WEF launches probe into fraud allegations against Founder Klaus Schwab

The World Economic Forum (WEF) has confirmed the launch of an independent investigation into serious allegations of financial and ethical misconduct involving its founder and longtime chairman, Klaus Schwab, following his sudden resignation earlier this week.

According to an official statement released Wednesday, the decision was made by the WEF’s Audit and Risk Committee and supported unanimously by the board of trustees after receiving a whistleblower letter detailing claims against Schwab and his wife.

The letter reportedly came from current and former WEF employees.

The investigation was initiated just days after Schwab, 87, resigned “with immediate effect” on Monday.

While the WEF initially celebrated his 55-year leadership and “outstanding achievements,” a report by The Wall Street Journal revealed that the departure followed the board’s decision to act on the whistleblower allegations.

Schwab allegedly instructed junior employees to withdraw large sums of cash from ATMs on his behalf.

WEF funds were allegedly used to pay for private, in-room massages during hotel stays.

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His wife is accused of leveraging WEF-funded meetings to justify luxury holiday travel at the Forum’s expense.

The letter also raised serious concerns over workplace culture, including the mistreatment of female employees and a failure to address sexual harassment and discriminatory behavior under Schwab’s leadership.

In a response to Swiss newspaper Blick, Schwab vehemently denied all accusations, calling them “pure and simple lies” and asserting, “There is not a shadow of proof.” He stated that he has initiated defamation proceedings and claimed all personal expenses on business trips were reimbursed.

The WEF board reportedly convened an emergency meeting on Sunday, where it resolved to begin the formal investigation after consulting with external legal counsel. The Forum emphasized that while the allegations are being taken seriously, they remain unproven, and the organization will await the outcome before making further statements.

Following Schwab’s departure, WEF Vice Chairman Peter Brabeck-Letmathe has stepped in as interim chairman while a search committee looks for a permanent successor. Schwab had already handed over executive leadership duties last year to Børge Brende, former Norwegian foreign minister, with a gradual transition planned through January 2027.

Schwab, born in Germany in 1938, founded the WEF’s predecessor—the European Management Forum—in 1971 as a little-known Geneva business professor. Under his leadership, the annual gathering in Davos evolved into a global hub for political leaders, CEOs, academics, and activists, drawing both praise for fostering cooperation and criticism for promoting elitist networking.

While the WEF positions itself as a neutral, not-for-profit platform for global dialogue, critics argue that it serves as a haven for powerful corporate actors to influence policy in an opaque setting.

Schwab has long been the target of conspiracy theorists, and even billionaire Elon Musk once mocked him, saying Schwab “wants to be emperor of Earth.”

As the WEF itself has warned that misinformation and disinformation are among the world’s top short-term threats, the outcome of this investigation may be pivotal—not only for Schwab’s legacy but also for the credibility of the institution he built.