Facing embarrassing accusations of financing a corrupt mining operation in Africa, the International Monetary Fund on Friday sought to fend off a lawsuit by a former employee who says he was unceremoniously fired for sounding the alarm.

However, in arguments before a federal appeals court in Washington, the question at hand was whether and in what circumstances the blanket of legal immunity given to organizations like the I.M.F. and the World Bank can ever be lifted.

As a result, the lawsuit by Eugène Nyambal, a Cameroonian economist and specialist in development, focuses not on the loss of his job but on a 2009 incident, in which he claims he was manhandled by private security guards at an employee credit union.

Nyambal claims he was fired without explanation in 2009 after complaining internally that an I.M.F. agreement to allow the financing of a mining project in Cameroon was little more than a gambit to embezzle tens of millions of dollars in public funds.

Though less grand than the corruption allegations, Nyambal has chosen the narrow question of his treatment at the credit union as a possible chink in the I.M.F.’s considerable legal armor.

The I.M.F.’s private contracts involving the credit union may have compromised the I.M.F.’s immunity, according to Nyambal’s lawyer, John M. Shoreman.

Judges at Friday’s appeals hearing appeared skeptical of both sides.

However the questioning was heaviest from Senior Circuit Judge Laurence H. Silberman, a Reagan appointee and erstwhile player in conservative Washington.

UnknownSilberman noted that the I.M.F. was claiming that any waiver of immunity had to be approved by its executive board.

“Suppose Mme. Lagarde writes a contract for a million dollars in furniture that expressly waives immunity,” said Silberman, referring to I.M.F. Managing Director Christine Lagarde.

“If she did sign that agreement, how would a party dealing with the I.M.F. know that she doesn’t have the authority to waive immunity?”

Under Silberman’s repeated interruptions, Patrick J. Carome, the WilmerHale media litigator representing the I.M.F., at times stammered to make complete responses.

“I suppose there would be some issues in that case,” said Carome, a former in-house lawyer at The Washington Post.

“I think that weakens your argument,” said Silberman.

Carome responded that an agreement between the I.M.F. and one outside party would not give a third party, such as Nyambal, grounds to challenge the organization’s immunity.

Largarde is herself now reportedly under investigation over a $630 million settlement in 2008 with the French businessman Bernard Tapie, during Lagarde’s term as France’s Finance Minister.

The matter pales, however, in comparison to the uproarious repeat sex scandals that brought down her predecessor, Dominique Strauss-Kahn.

Argument over Immunity

Wherever they operate around the world, international organizations such as the World Bank and I.M.F. enjoy sovereign immunity to protect them from the whims of local governments.

But critics say this has contributed to a hostile climate for whistleblowers, leaving the organizations beyond the reach of national courts and allowing them to decide internally whether the powerful figures within them can or should be held to account.

Both Silberman and Circuit Judge David S. Tatel also questioned Shoreman as to why an I.M.F. contract would ever waive immunity for a third party like his client, Nyambal.

They also asked how Shoreman could know whether or not any more relevant documents could emerge in discovery with the I.M.F., which had already provided two contracts with the Credit Union.

“I don’t see why it’s unfair to describe your position as a fishing expedition,” said Silberman.

Shoreman replied that the trial court had broad discretion in governing discovery.

Nyambal is seeking $3 million, claiming he suffered civil assault, false imprisonment and emotional distress when security guards forced him to leave the Bank-Fund Staff Federal Credit Union in July 2009.

But the incident is only a tangent to what Nyambal contends was the reason for his dismissal–expressing concerns about a potentially corrupt mining deal.

The government of Cameroon in 2008 won approval to use $60 million of I.M.F.-administered public funds to invest in a cobalt mining concession granted to the Colorado penny stock firm Geovic Mining Corp. in 2003.

According to Nyambal, however, the arrangement was little more than a ploy to embezzle tens of millions of dollars through Cayman Islands bank accounts by looting a local subsidiary.

The subsidiary GeoCam was also jointly owned by unidentified local shareholders, whom the government has refused to identify but who are reportedly tied to former government leaders.

Credit arrangements between Geovic and GeoCam called for the subsidiary to repay operating expenses to Geovic as though they were loans. According to Nyambal, however, GeoCam was placed under the control of Geovic Inc., a Cayman Islands concern with no available financial statements.

According to Nyambal, the bulk of the I.M.F.-approved financing was then transferred to offshore accounts in the Caymans.

After 11 years, and with tens of millions supposedly spent, Geovic Mining Corp. has not developed any mine and is unable to meet the payroll of its small cadre of employees, according to securities filings.

A planned buyout of the Cameroon operations by a state-owned Chinese firm, Jiangxi Rare Metals, appears to have fallen through, leaving the company to contemplate bankruptcy.

Geovic Mining CEO Michael T. Mason and the Cameroonian embassy in Washington did not respond to a request for comment on Friday.

Cameroon is a member of the Extractive Industries Transparency Initiative, a collective agreement to match industry payments to the government with government declarations of payments received.

The I.M.F. has said that it takes all such allegations seriously, but that a staff ethics investigation in 2010 had turned up nothing.

The investigation focused on whether “economic governance issues” could be a bar to further I.M.F. lending.

Following his ouster from the I.M.F., Nyambal says he was barred from entering the I.M.F. premises in Washington and briefly those of the World Bank as well.

Beatrice Edwards, the executive director of the Government Accountability Project, which previously represented Nyambal, said Nyambal’s blacklisting from I.M.F. headquarters showed the “extreme measures” such organizations will take “to silence and ostracize a whistleblower.”

“We hope the U.S. courts can make this right in some small measure,” she wrote in an e-mail.

Note: The above story was corrected to reflect that the I.M.F. does not own the employee credit union and to clarify the nature of remarks made by Patrick Carome.

Douglas Gillison

Douglas Gillison

Douglas Gillison is a former staff writer for 100Reporters. His investigative projects have included the declassification of 1,300 pages of FBI records from a 1997 political massacre and the exposure of payments by a publicly traded mining company that are now the subject of an international criminal bribery investigation.

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