Schwab under fire – Transfer of assets at issue

The World Economic Forum confirmed on Thursday that Swiss authorities are asking questions about some financial transactions conducted by the group and its charitable foundation.

Recent articles in the Washington Post’s Foreign Service and the Wall Street Journal have questioned the propriety of the nonprofit Forum’s links to the firms in which it invests. 

The Journal reported Thursday that the Swiss were inquiring about possible illegalities concerning a transfer of assets from the Forum to the Schwab Foundation for Economic and Social Development, which was set up by Klaus Schwab, founder and president of the World Economic Forum.

No one has openly accused the Forum of breaking the law.  The Journal has alleged, however, that Schwab and the foundation made windfall profits from the sale of Advanced Video Communications to USWeb in 1998.

AVC operated the network linking the Forum’s members.

There also are questions about the Forum’s investment in high-tech consultancy firm Think Tools AG, since Schwab is on Think Tools’ board.  Schwab told Reuters in January that he had no personal holdings in the company.

The Schwab foundation has denied that the inquiry is an investigation into alleged wrongdoing, saying instead that Klaus Schwab contacted the Swiss authorities in an attempt to set the record straight.

“The supervisory authority has asked a few questions that have been answered,” said Kurt Alig, director of the Schwab Foundation.  “We are still in contact but this is not an investigation.”

Daniella Piselli, a lawyer for the Swiss Federal Supervisory Board for Foundations, confirmed that the agency had sent questions to the Forum in connection with the newspaper stories, but characterized those questions were a simple request for information.

The World Economic Forum is best known for its annual meeting at the Swiss mountain resort of Davos, which attracts top financiers and politicians from around the world.

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