Staff Association Reaction to Board Statement.

The staff of the bank are angry and rightly so. Here is the official reaction of the staff association to the board announcement: May 17, 2007

Welcome though it is, the President’s resignation is not acceptable under the present arrangement.  It completely undermines the principles of good governance and the principles that the staff fight to uphold.  Staff of the WBG, Board of Governors, Executive Directors and staff cannot rebuild an institution’s reputation under such an agreement. 

The staff of the World Bank have waited – patiently – for nearly six weeks, trusting that the Board of Directors would reach a solution that reflects the Development Committee’s statement of April 15th.  In this statement, the Board of Governors charged the Executive Directors “to ensure that the Bank can effectively carry out its mandate and maintain its credibility and reputation as well as the motivation of its staff.”  Given the comprehensive report by the Ad Hoc Group (on May 14, 2007), we are shocked by the statement from the Board today which represents a full reversal of their own findings and fails to meet the fiduciary responsibility placed on them by the Bank’s Governors.
If the Board’s decision cannot be reversed, then we ask the Board to ensure that between now and June 30 th , the following measures are implemented immediately:

Place Mr. Wolfowitz on Administrative Leave
Appoint an acting-President to manage the institution and to make day-to-day decisions
Follow Bank procedures regarding protection of documents, records, access to electronic files, and all Bank resources

In addition, we believe that in order to protect staff and safeguard against any retaliation, the Board should also ensure that Mr. Wolfowitz is prevented from making any decisions affecting the work of the Bank or its staff.

We will press the Board to answer the staff’s justified concerns regarding their statement.

World Bank Group Staff Association Executive Committee

One thought on “Staff Association Reaction to Board Statement.

  1. Comments from multiple readers (see names below the comments) below. Re-posted here following the site transition.

    What about the cronies?

    what about the political hacks? ~ May 18, 2007, 03:23 AM

    Wolfie the extortionist…is rumored to be heading for Transparency International, with a book deal of course!

    Sean Cooper ~ May 18, 2007, 03:27 AM

    The staff association seems to assume that the board has their best interest at heart, which certainly isn’t true. Let’s not forget that the bank has been tainted for ages and this recent situation is just the most public of many at least equally disheartening situations that have revealed the true nature of those who call the shots there. Management has never loved labor.

    Clair ~ May 18, 2007, 03:57 AM



    Strip away the diplomatic language, instead of exonerating PW, the statement basically said in no uncertain terms that PW was forced to resign or he would have been terminated for cause.

    The key to reading the statement is to reread the Ad Hoc Group Report first, and then to insert the implicit references to the report in each sentence. Note that the EDs did not distance themselves from the Report, and indeed, by making favorable references to it, affirmed it de facto.

    The gist is the EDs at no point deny that PW is guilty of breaking Bank rules. PW also agreed with that as well. The only point of dispute was his motive. The ED’s statement effectively says that PW thinks he acted ethically and in good faith, the EDs accepted that he said this but NOT that he did.

    PW and Bennett basically lost his shirt in this game.

    Here are the details:

    Washington, May 17, 2007


    Over the last three days we have considered carefully the report of the ad hoc group, the associated documents, and the submissions and presentations of Mr. Wolfowitz.

    What this says is that they have taken all the evidence into consideration before making a decision. While it does not expressly endorse the ad hoc Group report, it at no point says that it disagree or deny the findings.

    In the absence of an affirmative denial or repudation of a document that has been made public, the default interpretation has to be that the document carry the endorsement of the EDs even without a formal adoption.

    Our deliberations were greatly assisted by our discussion with Mr Wolfowitz.

    This sentence is rather odd — what did PW add in his “discussion”? Is it a CONFIRMATION of the observation in the report that PW, “….places Mr. Wolfowitz’s personal interests ahead of institutional interests” (ad hoc Group Report, para 106), “President’s actions are inconsistent with his obligation to “maintain the higest standards of ingegrity in [his] personal and professional conduct and observe principles of good governance….” (para 107)

    He assured us that he acted ethically and in good faith in what he believed were the best interests of the institution, and we accept that.

    The key here is, “He assured us he acted ethically and in good faith in what he believed were best interests of the institution”

    The report states, “… that in actuality, Mr Wolfowitz from the outset cast himself in opposition to the established rules of the institution. He did not accept the Bank’s policy on conflict of interest, so he sought to negotiate for himself a resolution different from that which would have applied to the staff he was selected to lead…” (Para 140)

    Sure, he acted ethically and in good faith based on his own conception of the rules, but not the Bank’s established rules.

    In other words, PW SAYS he acted ethically and in good faith…… and the EDs accepted that he said that but NOT that the EDs accepted that he did in fact act ethically and in good faith.

    “What he believed were the best interest”…. in his mind… but not the EDs.

    In other words, what he believed to be in the best interest of the institution is NOT what is in fact in the best interest of the institution from the ED’s point of view.

    Another way to say this is, “PW insist he acts ethically and in good faith, so we accept he said that, but we do not accept that he did in fact act ethically and in good faith”.

    “He certainly did not act in the best interest of the institution EXCEPT in his mind. In his mind, he cannot distinguish between his selfish interest and that of the institution.”

    Note that the Statement DID NOT state that PW is cleared from violating the Bank rules. In fact, it affirmed it. The issue of ethically and in good faith only dealt with motives, not what was actually done.

    Actus Rea (violation of Bank rules, has been ceded by PW and Bennett). Mens Rea has also been ceded by PW because it is clear from the above discussion that the Bank do not accept his explanation. It only accept that he said it.

    We also accept that others involved acted ethically and in good faith.

    This is unqualified.

    What it means is that although the individuals concerned could have worked harder to prevent malfesenance by PW, they acted ethically and in good faith even though at the end, they caved into PW out of fear. Hence, they are absolved of blame. See next sentence.

    At the same time, it is clear from this material that a number of mistakes were made by a number of individuals in handling the matter under consideration, and that the Bank’s systems did not prove robust to the strain under which they were placed.

    The key point here is “Bank’s systems did not prove robust to the strain under which they were placed”.

    What this means is that they did not set up a system whose goal is to prevent malfesnance by the President. A President who had the power to bypass the ‘safety checks’ like the Corporate Consel, the VP HR, the Ethics committee, etc. Since PW controlled all this staff, and in addition, INT via his appointment, there was effectively no restraint on him except for the EDs. Even the EDs proved to be reluctant to act until the scandal engulfed the whole Bank.

    When individuals handling the matter made mistakes, it is because PW threatened them, bypassed them, and ultimately, forced them out. When PW didn’t get the answer he wanted, he just got it from somewhere else — including the use of an outside consel in lieu of an in house counsel.

    Yes, the individuals could have made a stand against PW, and not make a ‘mistake’, but it would have cost them their jobs or worst. PW imposed his own rules on the institution even when it is against established rules, so who is a lowly VP or MD to disagree or resist him?

    One conclusion we draw from this is the need to review the governance framework of the World Bank Group, including the role as well as procedural and other aspects of the Ethics Committee.

    Never again, will a President have so much power. Expect to see an Ethics committee and probably INT that reports directly to a committee of the Board.

    The Executive Directors accept Mr. Wolfowitz’s decision to resign as President of the World Bank Group, effective end of the fiscal year (June 30, 2007).

    The sentence is placed immediately after a discussion about whether PW and others acted ethically and in good faith, and the ‘mistakes’ of others who did not put up a stronger fight to stop him. That implies that the reason his resignation is being accepted is directly related to his ethical lapses.

    In all but name, taken together with the first sentence that says the ad hoc Group’s materials were considered carefully, says that is the reason PW is resigning.

    The Board will start the nomination process for a new President immediately.

    A bombshell.

    Since when have the Board initiated the nomination process? It was the perogrative of the US to do that.

    So this sentence implies that the fundamental formula for selecting the President of the Bank has changed. The US no longer solely nominate the President.

    The US may still have a veto, may submit names to be nominated via their ED member, but the implied is that other Board members can submit nominations.

    Details of what actually changed would be one of the most significant part of this scandal.

    We are grateful to Mr. Wolfowitz for his service at the Bank.

    However, note there is no connecting phrase / comment that links his service to what was done in the next few sentences.

    It begs the question, did the EDs want to say, the following were done IN SPITE OF PW? Certainly they did not want to mean because / due to / as a result of PW.

    Much has been achieved in the last two years, including the Multilateral Debt Relief Initiative, the Clean Energy Investment Framework, the Africa Action Plan, and the Avian Flu Initiative. 2006 was a record year for IDA lending, especially in Africa. The Bank has launched emergency action programmes in Liberia, the Democratic Republic of the Congo and the Central African Republic, and played a key role in the Lebanon and Afghanistan donors conference. In March, after an unprecedented global consultation process, we adopted a new strategy for the Bank’s work on Governance and Anti-Corruption. And we have new strategies for Rapid Response in Fragile States, for the Health Sector and for the Financial Sector.

    It says that in spite of PW, the Bank staff carried on. A great compliment to the staff.

    We thank Mr Wolfowitz for his leadership and for championing the Bank’s work across so many areas.

    The question is, what does it mean to seperate leadership and championing the Bank’s work?

    If the ‘and’ were taken out of the sentence, it would imply that leadership AND championing the Bank’s work are both one and the same. ie… ‘his leadership championing the Bank’s work’. By seperating them, it suggest that his leadership is seperate from the work — he didn’t lead the effort, but he did champion it (as in give a speech on this and that, the ceremonial part of the work). A subtle putdown.

    It is regrettable that these achievements have been overshadowed by recent events.

    The implied is that these are the achievements of the Bank staff, not PW.

    Mr Wolfowitz has stressed his deep support for and attachment to the World Bank and his responsibility, as its President, to act at all stages in the best interests of the institution.

    In other words, he finally realized that for the good of the institution, he has to go. The word “at all stages” suggest that he did not do so in previous stages before the resignation.

    This sense of duty and responsibility has led him to his announcement today.

    He finally saw the light that he either do the right thing, or it will be done for him.

    We thank him for this and underscore our appreciation for his commitment to development and his continuing support for the World Bank and its mission.

    He better abide by the deal and not play any more games.

    None ~ May 18, 2007, 04:18 AM

    I agree with the excellent comment and call to action of the Staff Association. It is unacceptable that a President who has been found guilty as charged of dishonesty and harming the Bank’s reputation with his disgraceful PR campaign, could be told “heckuva job, Honest Paul” and left in place to do further harm.

    And yes, speaking of which, what of the needed corporate delousement of the odious flunky-flacks that Whinerwitz so praised in his flatulent, self-congratulatory, ad nauseum resignation statement?

    The Board must insist that his only allowed personnel action is to fire every single one of his gang of harpies and flunkies.

    Now as to Riza, a pre-existing harpie, she must be terminated for cause….so find a cause, fast. How about the Staff Rule about not bringing discredit on the organization? She has certainly done that in spades.

    Out ! Out !! OUT !!!

    The Mahdi ~ May 18, 2007, 04:33 AM

    I just hope and pray all World Bank employees will make Paul feel welcome during his last month and a half at the bank. It could be harmful to his self-esteem if people don’t treat him like he’s important.

    And I hope that World Bank employees will accept his replacement, Alberto Gonzales, with open arms.

    CowDad ~ May 18, 2007, 04:43 AM

    Re: “Parsing the EDs Statement in Detail”. Is this meant to be a joke? This analysis is so pathetic I am surprised it gets such prominence on your site. Using this kind of logic I could “parse” this desperate article and show that it actually does not say what it intends to say. Please, no more of this BS.

    Let’s stick to the reality that the Board caved in to US pressure. The Staff Association knows what really happened – you think they do not have their own inside sources? Take their word for it. The Board let down the staff, the institution and itself. Now we must await the resignation of all the Executive Directors, who are guilty of breaching their own standards of integrity and due process.

    Grammaticus ~ May 18, 2007, 05:42 AM

    The Board only did what international diplomacy required.
    The proforma statement simply recognised the obvious fact
    that the man worked there and there is a cost to pay to get rid of him.
    Those in the US administration who were forced to support
    him were given with Mr. Wolfowitz a face saving exit.

    Masters of War—Bob Dylan

    Come you masters of war
    You that build all the guns
    You that build the death planes
    You that build the big bombs
    You that hide behind walls
    You that hide behind desks
    I just want you to know
    I can see through your masks

    You that never done nothin’
    But build to destroy
    You play with my world
    Like it’s your little toy
    You put a gun in my hand
    And you hide from my eyes
    And you turn and run farther
    When the fast bullets fly
    Let me ask you one question
    Is your money that good
    Will it buy you forgiveness
    Do you think that it could
    I think you will find
    When your death takes its toll
    All the money you made
    Will never buy back your soul.

    Wolfowitz has to be isolated and cutoff completely from any official duty
    his appointees have to be notified that the game is over and their fate
    is completely linked to that of their “master of war” Wolfowitz.

    Farewell ~ May 18, 2007, 05:49 AM

    The Board will start the nomination process for a new President immediately.

    Who are good candidates?

    Two names to consider:

    Stanley Fischer

    Jim Leach

    (any comments?)

    President Wanted ~ May 18, 2007, 06:55 AM

    This is so lame. This institution has no spine. Someone should put it out of its misery.

    ShutTheBankDown ~ May 18, 2007, 08:33 AM

    Dear Staff Association:

    This has been a very trying period for everyone, and without a doubt, all the individuals involved are exhausted by the ordeal.

    While it goes without question that many many more difficult jobs, such as reforming governance, need to be done, this is now a time to stand down from the adversarial posture that the Staff Association had to assume during the Wolfowitz saga.

    A note of thanks to the governments who deployed considerable political capital and resolve to see to it that the right thing got done is certainly in order.

    Compliance with existing Bank rules (with regard to taking matters of internal governance public) might also be a great way to cement a strong relationship with the EDs and secure the Staff Association a respected voice in what is certainly going to be sweeping reforms of governance.


    Outside Observer

    None ~ May 18, 2007, 12:28 PM

    “A bank official briefed by board members said the board would today issue a second statement asserting that Wolfowitz is immediately barred from making personnel and policy decisions, assuaging the fears of some that he might otherwise fire those who have rallied against him. But in a nod to the interests of the Bush administration, the board will assert that Wolfowitz is to stay on officially in his post and will not go on administrative leave, as many staff members had hoped.”

    yul ~ May 18, 2007, 01:55 PM

    Translation: “Uh oh, please don’t fire us.”

    Oh, sweeping change is coming, and that right quick. Sometimes, the best thing to give someone is precisely what that individual asked for.

    DC Worker ~ May 18, 2007, 09:40 PM

    The transparency with which PW and his cohorts flaunt their moral bankruptcy could make any despot squirm.

    Was the letter meant to address the transition or to warn the World Bank of doomsday?

    Why should we have faith in PW’s letter when, at the cusp of his self-inflicted downfall, he still had the wits to squander: (i) hundreds of hours of staff time on preparing briefs and conducting logistics for an expected obsolete trip to Europe; (ii) thousands of dollars in travel expenses for reconnaissance by his advance security team and, most importantly, (iii) the institution’s political capital in finagling meetings with high level government officials in Europe who had no desire to fraternize nor be seen with him? It was only to give an appearance of “normalcy” in the office suites on the MC building’s 12th floor.

    The letter’s ambiguity portends dubious motives for the next six weeks. Now more than ever, PW and his gang could launch their most dangerous attacks on the Bank and staff. That transition letter was concocted by a demagogue who dares to profess commitment to helping the poor especially those in Africa and yet at the same time squanders Bank resources with abandon in order to spite Bank staff for demanding competent and honest leadership.

    Regardless of any backroom deals to satisfy the U.S., the Executive Directors still have oversight and supervisory powers and responsibilities over a malevolent management team, even a lame duck one.

    Doomsday alert ~ May 20, 2007, 07:48 PM

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