who will be next World Bank President What will they do
 
 

     
 

Watch What Wolfowitz and Shaha Do, Not What They Say. Now that US Vice President Dick Cheney has weighed in on Paul Wolfowitz's future, it's time to summarize Shaha Riza's employment at the World Bank, her role in encouraging Paul Wolfowitz to head the institution, and how she used her connection with him to try to settle old scores. This summary, prepared by knowledgeable Washingtonians, pieces together the story for those of you who want a bit more than what the Board will release later tonight. Here's what they don't want you to know about behind-the-scenes power and influence at the Wolfowitz World Bank.

There once was a woman from the Middle East who came to work at the World Bank in 1997. She had earlier played a role at the Iraq National Congress where she was part of a group along with Ahmed Chalabi which pushed hard for a US intervention in Iraq.

She came in the World Bank through personal connections and started as a not very senior short term consultant. She worked in the office of the Regional Vice President, Kemal Dervis, because the manager in charge of gender did not consider her qualified to work for her. She immediately parlayed her real concerns about the plight of women in the Middle East into gaining the support of a network of sympathetic women executives and Elaine Wolfensohn, wife of the then World Bank president.

She wheedled her way into a staff position working on gender issues. Since she had entered on the basis of personal contacts, her credentials and references were never vetted in an international search, or validated through interviews, as are those of most senior Bank staff

This later came back to haunt her.

Despite moderate performance, she quickly came to feel that she was entitled to a more senior role and resented the fact that some questioned her credentials for more senior responsibilities. Turned down for promotion by the Bank's gender sector board, she moved to the communications path hoping this would require fewer qualifications and that she could get the promotion to H-level, "lead" advisor there. So she began to handle the Middle East North Africa Region (MNA)'s communications on an acting basis. MNA staff treated her with caution since they had been informed -- sometimes by her -- that she had powerful patrons in Washington DC and inside the Bank.

She talked a lot about the World Bank to her neocon lover, who had in the meantime left his academic position and become the second most powerful official at the Pentagon. She and her lover shared a passion for changing the Middle East, and he quoted her at Defense Department meetings. She spent a lot of time over at the State Department and in other US Government meetings, and colleagues who worked on the Middle East and North Africa have remarked in recent internal postings that she often went missing from her MNA office.

As Iraq war planning began, she was involved in various ways we still don't know enough about. When the war was ''won," we now know that her lover directed a defense contractor to have her hired for a mission to Iraq. This was a conflict of interest for her as a World Bank staff member, and for him constituted a possibly illegal interference with US government ethics and procurement rules.

She misled her supervisor, the MNA VP, when she asked for leave, saying she was going on a civil society mission to see Iraqi women. When she returned, she gave a very peculiar presentation about the trip to the Board and later to Corporate Day (a monthly gathering of senior World Bank officials), again without mentioning that she had gone on the trip as a consultant to military contractor SAIC, another deliberate misrepresentation. It is unclear whether she was paid by the contractor -- records show a payment of $17,000 to her -- but it is clear that SAIC was compensated by the Pentagon for her services.

Meanwhile she encouraged her lover to make a bid for the presidency of the World Bank.

From what we can gather, she gave him lots of advice during this process, and played a pivotal role in introducing him and his team to her network of friends and colleagues in the Bank. Many of these people later turned up in the most senior positions around the President -- her first supervisor became his chief of staff and later MNA VP, her direct report became presidential speechwriter, and her friends and subordinates showed up on selection panels for positions such as Managing Director and Vice Presidents.

It became clear that she was playing a behind the scenes role in many appointments, but the lack of transparency made it difficult to ascertain exactly what the role was, and what her goals were. She talked to friends about how the organization needed to change.

The relationship was known in Washington DC and was reported in various newspapers at the time of his appointment. He claims he voluntarily reported the relationship to the Board -- he had no choice, because they already knew about it from the Washington Post.

When the Board raised concerns about this conflict of interest, that would have to be settled before they would sign his contract, both the new president and his companion the Bank staffer were furious. The president's lawyer sent an all caps email to the Board (PW's "RECUSAL PROCESS WOULD NOT -- I REPEAT, NOT -- INVOLVE RECUSAL FROM PROFESSIONAL CONTACT" with SR.) insisting that the president would continue to have professional contact with her.

What did this mean? It seems to have meant that he and she wanted to continue to implement their grand plan for changing the World Bank together, which apparently meant settling old scores for her and rewarding, richly, her friends and allies. It is clear from the documents and accounts of the time that she was deeply angry that her plan for influence had turned around on top of her suddenly and that she was being told she would have to leave the World Bank.

Then the president announced that he was going to protect the institution from her threats of a lawsuit by offering her compensation and other benefits. His worry struck many at the World Bank as misplaced, since it is not possible to sue an international organization and for her to have pursued the matter through internal administrative tribunals would have taken a long time and resulted in a medium size settlement, if that. Indeed, it is now on the record that the General Counsel told him this.

So what was he worried about, if the lawsuit was a red herring? It seems more likely that he was worried about how much she knew about him -- probably including the war, Iraq, his Pentagon days and his support of the Iraqi exiles and possibly including other extracurricular matters. People who know her say she is not someone you want to have get angry at you.

But as she and her lover looked for a way to placate her, things didn't exactly fall into place.

Contrary to what she believed, rising to be a communications advisor was not exactly a piece of cake. She found out that to be a communications advisor in the World Bank you need extensive professional qualifications: relevant degrees, 15 years experience, management experience, demonstrated high level strategic counseling in both political affairs as well as communications. To her great surprise, it wasn't "easy'' at all. The sector board turned her down twice because she simply didn't have it.

Nonetheless, she was promoted to a position created uniquely for her, given a huge raise, and sent outside the Bank, $60,000 richer to a job working for the daughter of her lover's political patron, the Vice President.

And so it was that she got a sweet, sweet deal -- ten years guaranteed- in-writing bonuses, promotions and pension benefits, to be reviewed by a panel that she would approve. She went to a ghost job, first at the State Department working for the daughter of the Vice President, her companion's political sponsor. Then, after that didn't work out and ran into State Department restrictions on secondments from international organizations, she was farmed out to an even more ghostly job at a no-address, no-phone number political foundation. This organization, financed mainly by the State Department, was run by her companion's good friend and sometime consultant, a former finance minister from Asia, who had been employed by the World Bank and paid over $20,000 in early 2006. He also got a trip to a conference in Rome, and a $1000 honorarium, just after he'd written to Paul Wolfowitz's Senior Counsellor to have her reassigned from State to the political foundation, on October 1, 2006.

She continued to be a force to reckon with at the World Bank, as her shadowy influence in appointments continued -- including having at least two close friends on the current search panel for the sensitive Human Resources VP, someone who will eventually play a role in managing her return to the institution. And it became evident that most information going to the new president went through one of her representatives in his outer office or past her in the evenings.

So when word began to spread about her $60,000 salary increase last year, senior staff looked at the conflict and saw that it was about a lot more than money.

As it turns out, this pattern of cronyism, poor judgment and retaliation has long characterized Paul Wolfowitz's career in government, as in the Bush Administration.

"In the end, his career suffered remarkably little from his substantive policy mistakes. But once he moved beyond the forgiving world of high Republican Party politics, his dependence on cronyism finally caught up with him. That he ran into such trouble at the World Bank for behaving in ways that apparently were business as usual for him at the Department of Defense only underlines how corrupt the Bush administration really is."

So are we surprised that Dick Cheney has now shamelessly weighed in during his trip to the Middle East, saying what a great job her lover is doing at the World Bank?

Voice of Reason ~ May 14, 2007


 
 
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