who will be next World Bank President What will they do


Rising to the Occasion It's good to see that someone was finally getting back to work at the World Bank. For those staff who were not among the many who got an email last evening summarizing The Current Situation, here's a text-based version. Apologies for multiple copies.


The sheer volume of information that has been produced regarding the current situation has served to cloud the core issues, a situation exacerbated by Mr. Wolfowitz's statement of April 30 2007 which presented numerous unsubstantiated assertions as facts. The following is an attempt to identify the core issues and the critical facts in evidence:

Issue 1: Mr. Wolfowitz's initial offer to recuse himself

FACT: Mr. Wolfowitz's attorney communicated to the General Counsel on May 29 2005: "That recusal process would not - I repeat, would not - involve recusal from professional contact." (April 11 2007 Report of Ad Hoc Group, Annex 2)

FACT: The Ethics Committee considered the proposed recusal insufficient and proposed a relocation/absence of professional contact. (April 11 2007 Report of Ad Hoc Group, Annex 5)

Issue 2: Instructions of the Ethics Committee to Mr. Wolfowitz

FACT: The Ethics Committee advised that Ms. Riza be relocated beyond supervising influence of the President (external service was only one possible option), that the potential disruption of her career prospects be recognized by an in situ promotion "on the basis of her qualifying record as confirmed by her shortlisting" for a job promotion, and that the President and the General Counsel, communicates this to VPMENA and VPHR for implementation. (April 11 2007 Report of Ad Hoc Group, Annex 5)

FACT: The Ethics Committee was not consulted on, nor did it approve, the following terms of the arrangement:
* Salary increase upon promotion to GH of more than double that allowed by Staff Rule 3.04
* Annual Increases of approximately double that allowed by Staff Rule 6.05
* Stipulation for subsequent promotions to Level GI or GJ
(Ad Melkert Statement, April 30, 2007)

FACT: The information provided to the Board (and repeated in Mr. Wolfowitz's April 30 2007 Statement to the Ad Hoc Committee) as the basis for the in situ promotion to Level GH was incorrect. Ms. Riza was interviewed for the job as a courtesy because she had been "acting" in the position. Ms. Riza had been turned down for promotion to Level GH because she lacked the necessary qualifications. (Government Accountability Project, April 30 2007 Press Release).

FACT: The Ethics Committee did not intend, or foresee, that Mr. Wolfowitz would engage directly in the negotiations on the matter. (Ad Melkert Statement, April 30 2007)

FACT: Mr. Wolfowitz did not adhere to the Board's instruction (above) to involve the General Counsel, and rejected Mr. Coll's request to do so. (Paul Wolfowitz statement, April 30 2007). The Bank was deprived of legal representation on the question of whether these arrangements complied with Bank rules (Roberto Danino, April 30 2007 Statement).

FACT: The outside law firm hired to review the arrangement and conclude that it was a "reasonable resolution" subordinated their findings to State Dept. legal opinion, which has not been produced. These findings further did not opine that the arrangement conformed with bank rules, (Document 13, April 11 2007 Report of Ad Hoc Group)

FACT: The terms of Ms. Shaha's arrangement were not "in line with" the terms for other staff under any circumstances. The terms dictated by Mr. Wolfowitz in his August 11 2005 memo to Xavier Coll violate the staff rules below, which make clear that the initial raise and the guaranteed mid-point 5 annual increases are very "out of line."

3.04 Except as provided in paragraph 3.06, upon promotion to a higher grade pursuant to the provisions of Rule 5.05, a staff member will receive an increase equal to the greater of:
i. 3 to 12 percent of the market reference point of the new grade up to the maximum of the salary range for the new grade; or
ii. the amount necessary to bring the net salary to the minimum of the new grade.
6.05 A staff member who has been on leave without pay, or external service with or without pay, for a period of three calendar months or less as of the date of the general salary review will receive an increase under the salary increase matrix at the time of the general salary review. A staff member who has been on leave without pay, or external service without pay, for a period longer than three calendar months as of the date of the general salary review will receive a salary increase at the time of the general salary review in the amount of the MI. A staff member who has been on external service with pay for a period longer than three calendar months as of the date of the general salary review will receive a salary increase at the time of the general salary review equal to the average percentage applied to adjust the market reference points at grades A through I.

Issue 3: Violation of President's Contract and Bank's Ethical Rules

FACT: Paragraph 3 of the President's contract reads:

Code of Conduct. You will adhere to the standards set forth in the Code of Conduct for Board Officials (the Code). You will also be expected to observe the standards of ethical conduct applicable to staff members of the Bank, where these reflect a stricter standard."

FACT: The terms of Ms. Riza's assignment that violated the staff rules cited above were dictated by Mr. Wolfowitz in his August 11 2005 memo to Xavier Coll (Document 10 of released document):

Issue 4: Pattern of Misleading Information

FACT: Mr. Wolfowitz and his representatives have engaged in a pattern of misinformation, as demonstrated in the following:

* Statements in press and in April 9 email to staff suggesting that the Board directed the terms of Ms. Riza's arrangement.
* Repeated inaccurate statements about Ms. Riza's "shortlisting" which became the basis for an in situ promotion to Level GH (above)
* Submission to Ad Hoc Committee of a "DRAFT" email from Robin Cleveland dated September 9 2005 for which credible allegations of forgery have gone unanswered (worldbankpresident.org April 25 2007)
* Repeated Statements that such excessively generous terms were necessary to avoid legal vulnerabilities for the Bank. Then-General Counsel has repeatedly stated this was no such credible threat (Roberto Danino Statement of April 30 2007)

Issue 5: Pattern of Behavior

FACT: Mr. Wolfowitz's actions in this case are but one element in a demonstrated pattern of behavior which undermines his claims to have acted in "good faith:"

* Shaha. Riza - There are two documented previous instances in which nepotism has been alleged: (ii) An inquiry by the Pentagon's Inspector General found that Mr. Wolfowitz attempted to secure a high-level position in the administration of a post-war Iraq for Ms. Riza (Guardian April 26 2007); and (ii) the direction to SAIC to hire Ms. Riza for a 2003 mission to Iraq - prior to the terms of reference being written (GAP, April 17 press release)
* Suzanne Rich Folsom: Mr. Wolfowitz disregarded the highly qualified candidates yielded by a global search to appoint Ms. Folsom to the dual roles of Counselor to the President and Director of INT despite the conflict of interest (FT, April 21 2007).
* Robin Cleveland: Mr. Wolfowitz appointed his long-time associate Ms. Cleveland as his Counselor at an unprecedented grade level of GJ (Vice President) on an open-ended contract - i.e. tenured, costly for the Bank to terminate. Her lack of development experience and lack of masters (or equivalent) degree would have precluded her from qualifying for a Grade GF position in the Bank.
* Kevin Kellems: Mr. Wolfowitz appointed his spokesman from the Pentagon to a new post at the Bank which, while carrying the job description and duties of a Director (GI), was compensated as a Vice President (GJ), also on an open-ended contract.

Issue 5: Portrayal as Victim of Circumstance

FACT: Mr. Wolfowitz's statements communicate that he feels he is a victim of, among other things, circumstance. This is inconsistent with the options he had available to him:

* Mr. Wolfowitz's appointment was not involuntary; he worked very hard to secure Board approval. Mr. Wolfowitz had the opportunity to discuss the job offer with his partner and make a decision that acknowledged the trade-offs all Bank couples make.
* Mr. Wolfowitz chose to dictate the terms of this arrangement rather than charging the HRVP and General Counsel, consistent with the Board's instructions, to take the necessary steps to implement the advice of the Ethics committee.
* Mr. Wolfowitz apology and acknowledgement of error on April 12 (AP April 12) indicates that he understands he should have refused to take part in or be consulted on the discussions, and that it would have been consistent with the Board's advice for him to request only to be notified of the resolution.

Issue 6: The Real Smear Campaign

FACT: Bank staff have been consistently smeared by Mr. Wolfowitz. The leaks that brought this situation to light and subsequent actions by those who seek to hold him accountable have been characterized by Mr. Wolfowitz as "a conscious campaign to undermine my effectiveness as President and derail important programs of the Bank to aid the poor, especially in Africa." (Paul Wolfowitz April 30 2007 Statement)

FACT: This unsubstantiated claim is refuted by the credibility of those who have sought to hold Mr. Wolfowitz accountable for his actions. The following key actors have called on Mr. Wolfowitz to take accountability for his actions and the resulting harm to the Bank - Mr. Wolfowitz claims that to heed their call would send "a terrible message that the Bank does not care about reform." (Paul Wolfowitz Statement April 30 2007):

* Government Accountability Project: Many of the key findings in this investigation have been unearthed and publicized by this leading whistleblower organization - an organization that has consistently pushed the Bank toward reform.
* Governance and Anti-Corruption Team: 46 of the Bank's top governance specialists, assembled at Mr. Wolfowitz's direction to implement his GAC strategy.
* Managing Director Graeme Wheeler: In an informal meeting of Wolfowitz and the Bank's Vice Presidents, Mr. Wheeler urged Mr. Wolfowitz to resign.
* Former Vice Presidents and Directors: More than 40 of the most respected names in the history of the Bank, including dozens of former vice presidents, signed a letter to the Financial Times calling on Mr. Wolfowitz to resign.
* Independent Evaluation Group: This is the Bank's only independent evaluation authority, and the most credible voice for increased effectiveness within the Bank.
* The European Parliament: The only directly-elected body covering the whole EU.
* Oxfam: The world's leading Civil Society Organization in service to poverty alleviation has called upon Mr. Wolfowitz to resign.
* Global NGO Community: More than 125 NGOs have signed onto a letter demanding Wolfowitz's resignation (Bank Information Center website)
* Center for Global Development: Nancy Birdsall, the leader of this leading voice for reform and strengthened development effectiveness, was one of the first voices to join that of Bank staff in calling on Mr. Wolfowitz to resign.
* Financial Times, The Economist, New York Times, International Herald Tribune, Le Monde, Washington Times, and 20 other major newspapers from around the world: These media outlets have published editorials calling on Mr. Wolfowitz to resign.
* 5 Former Governors of the Bank: 5 former Ministers of Finance from Latin America called on Mr. Wolfowitz to resign in a joint letter to the FT on May 2 2007.
* Avaaz Petition: Approximately 50,000 people in 196 countries have signed onto a petition at Avaaz.org demanding Mr. Wolfowitz resign.

FACT: Mr. Wolfowitz saw fit to cast stones at others in the Bank - cases which have been picked up in greater detail in the press following his April 30 statement. His attorney, Robert Bennett, has not only furthered the myth that Bank staff opposed to good governance are the problem, but also made an unsubstantiated suggestion in an April 29 interview that he knew of other such deals in the Bank. (NYT, April 29 2007)

Issue 7: It is unclear what Ms. Riza been doing for the Past 2 Years

FACT: In a letter dated September 16 2005, the US State Department requested the "secondment" of Shaha Riza to State. (Document 15 of Released Documents)

FACT: Xavier Coll's September 21 letter to the US State Department agreed to the secondment and stated that the Bank will not maintain time and attendance records for Ms. Riza and will not evaluate her performance either during or after her assignment. (Document 16) In short, the WB takes not responsibility for supervising Ms. Riza

FACT: October 5 2005 letter from State Department (Document 17) supersedes September 16 request for secondment and states that "Ms. Riza is not viewed "as detailed or seconded by the US Government," but rather as a World Bank employee assigned to work jointly with State and World Bank. US appropriations law forbade her secondment, thus USG had no responsibility to supervise her.

FACT: The relevant documents from the State Department have not been produced (i.e. the legal opinion, relevant memos and emails).

FACT: On behalf of the Bank, on November 6 2006, Robin Cleveland authorized the transfer of Ms. Riza's external service to Foundation for the Future - a shell organization with no office, no phone listing, and no apparent output. (WSJ April 13 2007)

FACT: The documentation produced thus far yields no information on the outputs of Ms. Riza's work since commencing her "external service."

Deep Insider ~ May 04, 2007

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