Bob Pickard, a former communications chief at the bank, made the explosive allegations after resigning this week, and told AFP he left China hastily over concerns for his safety.
Speaking from Tokyo, he said the bank "serves China's interest" and the Chinese Communist Party (CCP) wields "undue" influence over every aspect of its operations.
"It's a resource to the geopolitical goals of the PRC (People's Republic of China)... in practice, I believe it serves China's interest," he told AFP.
The bank directed lending primarily to countries targeted by China's massive and controversial Belt and Road Initiative, he said.
"These are not disconnected ventures, the Belt and Road initiative and the AIIB... these are similar kinds of countries that China has been trying to cultivate politically."
In a statement issued after his tweets, AIIB called Pickard's allegations "baseless and disappointing".
"We are proud of our multilateral mission and have a diverse international team representing 65 different nationalities and members," it added.
The AIIB, a project pushed by Chinese President Xi Jinping, was launched in 2016 to counter Western dominance of the World Bank and the International Monetary Fund.
It has 106 global members, including Australia, Canada, France and Germany.
But the United States is not a member, having chosen to stay out from the start on concerns over transparency and governance.
- 'International institution' -
Pickard said he joined the bank "with my eyes open," but that its international membership had convinced him it would be multilateral.
Instead, after joining in March 2022, he was warned "not to mess with any of the party people... because they're powerful".
He declined to say who had issued him the warning, but said he raised concerns about the role of party members and their influence a month ago, in writing.
"The response was: 'Don't go there' basically."
He alleged foreign executives on the board were there for "window-dressing."
Inside the bank, "there's a parallel system, it's adjacent to the public-decision making structure," he said.
- Canada announces review -
The 58-year-old Canadian submitted his resignation earlier this week, and then quickly left China, waiting until he was out of the country to announce his decision and allegations on Twitter.
Canada and China have been at loggerheads since 2018, when a Huawei executive was arrested on a US warrant in Vancouver and two Canadian nationals were detained in China in apparent retaliation.
Pickard said the detention of Michael Kovrig and Michael Spavor had factored into his decision to leave China after resigning.
"I remember what happened with the two Michaels, and after the nature of my resignation, I left for the airport as soon as I could," he said.
"I left in such haste many of my belongings and even my wallet were left behind."
After his tweets, Canada's Finance Minister Chrystia Freeland announced Ottawa would "immediately halt all government-led activity at the Bank".
She also ordered an "immediate review of the allegations raised and Canada's involvement in the AIIB".
Pickard said he was "happy that my country's government is taking seriously the issue of lack of transparency and undue CCP influence over what is supposed to be a multilateral organisation".
"I believe that the Canadian government will find that ultimately, the interests of this bank do not coincide with the interest of our country.
"Why is Canada participating in an organisation that at the end of the day, makes China more powerful?"
The bank has faced similar accusations in the past, with then-vice president Thierry de Longuemar insisting in 2017 that it was not an "instrument of the Chinese state."
"China's wish isn't to create a new instrument of the Chinese state, it is to demonstrate its ability to promote a truly international institution based in China," he said.
Key issues straining China-Canada relations
Beijing (AFP) June 15, 2023 -
Canada has said it is freezing its participation in the Asian Infrastructure Investment Bank, after a former executive alleged that Beijing wields "undue" influence over the multilateral organisation.
It is the latest episode in a souring of relations between the two countries that began five years ago:
- Arrest of Meng Wanzhou -
Once-rosy relations began to sour in 2018 when Canadian police arrested senior Huawei executive Meng Wanzhou, who is also the daughter of the Chinese telecom giant's billionaire founder.
The arrest, at the behest of the United States, was linked to fraud charges relating to Meng's alleged efforts to hide violations of US sanctions on Iran involving a Huawei affiliate.
Meng, who now serves as Huawei's rotating chairwoman, remained under house arrest in Vancouver for almost three years while fighting extradition to the United States.
- The two Michaels -
Days after Meng's arrest, China detained two Canadians: former diplomat Michael Kovrig and businessman Michael Spavor.
Beijing was accused of using the two men in a bout of "hostage diplomacy" to pressure Ottawa into releasing Meng.
She was allowed to return to China in September 2021 after striking a deal with US prosecutors.
Hours after that deal was announced, the two Michaels -- who were detained for over 1,000 days -- were put on a plane home.
In December 2022, the US Justice Department dropped all charges against Meng.
- Uyghur 'genocide' -
Canada's growing outspokenness about China's alleged human rights violations has also worsened relations.
In 2021, Canadian lawmakers voted overwhelmingly to declare China's treatment of Uyghurs and other Turkic Muslim minorities in its northwestern Xinjiang region as "genocide".
MP Michael Chong led that effort -- prompting an alleged Chinese plan to target the lawmaker and his relatives in Hong Kong with sanctions.
And in February this year, Canada's parliament unanimously passed a non-binding proposal to take in 10,000 Uyghur refugees who have fled China but are now facing pressure to return.
- Tech battles -
The two countries have also traded barbs over tech, with Canada moving to curb the presence of Chinese firms in its communications infrastructure.
Last May, Ottawa said it would ban Huawei from Canada's 5G networks, citing concerns over national security. Chinese telecom firm ZTE was also banned.
Beijing said the restrictions were imposed "under the pretext of groundless security risks and without any solid evidence".
Canada in February this year followed the United States and the European Commission in banning the Chinese-owned video-sharing app TikTok from all government devices.
- Xi-Trudeau spat -
The bad blood was on full display in November last year at the G20 summit in Indonesia, when Chinese President Xi Jinping gave Canadian Prime Minister Justin Trudeau an on-camera dressing down.
Video recorded by reporters at the summit showed Xi scolding Trudeau over the leaked details of talks between them.
The comments came after Trudeau raised with Xi the issue of what he called Chinese "interference" with Canadian citizens and China's alleged meddling with Canada's democratic and judicial systems.
- Diplomats expelled -
That issue has since ballooned.
Trudeau in March appointed a special rapporteur to investigate alleged Chinese interference in Canada's last two federal elections, accusations that Beijing denies.
The Globe and Mail, citing unidentified intelligence sources, reported in February that China worked to defeat conservative politicians considered unfriendly to Beijing.
The newspaper also later reported that Ottawa had turned a blind eye to Chinese interference in Canadian affairs.
Citing classified documents and an anonymous security source, it said Chinese intelligence had planned to target lawmaker Chong and his relatives in Hong Kong and "make an example" of him for his alleged anti-Beijing positions.
In May, Canada announced that it would expel the Chinese diplomat accused of trying to intimidate Chong. China responded with a warning for Canada to "step back from the brink", and kicked out Ottawa's consul in Shanghai in retaliation.
- AIIB spat -
Allegations of Chinese meddling have now led Ottawa to say it will "immediately halt all government-led activity" at the Beijing-based Asian Infrastructure Investment Bank (AIIB).
That followed claims by the bank's former communications chief Bob Pickard, a Canadian national, that the bank is dominated by members of the Chinese Communist Party and primarily funds projects of interest to Beijing.
Pickard told AFP he was warned after joining the bank around a year ago "not to mess with any of the party people... because they're powerful".
AIIB confirmed Pickard's resignation but called his allegations "baseless".
Canadian Finance Minister Chrystia Freeland said her government would now conduct an "immediate review of the allegations raised and Canada's involvement in the AIIB".
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