Jacques de Groote, World Bank and IMF executive whose career was overshadowed by allegations of fraud

In 1990 it was reported that he had taken advantage of his position in Washington to serve the interests of President Mobutu of Zaire

Jacques de Groote, who has died aged 97, played an influential role in the global economy as Belgium’s executive director to the International Monetary Fund from 1973 to 1994, and to the World Bank from 1975 to 1991.
Arriving in Washington not long before Harold Wilson’s government was forced to borrow from the IMF, he represented a group of countries with 5 per cent of its total votes (more than France, Britain, China or India).
At the Bank, de Groote led a group that grew to 10 countries; Belgium, the Czech Republic, Slovakia, Slovenia, Austria, Luxembourg, Turkey, Belarus, Hungary and Kazakhstan. He brought in Hungary while it was still under Communist rule, then assisted its transition to capitalism.
He was as proud of his role in shepherding the Belgian Congo to independence, having been asked at 32 by Patrice Lumumba to manage “for the Congolese side” the Brussels secretariat charged with readying its economy.
De Groote was seen in Washington and at home as enabling Belgium to punch above its weight on the international stage. Within the generally staid IMF, his lavish lifestyle, snappily tailored suits and bright yellow Volkswagen “Beetle” stood out.
But his final years there were overshadowed by accusations of murky dealings with the Congo (later Zaire, today the DRC), and formerly Belgian Rwanda, which may have prevented his reaching the very top.
Then, in 2013, a Swiss court convicted de Groote, along with five Czechs, of fraud in the privatisation of the second-largest Czech lignite mine. The only defendant to escape prison, he was given a suspended fine of £67,000; six years later, aged 92, he won an appeal, the court saying he had not properly assessed the people he worked with.
Jacques de Groote was born on May 25 1927. He read law, economics and political science at the University of Leuven, then in 1955 took an MA at Cambridge. From 1957 to 1960 and 1963 to 1965 he was an assistant professor at Lille Catholic University, then he held a chair at the University of Namur until 1992, lecturing on credit theories, monetary mechanisms and international finance issues.
In parallel, he joined Belgium’s civil service, and at the start of 1960 was appointed to the panel preparing for that June’s handover of the Congo. Months later, he had his first posting to Washington as an assistant to Belgium’s representative at the IMF and World Bank.
In 1963 De Groote moved to the National Bank of Belgium, then in 1966 was appointed economic adviser in Kinshasa to President Mobutu and the Congo’s National Bank, with oversight of the mining giant Union Minière (later Gécamines). In 1969 he returned to Belgium’s central bank as its head of research.
In 1973 he moved to Washington as Belgium’s executive director of the IMF and World Bank. By 1990 his power and prestige were considerable, but that December The Wall Street Journal published the results of a lengthy investigation into his involvement with Africa.
The paper reported that de Groote had systematically taken advantage of his position in Washington to serve Mobutu’s interests as he turned his government into a kleptocracy, suggesting that he could have sold secret information to subsidise his lifestyle.
De Groote had told the authorities in Zaire what an IMF mission was expecting of them before it visited the country in 1982; at stake was a $246 million loan. He had visited Mobutu in 1986 at his villa in the south of France, and written to Zaire’s prime minister and the president of Rwanda discussing IMF stabilisation plans that were being developed,
De Groote insisted that the IMF was well aware of the advice he had given these countries, and he had received no remuneration. He declared himself the victim of a campaign against the IMF and Mobutu.
He admitted that in the early 1980s Rwanda had asked him to represent it at the World Bank. He had helped to secure a devaluation of the Rwandan franc, which benefited Géomines and its owner Baron van den Branden. When the Journal reported that the Baron then encouraged a Belgian bank to give him a loan, de Groote responded: “It’s not my fault if I have a friend who has a mine in Rwanda. If I asked him to help me obtain this loan, it’s because I wanted to avoid asking the banks myself due to my very close relations with them.”
Leaving Washington, de Groote did not receive a high-level post in Belgium. Instead he began working with Stephen Norris, co-founder of America’s private-equity Carlyle Group, who in 1995 struck out to found the Swiss-based Appian Group. De Groote became Appian’s president; its advisers included the former US President George Bush Snr and Lawrence Eagleburger, briefly Bush’s Secretary of State.
Appian invested in companies being privatised in Central and Eastern Europe, particularly the Czech Republic, where it became a major player in 1998 after acquiring the lignite mine MUS in a hostile takeover from government.
In 2004 the Financial Times questioned how Appian had been able to “rise and rise” from obscure origins, querying its takeover methods and lobbying power. Appian said it had funded the acquisition of MUS from a US-registered parent, but the FT noted that this company later split acrimoniously, with one side claiming that it had merely licensed the use of its name to the Czech operation. The state privatisation agency claimed that MUS’s management had used its environmental reserve fund to secretly buy up shares and seize control.
MUS provided Appian with a stable cash flow and the ear of the incoming Social Democrat government, whose stronghold was the north Bohemian coalfield. Appian won a reputation as a good and charitable employer and a competent manager, and when the Social Democrats went on to privatise the almost insolvent Skoda engineering group (separate from the car maker), Appian was their choice.
De Groote left Appian in 2002. In the meantime, his relationship with Alain Abdourahman, a Swiss financier, had gone sour, with Abdourahman pressing de Groote’s Czech partners to make him return a $533,000 loan. When this failed, Aboudarham sued de Groote in the US and Swiss courts.
The Swiss attorney general’s office opened an investigation, which resulted in de Groote and MUS’s Czech directors being charged with misappropriating the company’s assets. Prosecutors claimed he had used Appian as a screen for illegal purchases of MUS stock, disguising the true identity of the buyers – the five Czechs.
The five, executives of MUS or members of its supervisory committee, had gained control of nearly 97 per cent of its stock. Deposited in nearly 100 bank accounts in Switzerland, Liechtenstein, the Bahamas and elsewhere, the money they misappropriated was laundered via more than 30 intermediary companies.
De Groote’s co-defendants were imprisoned for between 36 and 52 months and fined for aggravated money laundering, fraud or complicity in fraud. Though not imprisoned, de Groote was probably the first former director of the IMF to be convicted of fraud. The court ordered 660 million Swiss francs in frozen assets to be paid to Czechs left out of pocket.
The president of the court told de Groote that he had “taken advantage of his excellent reputation”, giving the Czech authorities and media information he knew was “contrary to reality”. The Swiss newspaper Le Temps commented: “Jacques de Groote participated in this massive deceit and received about 1 million Swiss francs in return. He played a shady role backing up the idea that there were possible foreign investors. Thanks to him, the five Czech businessmen could go forward wearing a mask.”
De Groote declared: “I will appeal this decision to show that I acted in good faith. It is crucial for me to put an end to this long chain of trials that has lasted for more than 10 years, and ruined me morally, financially, and at 86 years old physically”. Though his appeal was upheld in 2019, he knew his reputation would not recover.
Jacques de Groote’s wife Jacqueline predeceased him by a year. His surviving family includes a daughter.
Jacques de Groote, born May 25 1927, died September 21 2024