World Bank board majority want Wolfowitz to resign

[Neil D]

11 May 2007 21:09:27 GMT

Source: Reuters

By Lesley Wroughton

WASHINGTON, May 11 (Reuters) - A majority of countries on the World Bank board believe Paul Wolfowitz should resign as President of the World Bank, bank board sources from rich and developing nations said on Friday.

"It is now very clear that a majority of members think Mr. Wolfowitz must resign," said one board source from a developing country, which received instructions from its capital this week not to support Wolfowitz's continued leadership.

"We believe that the World Bank cannot continue under the leadership of Mr. Wolfowitz," the source told Reuters.

The bank's 24-nation board this week delayed a final decision until next week over Wolfowitz's future, which hangs in the balance over a pay and promotion deal he approved for his companion, Shaha Riza, a World Bank Middle East expert.

The high-paying promotion sparked calls by the bank's employee association for Wolfowitz to resign and has paralyzed the institution, the globe's largest poverty-fighting agency.

Wolfowitz has said he took the advice of the board's ethics committee on Riza and that the row is part of a smear campaign designed to undermine his leadership.

Asked how many member countries thought Wolfowitz should resign, the source told Reuters: "More than 50 percent."

But another board official from a developed country cautioned that Wolfowitz's departure was not yet a foregone conclusion and he should be given time to respond properly to findings by a panel that his actions in the Riza's promotion broke bank rules.

He is expected to present his response to the panel by the end of the day today.

It was unclear whether the meeting of the board will decide Wolfowitz's future by consensus or whether it may be forced into a vote, which would be an unusual move.

There is concern among some board officials that a vote could further divide the bank by pitting allies of the United States against Europe and its supporters.

IRAQ WAR ARCHITECT

The official said among the issues being weighed by member countries was whether Wolfowitz's continued leadership of the World Bank would damage its ability to raise funds for anti-poverty projects, hurt the morale of the staff and further damage the bank's reputation.

The row over Wolfowitz has stirred lingering unhappiness, mainly among European countries, about his nomination to the job in 2005 because of his role as architect of the Iraq war.

Despite the private disquiet among Europeans at the time, Wolfowitz's appointment to the bank was confirmed without dissent on March 31, 2005. He has remained a controversial figure, locking horns with the bank's membership on such issues as his good governance and anti-corruption campaign.

Board sources said Canada and Japan would support the United States in its backing for Wolfowitz together with countries in Africa, where Wolfowitz has focused much of his attention.

The sources said Europe's push for Wolfowitz to resign was supported by Brazil, South Korea, India, Russia, Argentina, Saudi Arabia and Kuwait.

Exactly where China, Malaysia, Pakistan and Mexico stood remained unclear.

The White House has repeated almost daily that U.S. President George W. Bush has confidence in Wolfowitz, but this week referred the matter to the U.S. Treasury Department, which is responsible for U.S. World Bank policy.

U.S. Treasury Secretary Henry Paulson has stressed that it it is important to preserve the World Bank's standing in the world and that Wolfowitz deserved a fair process.

U.S. Secretary of State Condoleezza Rice has been quietly discussing the issue with her European counterparts as recently as Thursday, according to a European source.

Rice's access to European capitals provides an opportunity for the Bush administration to gauge how serious the opposition is to Wolfowitz's continued leadership.

[Neil D]

Overdrawn at the bank

Leader

Wednesday May 16, 2007

The Guardian

Last week the World Bank published a major book on a crucial aspect of development. The problem was its title. The scandal surrounding its president, Paul Wolfowitz, and the pay package he secured for his bank-employee partner means The Many Faces of Corruption (one chapter piquantly headed "Corruption in Public Procurement: A Perennial Challenge") has become less a resource for development economists and more a goldmine for satirists.

Poverty; development; infrastructure: the areas the World Bank deals in are hardly the stuff of laughs. Its president, however, has got caught in a controversy that sounds like a bad joke. A man who was bundled into the job by the Bush administration, which could no longer find a use for him, blustered about educating borrower nations in the ways of good governance - and was found wanting in this area himself. Thanks to Mr Wolfowitz, the salary of his partner, Shaha Riza, is higher than Condoleezza Rice's earnings. At just under $194,000, it would make a respectable prize on a gameshow. As the American satirist Stephen Colbert says: "He knows corruption is the enemy; and Mr Wolfowitz fights fire with fire."

No wonder that there is now a mutiny among staff and some (primarily European) donor nations. The turmoil has already driven out the bank chief's PR man, Kevin Kellems. He resigned saying that "given the current environment...it is very difficult to be effective in helping to advance the mission of the institution".

The same logic obviously applies to his boss. Mr Wolfowitz has fought off calls for his resignation, each time with weaker ammunition. First he declared that an investigation by the bank's executives would exonerate him. Instead it found him guilty of "questionable judgment and a preoccupation with self-interest". The bank chief said he thought he had been asked to arrange Ms Riza's pay, a claim the report says "simply turns logic on its head". His last defence is one of acting in good faith. Yet he reportedly threatened bank staff with retaliation if they revealed the pay rises and promotions won for his partner.

The bank's executive board, which met Mr Wolfowitz last night, is due to make a statement later this week. It could reprimand the bank president, or issue a vote of no confidence. But Mr Wolfowitz has been found guilty of the sort of conflict of interest that would normally lead to the dismissal of any other of the bank's 10,000 staff, and neither measure would calm the storm. So it should either sack him or arrange the terms for his departure.

His role as an architect of the Iraq war meant that Mr Wolfowitz was never going to get an easy ride at the bank. If he does go, his critics will doubtless be in celebratory mood. They will have won a prized neocon scalp. But bringing down one of President Bush's inner circle for violating an institutional code of conduct is a bit like nabbing a mafia boss for tax evasion. They should take this opportunity to push for reform of the system that put such a divisive figure at the helm of what is, after the UN, the world's most important development organisation.

The job of World Bank president is traditionally the gift of the US, just as the head of the International Monetary Fund is a European appointment. This is the legacy of an antiquated system. So far Europe has resisted any change of this cosy arrangement for retiring politicians. The IMF's managing director, for instance, is Rodrigo Rato, a Spanish rightwinger whose main qualification for the job seemed to be that he needed one. This is the time to reshape the system. Even before this controversy, the bank was passing the cap around for funding. The least donor countries should extract in return is the promise of reformed behaviour. Mr Wolfowitz must leave, but his departure should be the start of change, not the end of it.

[Dr. Shane]

I couldn't care less what happens to Wolfowitz but the entire incident does show the hypocrisy of the Left. When Clinton had oral sex with his girlfriend in the Oval Office and then used the Secret Service to cover it up and tried to bribe others to purger themselves, the Left gave him a pass as they said it was a personal matter. Yet when Wolfowitz allegedly uses his authority to get his girlfriend a high paying job the same people are quite concerned about his personal life.

If the accusations are true, than Wolfowitz, like Clinton, has let his personal life cause him to abuse the power of his professional life, and like Clinton should have, he should lose his job.

[bevin]

The left could not care less that Wolfowitz has a girlfriend.

What they object to is the widespread culture of corruption in the Bush administration where very senior people are robbing the public purse by

issuing no-bid contracts to their friends companies (eg: Halliburton)

buying stuff that doesn't work from friends companies (eg: New Orleans pumps)

buying stuff which is completely unnecessary (eg: vast quantities of small-pox vaccine that no-one wants)

and putting their friends in high-paying positions for which they are completely unqualified (eg: Heckuva-job Brownie, Wolfowitz's girlfriend)

Wolfowitz went to the World Bank complaining about a culture of corruption in the receipient countries, and promptly role-modelled corruption.

/Bevin

[lazarus]

The audacity of this fellow to stick around for so long after he was found out is telling. The relative silence of the "righty" talkers also telling.

[Woody]

As Christians we should forgive and forget.

[lazarus]

As a corrupt executive he should resign.

[Dr. Shane]

Quote:

As a corrupt executive he should resign.

I agree. That would have been the honorable thing for President Clinton to have done and Al Gore would have undoubtedly been elected in 2000. So as much as the Left dislikes G.W. Bush, they have Clinton to thank for him.

[Dr. Shane]

Quote:

The left could not care less that Wolfowitz has a girlfriend.

I didn't know that we had such an authority here at C/A on what the Left believes. I know that the issue with President Clinton wasn't his girlfriend either. It was his abuse of power and obstruction of justice.

Quote:

Wolfowitz went to the World Bank complaining about a culture of corruption in the recipient countries, and promptly role-modeled corruption.

If Wolfowitz is guilty of what he is accused of, he certainly should go. However there are a lot of anti-America and anti-Bush people in the world community that may be blowing this out of proportion, I am hesitant to jump on any band wagon.

That said, even if Wolfowitz is guilty of this "corruption", comparing it to the corruption of these recipient countries is like comparing the crimes of O.J. Simpson with those of Adolf Hitler. Both were guilty of murder but the number of their victims make the impact of there crimes hardly comparable. These recipient countries accept foreign aid that is meant to help the citizens of their countries and literally thousands go without proper nutrition, clean water and sanitary systems because their leaders embezzle the money for personal gain. That kind of behavior hardly compares to a man getting his girlfriend a job at an inflated salary.

[Neil D]

What you don't understand is the culture of the banking industry...It is dependant upon trust, and building trust... ANYTHING that looks like curruption errodes trust. The banking industrys is hypersensitive on this issue... So, when Wolfy complains about the curruption of the industry and then shows favoritism toward his girlfriend....well, that dog just don't hunt in the banking industry....

[Dr. Shane]

I guess I haven't followed the story that closely. I wasn't aware that Wolfowitz complained about corruption in the banking industry. I thought his complaint was about corruption in the recipient governments.

Now as far as cronyism in the banking industry goes, I have built enough banks to know it is common place. In fact, loans are often made to certain people whose credit rating doesn't allow it but they get it because of a friend in the industry. Construction contracts are often awarded to drinking and hunting friends. The list could go on and on. Cronyism is by no means absent in the banking industry. I am not trying to justify it, simply stating a reality.