman and retire in stages, picking his successor. But then whistleblowers sent a letter in an email to WEF trustees, including luminaries such Al Gore, the former US vice-president, and cellist Yo Yo Maa. It accused Schwab and his wife, Hilde, of misusing WEF funds. It said Schwab had used company funds to pay for private massages, and he had redirected WEF resources and staff in a vainglorious bid to get nominated for the Nobel Peace Prize. 'This was not a WEF initiative, but a self-driven effort disguised as organisational work,' the letter said. It complained about Hilde Schwab's spending of about $USUS50 million on Villa Mundi, a mansion next to WEF headquarters overlooking Lake Geneva. It alleged she controlled access to the property and that one entire floor was reserved for the couple's exclusive use, according to the Wall Street Journal. They denied the allegations. In April this year, a WEF audit committee recommended opening an independent investigation into the new allegations. Schwab went on the attack. He wrote a furious email to the committee demanding the probe be dropped within 24 hours and threatened to file a criminal complaint. The gamble backfired. After the WEF board insisted the investigation had to go ahead, Schwab resigned 48 hours after sending his email. He insisted his legacy was 'well established', adding he had received 'the highest national distinction from numerous countries for my efforts in helping economic developments, reconciliation efforts and even avoiding a war'. After a two-hour emergency meeting of trustees, Schwab's ouster was announced on April 21. He was swiftly replaced by Peter Brabeck-Letmathe, the WEF's vice-chairman and former Nestle CEO. A law-firm led independent investigation began in accordance with Swiss regulations. Last Sunday, some preliminary findings were published in Switzerland's SonntagsZeitung newspaper. Law firm Homburger has looked into some £836,000 in expenses submitted by Schwab and his wife which, it was reported, were not sufficiently linked to WEF activities. Schwab sent suggestive emails and had 'embarrassing interactions' with younger WEF staff, according to the leaked findings. The newspaper revealed he had told staff that the UK 'must not see any improvement' in the WEF's annual Global Competitiveness Report, which ranks countries on productivity. Otherwise it would be 'exploited by the Brexit camp', he wrote. In the 2017/2018 report, the UK's ranking improved from seventh to fourth after a change in methodology. Loading The final report published in 2017 – a year after the Brexit referendum – showed the UK had dropped one place to eighth. It was not the only example of political manipulation of research, according to the newspaper. Schwab has denied all the allegations.
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First Post
2 days ago
- Business
- First Post
Trump, EU chief meet in Scotland to avert transatlantic trade war
US President Trump and EU chief Ursula von der Leyen met Sunday in Scotland in a last-ditch effort to resolve a transatlantic trade dispute. With a 30% tariff threat looming and key sectors like autos and pharmaceuticals at stake, the two leaders are racing against an August 1 deadline to secure a deal that could redefine the $1.9 trillion US-EU trade relationship read more US President Trump with European Commission President Ursula von der Leyen during the 50th World Economic Forum (WEF) annual meeting in Davos, Switzerland, January 21, 2020. File image/ Reuters US President Donald Trump and EU chief Ursula von der Leyen planned to meet in Scotland on Sunday in an effort to resolve a months-long transatlantic trade dispute that is nearing its end. Trump, who has threatened to impose punitive tariffs on dozens of nations unless they reach an agreement with Washington by August 1, has stated that he believes there is a 50/50 possibility of striking an agreement with the European Union. STORY CONTINUES BELOW THIS AD An all-encompassing charge of 30 percent from that date is presently threatening the EU. Negotiating on behalf of the EU's member nations, von der Leyen's European Commission has been putting a lot of effort into reaching an agreement to preserve a trade relationship that generates $1.9 trillion in products and services annually. Any deal with the United States will need approval by all 27 member states. EU ambassadors, on a visit to Greenland, were to meet Sunday morning to discuss the latest negotiations – and again after any accord. Sunday's sit-down between Trump and the EU chief was to take place at 4:30 pm (1530 GMT) in Turnberry, on Scotland's southwestern coast, where Trump owns a luxury golf resort. The 79-year-old American leader said Friday he hoped to strike 'the biggest deal of them all' with the EU. 'I think we have a good 50-50 chance' of a deal, the president said, citing sticking points on 'maybe 20 different things'. He praised von der Leyen as 'a highly respected woman' – a far cry from his erstwhile hostility in accusing the EU of existing to 'screw' the United States. But late-night EU talks with US Commerce Secretary Howard Lutnick on Saturday to hammer out the final details were 'combative at times,' The Financial Times reported. STORY CONTINUES BELOW THIS AD As of Saturday evening, there were 'still quite a few open questions' – notably on pharmaceutical sector tariffs, said one EU diplomat. Tariff levels on the auto sector were also crucial for the Europeans – notably France and Germany – and the EU has been pushing for a compromise on steel that could allow a certain quota into the United States before tariffs would apply. Baseline 15 percent According to European diplomats, the deal on the table involves a baseline levy of around 15 percent on EU exports to the United States – the level secured by Japan – with carve-outs for critical sectors including aircraft, lumber and spirits excluding wine. The EU would commit to ramp up purchases of US liquefied natural gas, along with a series of investment pledges. Hit by multiple waves of tariffs since Trump reclaimed the White House, the EU is currently subject to a 25-percent levy on cars, 50 percent on steel and aluminium, and an across-the-board tariff of 10 percent, which Washington threatens to hike to 30 percent in a no-deal scenario. STORY CONTINUES BELOW THIS AD The EU has focused on getting a deal with Washington to avoid sweeping tariffs that would further harm its sluggish economy, with retaliation as a last resort. While 15 percent would be much higher than pre-existing US tariffs on European goods – at 4.8 percent – it would mirror the status quo, with companies already facing an additional flat rate of 10 percent. Should talks fail, EU states have greenlit counter tariffs on $109 billion (93 billion euros) of US goods including aircraft and cars to take effect in stages from August 7. Brussels is also drawing up a list of US services to potentially target. Beyond that, countries like France say Brussels should not be afraid to deploy a so-called trade 'bazooka' – EU legislation designed to counter coercion through trade measures which involves restricting access to its market and public contracts. But such a step would mark a major escalation with Washington. Ratings dropping STORY CONTINUES BELOW THIS AD Trump has embarked since returning to power on a campaign to reshape US trade with the world. But polls suggest the American public is unconvinced, with a recent Gallup survey showing his approval rating at 37 percent – down 10 points from January. Having promised '90 deals in 90 days,' Trump's administration has so far unveiled five, including with Britain, Japan and the Philippines. Early Sunday, ahead of his meeting with Von der Leyen, Trump was out again on the golf course, having spent most of Saturday playing at Turnberry amid tight security. The trip to Scotland has put physical distance between Trump and the scandal around Jeffrey Epstein, the wealthy financier accused of sex trafficking who died in prison in 2019 before facing trial. In his heyday, Epstein was friends with Trump and others in the New York jet-set, but the president is facing backlash from his own MAGA supporters demanding access to the Epstein case files. STORY CONTINUES BELOW THIS AD With the uproar refusing to die down, a headline agreement with the EU – in addition to bolstering Trump's dealmaker credentials – could bring a welcome distraction.
Telegraph
4 days ago
- Business
- Telegraph
The dizzying fall of the King of Davos
Klaus Schwab was the undisputed 'King of Davos' for 55 years. But when his downfall came, it was swift. The 87-year-old founder of the World Economic Forum (WEF), which holds the annual conference in the Swiss alpine ski resort, fought until the end. But over two days in April, beset by allegations of misusing WEF funds, manipulating research and inappropriate behaviour with staff, he was forced out of his personal fiefdom. 'He had the chance to step back 10, seven, five years ago. But he hung on,' one WEF insider told The Telegraph. On Sunday, the early findings of a second investigation into the WEF were leaked. They alleged Mr Schwab had misspent WEF money and manipulated research for political reasons, including rigging data to make Brexit look like a failure. Mr Schwab also allegedly put his crotch in front of a female staffer's face, splurged $50m on a luxury villa, and ran up £836,000 in expenses that were not sufficiently linked to WEF activities. His credibility now lies in ruins and the future of Davos is openly questioned. Some see the investigation in response to a whistleblower complaint as a barely disguised attempt to push Mr Schwab out. For his part, he denies any wrongdoing. 'He wasn't perfect, but he has been stitched up because he wouldn't go when people wanted him to go,' one person close to the organisation told The Telegraph. Other insiders fear that the push to remove Mr Schwab will come at too high a reputational cost to the WEF itself. 'They've used a sledgehammer to crack a nut,' one said. It is an astonishing fall from grace from the former executive chairman, who was awarded an honorary knighthood by the UK in 2006. The German-born professor built his empire from humble beginnings, establishing the WEF in 1971 as a forum for policymakers and CEOs to discuss global issues. Over the years it mutated into a magnet for world leaders, a capital of fevered dealmaking, a byword for elitism and a lightning rod for conspiracy theories. The title of his book 'The Great Reset' – about how the pandemic could remake global economies – has become shorthand for online extremists convinced that plots to create a world government are hatched at Davos. Mr Schwab, the quintessential 'Davos Man,' was front and centre every year as he welcomed a galaxy of heads of state and government. They included prime ministers and presidents as different as Angela Merkel and Donald Trump, Emmanuel Macron and Narendra Modi or Baroness May and Vladimir Putin. At this year's gathering, in January, there was no Sir Keir Starmer, French president or German chancellor in Davos. The demise of Davos has often been predicted, but rivals are circling. China has the Boao Forum, colloquially known as 'the Asian Davos', and Saudi Arabia has launched the Future Investment Initiative, which is dubbed 'Davos in the Desert'. The rumblings of what would become an avalanche of revelations about Mr Schwab began with a 2024 investigation by the Wall Street Journal, which accused the WEF of having a workplace culture that was hostile to black people and women. Women were allegedly sidelined after becoming pregnant, while two staff members used the n-word, according to the Journal. The WEF said at the time it had zero tolerance for discrimination and harassment and disputed the allegations in the newspaper report. Staff alleged that Mr Schwab was inappropriate and made unwanted suggestive remarks, while one female staffer claimed he put his leg on her desk with his crotch in front of her face. She said Mr Schwab told her he wished she was Hawaiian because he'd like to see her in Hawaiian costume, which the WEF fiercely denied. Others told the Wall Street Journal that attractive women were chosen to meet international delegates. There was a slang term for such encounters – 'white on blue action' – a reference to the different coloured lanyards worn at the conference by officials and famous guests. Former staff at the non-profit were reported to have set up a WhatsApp group called 'WEFugees' in which they shared horror stories about their experiences. A former staffer told the Journal: 'We promote inclusion and improving the state of the world and women's issues but do the opposite.' Mr Schwab complained bitterly about the Journal's reporting but was determined to craft a graceful, prolonged exit from the WEF, which generates about $500m a year. The WEF's founding bylaws state 'the Founder himself designates his successor', and stipulates he or 'at least one member of his immediate family' is on the board of trustees. Mr Schwab's plan was to move to a role as non-executive chairman and retire in stages, picking his successor. But then whistleblowers sent a letter in an email to WEF trustees, including luminaries such Al Gore, the former US vice-president, and cellist Yo Yo Maa. It accused Mr Schwab and his wife, Hilde, of misusing WEF funds. It said Mr Schwab had used company funds to pay for private massages, and he had redirected WEF resources and staff in a vainglorious bid to get nominated for the Nobel Peace Prize. 'This was not a WEF initiative, but a self-driven effort disguised as organisational work,' the letter said. It complained about Hilde Schwab's spending of about $50m on Villa Mundi, a mansion next to WEF headquarters overlooking Lake Geneva. It alleged she controlled access to the property and that one entire floor was reserved for the couple's exclusive use, according to the Wall Street Journal. They denied the allegations. In April this year, a WEF audit committee recommended opening an independent investigation into the new allegations. Mr Schwab went on the attack. He wrote a furious email to the committee demanding the probe be dropped within 24 hours and threatened to file a criminal complaint. The gamble backfired. After the WEF board insisted the investigation had to go ahead, Mr Schwab resigned 48 hours after sending his email. He insisted his legacy was 'well established', adding he had received 'the highest national distinction from numerous countries for my efforts in helping economic developments, reconciliation efforts and even avoiding a war'. After a two-hour emergency meeting of trustees, Mr Schwab's ouster was announced on April 21. He was swiftly replaced by Peter Brabeck-Letmathe, the WEF's vice-chairman and former Nestle CEO. A law-firm led independent investigation began in accordance with Swiss regulations. Last Sunday, some preliminary findings were published in Switzerland's SonntagsZeitung newspaper. Law firm Homburger has looked into some £836,000 in expenses submitted by Mr Schwab and his wife which, it was reported, were not sufficiently linked to WEF activities. Mr Schwab sent suggestive emails and had 'embarrassing interactions' with younger WEF staff, according to the leaked findings. The newspaper revealed he had told staff that the UK 'must not see any improvement' in the WEF's annual Global Competitiveness Report, which ranks countries on productivity. Otherwise it would be 'exploited by the Brexit camp', he wrote. In the 2017/2018 report, the UK's ranking improved from seventh to fourth after a change in methodology. The final report published in 2017 – a year after the Brexit referendum – showed the UK had dropped one place to eighth. It was not the only example of political manipulation of research, according to the newspaper. Mr Schwab has denied all the allegations. The once all powerful king of the globalists was reduced to a chuntering complaint from the ruins of his empire. He accused the WEF board of breaking a media silence pact over the investigation, but now faces a nervous wait until the official end of the probe later this year. 'I feel deceived,' he huffed on Sunday. 'I am not available for further investigations.'
Straits Times
4 days ago
- Business
- Straits Times
EU's von der Leyen says will meet Trump on Sunday to discuss trade
FILE PHOTO: U.S. President Donald Trump attends a bilateral meeting with European Commission President Ursula von der Leyen during the 50th World Economic Forum (WEF) annual meeting in Davos, Switzerland, January 21, 2020. REUTERS/Jonathan Ernst//File Photo BRUSSELS - EU Commission President Ursula von der Leyen on Friday said she will meet U.S. President Donald Trump in Scotland on Sunday to discuss trade relations between the European Union and the United States. "Following a good call with @POTUS, we have agreed to meet in Scotland on Sunday to discuss transatlantic trade relations, and how we can keep them strong," von der Leyen said in a post on X. Trump on Friday said there was a 50-50 chance or perhaps less that the United States would reach a trade agreement with the European Union, saying Brussels wanted to "make a deal very badly". The European Commission on Thursday said a negotiated trade solution with the United States was within reach, even as EU members voted to approve counter-tariffs on 93 billion euros ($109.01 billion) of U.S. goods in case the talks collapse. REUTERS
