Canada-China Relations Committee on Dec. 11th, 2023

I am alleging undue Chinese Communist Party influence in the everyday operations of the bank. It's where key positions in the bank, decisions made in the bank on discretionary spending, important projects that need approval and who gets the nod on budget projects.... There's a whole latitude of everyday operating decisions inside the bank that either go to the board or go through management for a rubber-stamp decision, but are not decided by them. The president's office has a considerable degree of ability inside the bank to make decisions.

Keep in mind, I ran the communications department. That's my lens on the AIIB. Almost anything I was able to get approved for my department—moving to the tenth floor, opening a broadcast media studio, budget increases, six new head counts, out-of-cycle head counts—was decided by the president's office, not by the management or by the board of the bank.

3:50 p.m.

Liberal

Peter Fragiskatos Liberal London North Centre, ON

That's your main allegation.

3:50 p.m.

As an Individual

My main allegation is that this has created a toxic culture inside the bank, where people know there's a subterranean network of relationships—like the cool kids in school, as it were. I was warned about the power of Chinese Communist Party members, who are in league with each other as a favoured class inside of the bank. They have undue power and control inside the bank. It stifles free expression in the bank and sours the culture.

When I joined the bank, I was told there was a crisis of bullying. In fact, there was an anti-bullying program that the bank was developing at that time, which we called “respectful workplace” after I arrived. The departments that were most concerned with bullying were the departments that were under Communist Party members.

Liberal

Peter Fragiskatos Liberal London North Centre, ON

My intent here is not to be combative with you. Please don't take the next question as that.

As an Individual

No worries.

Liberal

Peter Fragiskatos Liberal London North Centre, ON

What is the specific evidence that you used to back your allegations?

I need you to be precise. What evidence would you point to? Is there anything concrete?

Is there anything electronic or physical in terms of evidence you have?

As an Individual

First of all, I left on my own steam for my own reasons, so I don't feel obliged to provide that kind of a detailed document summary of what I observed. I'm an eyewitness. I have opinions. I saw certain things. I'm sharing certain things. I wasn't sworn in today, but I would swear.

People keep asking me where the documents are. If I had taken those documents out of the bank, I'd be either in a Chinese jail right now or under serious litigation.

I can tell you openly and transparently everything I saw and experienced. I've given you some case study examples. I wrote n column in The Economist. I did many different interviews with different anecdotes.

If you're looking for a stack of documents marked “confidential” with a hammer and a sickle on them, you're not going to get them from me.

Liberal

Peter Fragiskatos Liberal London North Centre, ON

Okay.

You're saying you have seen certain things.

As an Individual

Yes. Sure.

First of all, there was the decision on which countries to go to by the bank president for the central Asia summit, which was adjacent to Xi Jinping's being there.

Last year around the time that I left the bank, there was a decision about where the president would go and what the president would say. To me, it was very clear there was a geopolitical piggyback on that to foster Chinese interest. These photographs weren't published. President Jin of the bank was meeting with world leaders—not with the flag of AIIB, but with the flag of the People's Republic of China. I prevented their publication internally at the bank because I felt it would not look good on a multilateral institution for its president to be seen meeting under the Chinese flag.

I was ordered to put on the website of a multilateral institution a statement of condolence when Jiang Zemin, the previous Chinese leader died. Our department pushed back. We thought that would not be appropriate because Queen Elizabeth had just died and we didn't post anything for her.

Liberal

Peter Fragiskatos Liberal London North Centre, ON

Mr. Pickard, I'm sorry to interrupt you. You'll have an opportunity to expand on the answer in other rounds, I'm sure.

I just have 45 seconds left.

When you raised the allegation with government, how quick was the response?

Tell me about that engagement.

As an Individual

That's a very interesting question. It's a good one.

As soon as I acted, I heard from the Canadian embassy in Beijing. I was in Japan already and I received a call from an official at the embassy. This is before the government had done anything. It's after I had resigned, after it was in the public domain, and I didn't resign until I was in Japan. He was trying to track me down on the phone.

I spoke with him. I don't think we spoke for more than half an hour and I told him exactly why I was leaving the bank. A few hours later, I think I was on a flight and there was the announcement by the government of what it had decided to do to freeze the membership and to review it.

Liberal

The Chair Liberal Ken Hardie

That was a very quick response. Thank you very much.

As an Individual

Yes, very quick.

Liberal

The Chair Liberal Ken Hardie

We're out of time for you, Mr. Fragiskatos.

Mr. Picard, are you fluent in French?

As an Individual

I'm not. Not anymore.

Liberal

The Chair Liberal Ken Hardie

Okay. Make sure you have the earpiece and the channel selected because we're about to turn the floor over to Mr. Bergeron, for six minutes or less.

Bloc

Stéphane Bergeron Bloc Montarville, QC

Thank you, Mr. Chair.

Mr. Pickard, would you say this kind of thing happens at other international financial institutions, or is it really specific to this particular institution?

As an Individual

That's a very good question because defenders of the AIIB have said there's nothing to see here, folks, nothing to be concerned about with the Communist Party because the Communist Party in Beijing at the AIIB is just like Republicans and Democrats at the World Bank at Washington.

That is a school of opinion. That was a common reaction when I left the bank. Frankly, though, knowing a thing or two about doing business in China and having lived in the United States, I don't think that's a very good analogy.

I also happen to have had occasion to see, because of my years in China, how the president's office was working. I firmly believe that the president's office at the AIIB is far more powerful and, I would say, strongman focused, top-down and very commanding compared with what I understand to be the case at the ADB in Manila or at the World Bank in Washington, for example.

That made me think that the AIIB almost operated more like a domestic Chinese financial institution than a multilateral. Multilaterals in all these different countries, with all of these different members, are supposed to co-operate and communicate—not just be top down, or command, which was what I saw a lot of at the AIIB.

Bloc

Stéphane Bergeron Bloc Montarville, QC

Beyond the rhetoric that this kind of thing happens elsewhere, would you say this is really specific to this financial institution?

As an Individual

I believe very much so. I haven't worked at the World Bank or the EBRD, or these other places, but from what I understand.... MDBs are not like competitors with each other. It's a very small town. Everyone's very friendly. It's very clubby.

I understand through what I hear from different people that based on what I have shared, the top-down strongman system at the AIIB was far more pronounced than what you would get from the Japanese president of the ADB in Manila, or the World Bank in Washington, D.C.

That's what I hear. I was at the bank for 15 months, so I can't pretend to be an expert on that.

Bloc

Stéphane Bergeron Bloc Montarville, QC

Other than resigning and the reaction from the Canadian government, what can be done to try to reform the institution?

In your opinion, is it a lost cause?

As an Individual

I believe my departure at the very least will lead to an improvement in the problems I identified in terms of governance, the competence of management and the human friendliness of the culture. I think they will be very careful not to make a glaring mistake.

However, I just got an email before this very committee meeting from one of my sources inside the bank. Apparently, the foreign employees when they leave the bank, all of their archives, their records, are completely removed from the system. I feel like the reaction at the bank is to—

They demoted the communications department. I used to report to President Jin, and I guess they punished the department by forcing the department to report through the corporate secretary. I believe it's going to be hard for them to recruit foreign talent.

I have had lots of people ask me about my experience. I have provided transparent, open commentary. I wish many of the people who work there very well. There are some talented, well-educated, very impressive people there, and I miss my friends in China, my Chinese friends, whom I will never see again probably because I can't set foot in that country.

Bloc

Stéphane Bergeron Bloc Montarville, QC

How can Canada's financial participation in an organization be justified, without it having even one percent of the vote?

As an Individual