Incredulity replaces Irony (Update with GAP) The issue now is that Paul Wolfowitz and his counsellors and their enablers have taken a mismanaged conflict of interest and botched "solution" that strains credulity, and blown it into an issue of global proportions. And even if you think he might be able to run the Bank, mobilize IDA and lead us to his dream of a world free of corruption--and few now do--this, alone, should be ample evidence of his unfitness to be President of the World Bank Group.

As Paul Wolfowitz sought to regularize the Bank's relationship with his girlfriend, the Ethics Committee was led to believe Ms. Riza was far more accomplished than the facts demonstrated. She was an acting unit chief, for which level GG was probably appropriate. She was never an "acting director".

She was not cleared for GH (twice) and she was not shortlisted for the job. So the whole approach to the problem was incorrect, however she and her attorney characterized it then, however Paul Wolfowitz characterized it to the Ethics Committee then and however he rationalized the exceptionally generous treatment in the directions he gave to Xavier Coll. And her dispatch to State violated US appropriations law, to boot.

Of course, after you've handed fabulous tax-free salaries to other arrivistes near and dear to you, fairness must apply to your girlfriend.

And let's not forget that other item on Shaha's resume. Shaha's credentials included the work, as a G4 visa holder, for American defence contractor SAIC working on political activities in an occupied member country with which the Bank had, at that point, no dealings. A job Paul Wolfowitz's office told SAIC to give her, and that her supervisor did not know about, never mind approve.

No, the facts are clear, however the lawyer-spokesmen (two now) spin them. Just ignore the 20 pages and his defiant statement and read the Government Accountability Project's excellent rebuttal.

Posted by Deep Insider at 10:43 PM

Full texts of Wolfowitz submissions to the board. Now on-line: the full documents that Wolfowitz and his team have submitted today to the Bank board's hearing. They contain a professional effort to re-marshal his arguments, but little new material. And no coverage whatsoever of the broader allegations which have emerged against him, Riza and his senior appointees.

The Washington Post has uploaded PDFs of the full legal statement and Wolfowitz's verbal opening statement.

On a quick reading it seems he sticks closely to the narrow technical details - attempting to blame the Ethics Committee for failing to do its duty. He does not go into questions of what Riza was doing consulting in Iraq, what her jobs at State of the Foundation consist of, nor any of the issues relating to his senior appointees and their alleged trampling of Bank policies and norms.

He makes another apology for the 'tumult' caused to the institution, but says the chaos would worsen if he is ousted. This effort to turn back his critics' arguments is most notable. He says that the Bank would have trouble finding a new president if the current one goes as a result of this process. Surely not: if someone is selected on the basis of merit, and not just by one government then they'll be in a stronger position. Especially if they operate in a much cleaner and more trust-building manner than Wolfowitz.

Secondly he says that he has done a lot to make the case for the Bank to get more funding; which would suffer if he goes. Again untrue. Two months ago Europeans were already unsure about big contributions to the Bank's IDA coffers while Mr Wolfowitz was in charge. How much more so now. And why should a Democrat-run Congress be more impressed to stump up for a Wolfowitz-run Bank than one led by someone else?

I have not had time to go through the Wolfowitz statement and papers in detail. Readers can post their reactions below.

Posted by Alex Wilks at 09:03 PM | Comments (14)

I am the victim Is this the excuse for incompetency? or blame the other side for smear campaign. Where is his notion of ACCOUNTABILITY ?

"In a prepared statement to the panel, Wolfowitz said the institution's ethics committee had access to all the details surrounding the arrangement involving bank employee Shaha Riza, "if they wanted it.""
How fast did he forget that he instructed the VP of HR to process the salary raise and the details of her promotion?
"I will not resign in the face of a plainly bogus charge of conflict of interest," he said.
Let's wait for and see the extent of the Ad Hoc Panel's recommendations to the Board!

UPDATE:
According to Bloomberg
"The panel will probably complete its investigation today and take one or two more days to write up its report, said a person familiar with the process who asked not to be identified.
The panel could then recommend firing or censuring Wolfowitz, the person said. A third option would be to present factual findings to the full board without suggesting a course of action, the person added."

Will the Europeans band together ( with Japan in a discete way) and could they sway some of the African countries?

Posted by The Beaver at 07:22 PM

There's no deception like self-deception Don't be troubled by Andrew Young's curious op-ed in the Washington Post this morning, for the reasons nicely summarized in Steve Clemons's Washington Note

Read down in the Young piece to the reason why celebrity wrong-doers hire celebrity spokesmen, and reflect on its applicability in The Current Situation.

But the really interesting article in the Post today was on page A3 by Shankar Vedantam "when seeing is disbelieving", a thoughtful and evidence-based piece on self-deception

"Self-deception evolves in the service of deceit for two reasons," "It improves your ability to fool others and, second, it reduces the cognitive costs of deception....If you can make yourself believe the untruth, for example, by marshaling evidence that supports your view and ignoring evidence that contradicts your position, it becomes that much easier to persuade others."

The Current Situation is replete with masters of the art of self-deception: Paul Wolfowitz, of course, and not about his old job. His claims about the ethics committee having signed off on this twice don't become true just because he keeps mouthing them, through his spokesman, Bob Bennett. Mr. Bennett seems pretty versed in self-deception, as he fulminates on how deplorably his client is being treated. At least he's not been fired. Yet. And the more they blow, the fewer people are persuaded, unless we're talking of the smell of a deal in the air.

And self-deception goes farther, even this morning, with a "That's one heckuva job, Wolfie" vote of confidence from the man who put him there. The Secretary of the Treasury must be appalled.

Posted by Deep Insider at 05:40 PM

[Updated] Naomi Klein: The Ship Must Go Down with the Captain This brilliant article by Naomi Klein of No Logo fame makes the audacious claim that the Wolfowitz scandals are an important opportunity to debunk the notion that the World Bank has ever been interested in development or poverty reduction. The example of Russia is telling and persuasive. (update: added pundita's response calling for criminal investigation of the Bank for crimes in DRC and elsewhere.)

Here's the whole article for those too lazy to follow the link... and below a response piece from Pundita.

Sacrificial Wolfie
By Naomi Klein, The Nation
Posted on April 28, 2007, Printed on April 30, 2007
http://www.alternet.org/story/51157/

It's not the act itself, it's the hypocrisy. That's the line on Paul Wolfowitz, coming from editorial pages around the world. It's neither: not the act (disregarding the rules to get his girlfriend a pay raise) nor the hypocrisy (the fact that Wolfowitz's mission as World Bank president is fighting for "good governance").

First, let's dispense with the supposed hypocrisy problem. "Who wants to be lectured on corruption by someone telling them to 'do as I say, not as I do'?" asked one journalist. No one, of course. But that's a pretty good description of the game of one-way strip poker that is our global trade system, in which the United States and Europe -- via the World Bank, the International Monetary Fund and the World Trade Organization -- tell the developing world, "You take down your trade barriers and we'll keep ours up." From farm subsidies to the Dubai Ports World scandal, hypocrisy is our economic order's guiding principle.

Wolfowitz's only crime was taking his institution's international posture to heart. The fact that he has responded to the scandal by hiring a celebrity lawyer and shopping for a leadership "coach" is just more evidence that he has fully absorbed the World Bank way: When in doubt, blow the budget on overpriced consultants and call it aid.

The more serious lie at the center of the controversy is the implication that the World Bank was an institution with impeccable ethical credentials -- until, according to forty-two former Bank executives, its credibility was "fatally compromised" by Wolfowitz. (Many American liberals have seized on this fairy tale, addicted to the fleeting rush that comes from forcing neocons to resign.)

The truth is that the bank's credibility was fatally compromised when it forced school fees on students in Ghana in exchange for a loan; when it demanded that Tanzania privatize its water system; when it made telecom privatization a condition of aid for Hurricane Mitch; when it demanded labor "flexibility" in the aftermath of the Asian tsunami in Sri Lanka; when it pushed for eliminating food subsidies in post-invasion Iraq. Ecuadoreans care little about Wolfowitz's girlfriend; more pressing is that in 2005, the Bank withheld a promised $100 million after the country dared to spend a portion of its oil revenues on health and education. Some antipoverty organization.

But the area where the World Bank has the most tenuous claim to moral authority is in the fight against corruption. Almost everywhere that mass state pillage has taken place over the past four decades, the Bank and the IMF have been first on the scene of the crime. And no, they have not been looking the other way as the locals lined their pockets; they have been writing the ground rules for the theft and yelling, "Faster, please!"-- a process known as rapid-fire shock therapy.

Russia under the leadership of the recently departed Boris Yeltsin was a case in point. Beginning in 1990, the Bank led the charge for the former Soviet Union to impose immediately what it called "radical reform." When Mikhail Gorbachev refused to go along, Yeltsin stepped up. This bulldozer of a man would not let anything or anyone stand in the way of the Washington-authored program, including Russia's elected politicians.

After he ordered army tanks to open fire on demonstrators in October 1993, killing hundreds and leaving the Parliament blackened by flames, the stage was set for the fire-sale privatizations of Russia's most precious state assets to the so-called oligarchs. Of course, the Bank was there. Of the democracy-free lawmaking frenzy that followed Yeltsin's coup, Charles Blitzer, the World Bank's chief economist on Russia, told the Wall Street Journal, "I've never had so much fun in my life."

When Yeltsin left office, his family had become inexplicably wealthy, while several of his deputies were enmeshed in bribery scandals. These incidents were reported on in the West, as they always are, as unfortunate local embellishments on an otherwise ethical economic modernization project. In fact, corruption was embedded in the very idea of shock therapy.

The whirlwind speed of change was crucial to overcoming the widespread rejection of the reforms, but it also meant that by definition there could be no oversight. Moreover, the payoffs for local officials were an indispensable incentive for Russia's apparatchiks to create the wide-open market Washington was demanding.

The bottom line is that there is good reason that corruption has never been a high priority for the Bank and the IMF: Its officials understand that when enlisting politicians to advance an economic agenda guaranteed to win them furious enemies at home, there generally has to be a little in it for those politicians in bank accounts abroad.

Russia is far from unique: From Chile's dictator Augusto Pinochet, who accumulated more than 125 bank accounts while building the first neoliberal state, to Argentine President Carlos Menem, who drove a bright red Ferrari Testarossa while he liquidated his country, to Iraq's "missing billions" today, there is, in every country, a class of ambitious, bloody-minded politicians who are willing to act as Western subcontractors. They will take a fee, and that fee is called corruption -- the silent but ever-present partner in the crusade to privatize the developing world.

The three main institutions at the heart of that crusade are in crisis -- not because of the small hypocrisies but because of the big ones. The WTO cannot get back on track, the IMF is going broke, displaced by Venezuela and China. And now the Bank is going down.

The Financial Times reports that when World Bank managers dispensed advice, "they were now laughed at." Perhaps we should all laugh at the Bank. What we should absolutely not do, however, is participate in the effort to cleanse the Bank's ruinous history by repeating the absurd narrative that the reputation of an otherwise laudable antipoverty organization has been sullied by one man. The Bank understandably wants to throw Wolfowitz overboard. I say, Let the ship go down with the captain.

Naomi Klein is the author of "No Logo: Taking Aim at the Brand Bullies" and "Fences and Windows: Dispatches From the Front Lines of the Globalization Debate."
© 2007 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/51157/

*********
Response from pundita.blogspot.com

Is Naomi Klein nuts? She wants to sink the World Bank. Not before we get names and the amounts stolen.

I don't know what to make of Klein's piece for The Nation. After mentioning a micron's worth of the corruption the World Bank has participated in, she wants to see the Bank go down with Wolfy. Not so fast.

I'd like to ask Ms Klein how she'd feel if, after being the victim of a robbery, the police officer taking her complaint replied, "The attack happened before I came on duty. Sorry; I can't help you."

That's what happened to a Congolese who asked then-World Bank President James Wolfensohn whether he could investigate all the money stolen from the Bank -- and the Congolese people -- by Mobutu Sese Seko.

Wolfensohn replied, "[...] The question of where the money went and what the objections were at the time is something I can't really answer seeing as I wasn't around."(1)

The reply is a window on how the World Bank has aided and abetted some of modern history's worst dictators. The World Bank doesn't need to be shut down. It needs to be investigated. There needs to be a commission set up, along the lines of the commission that investigated the UN Oil-for-Food Program.

At the least, a class action suit needs to filed against the World Bank so that the publics in countries that contribute to the World Bank, and publics that were outright victims of World Bank corruption, can learn the names of Bank employees who were involved in the largest Bank corruption deals.

And now that the Bank is finally making a pass at tackling corruption, the US Congress and the European Parliament need to get involved in reviewing the Bank's anti-corruption guidelines.

Paul Wolfowitz was on the right track in putting teeth in anti-corruption measures, but his decisions on which corrupt government to penalize were based more on emotion than a comprehensive plan and thus, counterproductive.

What should emerge from all the fireworks concerning Wolfy's tenure is a set of anti-corruption guidelines that can be used as a model for all other development banks.

But above all, the past should not be buried by shutting down the World Bank -- at least, not until much more light has fallen on the past.

1) BBC Forum, 2000

Posted by Sameer Dossani at 04:34 PM | Comments (6226)

Bad, bad Boys and Girls. Steve Clemons has some good stories on the boy and girls of Mr PW.
In his Washington Note blog, he writes:" Even Wolfowitz has been infuriated with a few judgment lapses by Kellems -- with reports of Wolfowitz screaming at him on the phone in Brazil for private misbehavior that also seriously delayed the World Bank delegation and plane flight."

Wonder what is the definition of "private misbehavior" for the son/spinmeister from Ohio? Is it as naughty as Randall Tobias ? Anyway we learn also in the same blog that Ms Cleveland will face the Panel to explain about the faked e-mail conundrum that Alex has reported on April 26th. Stay tuned - the afternoon may get busy

Posted by The Beaver at 03:21 PM | Comments (3)

Apologists What part of the definition of nepotism don't the apologists of Wolfowitz understand? It is sickening to listen or read that it is only a mistake or a mis-step on Wolfowitz part because he didn't know the rules of the Bank. Come on, even a peasant knows what the word "bribery" means when he is paying for favours.

However, this is not the mantra that his neo-con friends have been broadcasting during these past two weeks, after the man himself has recognized that he has lost the confidence of the staff, contributing donors and civil societies and did apologize for his actions. According to Kevin Hasset: "while Wolfowitz made a "misstep" intervening on his partner's behalf, it wasn't a big one."
If the act of nepotism or its consequences were not illegal , then I wonder what constitutes good governance in the work place, let alone in an IFI :-)

Posted by The Beaver at 02:54 PM

Hiding behind Africa Andrew Young, an op-ed in Monday's Washington Post leading to a penultimate paragraph that looks as if Bob Bennett, Paul Wolfowitz's spokesman, was busy over the weekend pushing the "it's a small matter, really, nothing to get upset about" argument, speaks about the distinguished American's travels with Paul Wolfowitz in Africa. The facts are somewhat less flattering.

Paul Wolfowitz went to Africa for the first time in his long life in international affairs, only after he got the job at the World Bank, a conspicious statement of where his priorities were. There, he has used his World bank position for relentless photo ops and tourist ventures into Africa ever since.

Why? So he could re-label himself as "Mr. I Help Africa" instead of "Mr. Blood on My Hands Iraq". Thousands of dollars have been spent on this utterly deliberate "24/7"'media campaign, under the direction of Kevin Kellems. The World Bank website was forced to carry story after story about him, far out of proportion to what was newsworthy. Photographers and video cameras accompanied PW everywhere while he learned the simple basics about Africa that every other development expert already knew. Preparation for these trips took up so much time that country directors were left trying to figure out how to avoid his self-centered visits so that their entire operation would not be tied up and hijacked for weeks on end. Their work programs literally stopped to accommodate his imperial needs, his security detail, his videographer, his entourage (Robin Cleveland often tagged along when maybe she should have been working on the budget and strategy, three times rejected by the Board.)

And when "President Wolfowitz" arrived, he never even asked what he could do to help them with the government, as Jim Wolfensohn always did ("What do you want me to say or do? What do you need? Use me"). He made fatuous statements on arrival, as if he was a head of state. Journalists complained of "Arrival Statement Spam".

African governments have a problem speaking out right now. The important countries with independent means have been CONSPICIOUSLY SILENT: no comment from South Africa's Trevor Manuel beyond the most neutral ("The Board process should proceed.'). No support has been offered. Same with Nigeria.

The smaller client states that depend on World Bank loans for their stability (think of all the bunched up African loans now pending at the Board before end of year) were been forced and manuevered into compromising statements during the Spring Meetings, and any diplomatic nuance they may have tried to use in them has been stripped out in the stories posted on the World Bank website. (External Affairs professional staff complained bitterly about being ordered to post an article on the Bank's official website during the Spring Meetings with the headline, ""African Leaders Support Wolfowitz". ) The small states are hostages.

And the states with corrupt leaders are leaning back, enjoying the spectacle, knowing that the next time the World Bank country director walks in to say that they have to deal with nepotism, favouritism, public sector reform, ghost workers or corruption, well, they will just be able to say, "Clean your own house first." This has been much commented on in the African press and by civil society, and in a stinging editorial in the newspaper of record in Kenya.

Bottom line is that any head of the World Bank will champion Africa, that is the job description right now. This president is a neophyte on the issues and utterly expendable.

In fact, the future of IDA depends on it. There is no way to raise $30 billion from the US Congress and other parliaments with Paul Wolfowitz at the helm of the World Bank.

Posted by Deep Insider at 01:29 PM

Who we are - Shannon Lawrence Shannon Lawrence works with International Rivers Network as Lao Program Director and policy analyst. Before joining IRN, she spent five years in Washington tracking the World Bank for Environmental Defense.

Posted by Shannon Lawrence at 08:33 AM

Is standing-down un-American? PW should consult his friends, who are managing Public Corporations, about good governance in the aftermath of corporate flame-outs . He has already shown that he lacks the emotional intelligence required for his current position and yet, according to the Telegraph he told a friend last week: "I'm seeing this out. I'm going to ride it out." In the same article in the Telegraph, it is mentioned that: ”Insiders say that even the US treasury secretary, Henry Paulson, is convinced that Mr Wolfowitz should resign because his behaviour would not have been appropriate in a multinational business.”

Through the 102 page document released to the Ethics Committee, he has proved that he is clearly not suitable for the job when he requested advice from the ethics panel on the possible conflict of interest that Riza might bring by working there. Anyone vying for a high-level position in Corporate America or International Organizations is aware of workplace fairness and ethical code of conduct . Neither Wolfowitz nor Riza is a Junior employee on his/her first job and they should have known better than to try and push the envelope thus far. Alas arrogance and the fact that they succeeded to get through their own agendas in 2003 made them think that no civil servant would dare question their actions.

Before he goes in front of the board tomorrow, may be he should take the advice from FT: “How to quit with admirable aplomb”. After all he should remember these words from the late John Kenneth Galbraith (who must be chuckling in his grave) : "Anyone who says he isn't going to resign, four times, definitely will”

Posted by The Beaver at 03:06 AM

What have they been smoking? Clearly Paul Wolfowitz's spokesman Bob Bennett has been busy today, trying to divert attention from his client's actions and the ensuing cover-up. As if Shaha's extraordinary promotion/raise/secondment and ghost job weren't bad enough, the Big Bad Bennett is huffing and puffing about other World Bank salaries and perks. That, of course, is not the issue.

What is the issue--are you listening Paul and Bob--is the shoddy corporate governance Wolfowitz and his cronies have brought to the World Bank group since he arrived two years ago.

The hypocrisy becomes even more obvious when one contrasts Paul Wolfowitz's actions with the most recent, and, um, delayed report from the World Bank Department of Institutional Integrity. INT, you'll recall, has been in the safe hands of Wolfowitz crony Suzanne Rich Folsom since late 2005. Even as acting, Suzanne's prior claim to fame was organizing prayer breakfasts for George and Barbara Bush (parents of the gentleman who took a man "who couldn't organize his own desk" and made him World Bank President two years ago.)
The smoke Bob Bennett's been blowing today should be contrasted with INT's latest report, where the words speak for themselves about how Wolfowitz and Suzanne say one thing, and do something quite different.

Contrast this with Selected Quotes from the World Bank Institutional Integrity Department's Annual Report for FY05 FY06

Paul Wolfowitz, President, World Bank Group

This report details the steps the World Bank is taking to …promote the highest standard of conduct amongst our staff….

We must ensure that Bank staff continue to maintain high standards of conduct. The overwhelming majority of people working in the Bank Group are exceptionally dedicated professionals, but recent corporate scandals around the world have shown that the actions of even a very small number of individuals can tarnish the reputation of an entire organization [emphasis added]

From the INT report

[Our goal is to] Encourage the highest standards of personal honesty, integrity and ethical behavior within the World Bank….

To credibly promote good governance and anticorruption worldwide, one needs to start with best practices at home. Recognizing this, the World Bank has also looked inward to stamp out conflicts of interest and any possible corrupt practices among its own staff [emphasis added].

Paul Wolfowitz, Remarks to the Business for Social Responsibility Conference, Washington DC, November 4, 2005

“But punishing corruptors isn’t the only solution. In fact, it probably isn’t the best solution. The best solution is in fact improved transparency, improved accountability, so that corruptors know ahead of time that they can’t hide. Prevention is much better than the cure. Businesses and civil society organizations can play an important monitoring and advocacy role here, so can the press. And anyone who says that the issue of press freedom is purely a political issue that has nothing to do with development, I don’t think understands just how important accountability is to preventing corruption, and just how serious a threat corruption is to the development process [emphasis added].” (p.25)

Couldn't agree more on just how important transparency, disclosure and accountability are. And in the next 48 hours, the Board will have the opportunity to confirm that, big time.

And a little Update here: IT staff and others who should know confirm that someone working for Suzanne on Thursday afternoon did, indeed, ask at least four IT staff for non-disclosure agreements. They were reportedly not related to email, but to another very secure database associated with another investigation seemingly unrelated to The Current Situation. What is interesting is that INT did not realize how any request to read or access anything would be interpreted by honest Bank staff. So while this incident does not appear related to emails and leaks, you have to wonder why all those PR and former EXT people Suzanne has over there didn't see how inopportune and inappropriate anything seen as furtive and secretive would have appeared.

Posted by Deep Insider at 02:28 AM

Wolfowitz threatens to sink the ship along with himself. It seems that those who naively thought that Wolfowitz cared about the bank or its reputation are coming to a rude awakening. Wolfowitz and his lawyer and spokesman Robert Bennett, are - and not very subtly - threatening to sink the bank in the process of trying to save himself if need be. Bennett, according to the New York Times today, " .. indicated that he was prepared to keep the temperature raised if necessary, possibly by demanding release publicly of the salaries and perquisites of others at the bank."

In other words, The very president of the world bank is threatening to violate the privacy of bank staff, not to mention basic decencies. The board should add that to the growing list of reasons why he is not fit to lead the institution.

For those interested, here is where you can find a link to Bank salary bands.

Bennett seems to me to be hinting that he wants a deal. The deal he wants will look something like this: 1) The board needs to back down from forcing Wolfowitz out, 2) accept a shared responsibility for the whole Riza debacle, 3) Wolfowitz will agree to go out quietly in few weeks or months without being publicly humiliated.

The problem is that leaves the whole issue of the credibility of the bank far from being addressed. In fact, it will simply sink it further.

Whatever happened to accepting any remedies the board will propose ? we hate to say it, but we told you so

Posted by A Washington source at 01:45 AM | Comments (327)

A testing week for Merkel and Brown Will Chancellor Merkel of Germany, and Gordon Brown, with his leadership of the UK almost a certainty, have the mettle to stare down the US over the Wolfowitz debacle in the next few days? Merkel is the US to meet Bush tomorrow and will no doubt face questions on the issue. So far Germany has been the strongest of the European nations in calling for him to go. Wednesday will be Browns first public opportunity- on a panel he is due to share with Wolfowitz himself.

On that day a high profile conference on Education for All will take place in Brussels. Before the recent events overtook the agenda, the main news was that despite Mr Brown's best efforts his G7 colleagues have completely failed to increase their aid to education.

Now rumor has it that Mr Wolfowitz will not turn up. Either way, no doubt the assembled press will be keen to hear Mr Brown's views, not just on Mr Wolfowitz but also on his long-standing public position that the next president of the World Bank should be democratically chosen.

Posted by 'Barry White' at 11:37 PM

Oxfam tells Wolfowitz to go. Oxfam, the anti-poverty charity, on Sunday finally joined the campaign for Wolfowitz' ousting. In a statement to the Financial Times, Jeremy Hobbs, executive director of Oxfam International, said the Bank’s mission to fight poverty was being "deeply compromised" by the ethics dispute. "We believe that the World Bank's ability to act as a leading development institution has already been so damaged that Mr Wolfowitz's continued presidency of the World Bank is untenable," he said.

Posted by Jeff Powell at 11:06 PM

Cronies Abandoning Judgment, too? ...Bank staff are shaking their heads now about about whether Wolfowitz appointee, Czarina of Institutional Integrity, Suzanne Folsom, too, has lost her mind.

Two weeks ago, after news of Shaha Riza's 2003 trip to Baghdad with SAIC at the direction of boyfriend Paul Wolfowitz's office, Suzanne told Bank VPs that the trip to Baghdad was just fine since Shaha had told her supervisor. That turned out to be false, as her boss at the time, Jean-Louis Sarbib, has subsequently told the press. Has Suzanne no shame?

The professionals in INT, which include former practicing lawyers and prosecutors, US Attorneys (and not a few of republican bent) must be deeply concerned about their future with this kind of suck-up leadership. Everyone familiar with Bank conflict of interest rules knows they would be fired for failing to tell supervisor that they were going with a defence contractor on a DoD mission. Surely the Audit Committee will agree, based on Sarbib's public statement that he didn't know and wouldn't have allowed it.

Well, isn't it a conflict of interest for head of INT to be counselor to President, a title Ms. Folsom has conspicuously dropped using on her emails in the past ten days? What's she counselling Paul Wolfowitz on these days? And how good is her advice?

Let's remember this is not just about what the Board circulated on April 13. There was the whistleblower letter of January 2006 that the Board blew off, too, where the facts were all laid out. Paul Wolfowitz told the Personnel Committee all about the facts then, but they are in a strictly confidential minute of that meeting.

Meanwhile, on a beautiful Sunday in Washington, Wolfowitz hired-hand Bob Bennett seems to be having a quiet day, taking brunch somewhere perhaps, perhaps looking for some more Alice in Wonderland to quote to anyone who will take his calls. After all, that's what Paul Wolfowitz is paying him for.

But the issue remains corporate governance and the fitness of a chief executive to lead an organization, any organization, with these ethical lapses, abuse of power, conflicts of interest, and cover-ups. Last week, the Dean of Admissions at MIT resigned, as did the head of USAID. No lawyers, no procrastinating, no defiant statements. They just went quietly. And promptly.

What is Suzanne Rich Folsom counselling Paul Wolfowitz to do? With the Bank's Ethics Officer forced out, there's only Suzanne, Director of Institutional Integrity, to turn to. Not very encouraging...

Posted by Deep Insider at 04:18 PM

A solution for the World Bank? A senior Bank staffer has suggested a sensible way forward. Wolfowitz should resign, and managing director Graeme Wheeler should step in as acting president until such time as the Americans and the Europeans can agree on an open, transparent and merit-based selection process for Wolfowitz' successor.

Under this plan, Wolfowitz would resign and Wheeler would step in as acting president. My source says Wheeler is a capable pair of hands to guide the Bank through challenges on the immediate horizon such as the IDA replenishment process.

This would take away any excuse that the Americans might have that 'there isn't time' to end the carve-up that gives the right to select the head of the Bank to them and the right to name the head of the Fund to the Europeans. And while the Americans and the Europeans are at it, they might think that systems for evaluating the performance of the president would be a useful addition.

Following Wolfowitz, those he appointed through improper processes, or who are unqualified for their posts, or who have acted unethically since their appointments, should resign or be sacked. This includes (at least) Robin Cleveland, Kevin Kellems, Juan José Daboub, Ana Palacio and Suzanne Rich Folsom. (With the savings from losing this dead wood for a while, the Bank might just be able to afford Wolfowitz' severance package - eds.)

Wheeler would then be charged with working with human resources to replace needed posts in an open, transparent, merit-based manner following Bank protocols.

Looking forward to comments on this one.

Posted by Jeff Powell at 11:56 AM | Comments (6)

Will he show? Next Wednesday: a donor's meeting on education in Brussels, hosted by Gordon Brown, Louis Michel and... Paul Wolfowitz. Officials are proceeding on the assumption that Bank's president will show up, but are not looking forward to a press conference where Brown will be asked about Blair, Michel about his imminent return to Belgium politics, and Wolfie about funding for primary schools (not).

If you're interested: VIP corner of the Berlaymont at 13.00 on 2 May.

Posted by David Steven at 11:31 AM

Job offer waiting for Wolfowitz? Pendennis, commentator for UK paper The Observer, has been told by Bank sources that Wolfowitz "can look forward to a warm welcome from petroleum and energy company Halliburton, should he wish to work there." "They admire him greatly," says the Bank source.

Hmmm... you don't think this has anything to do with Wolfowitz' tinkering with the Bank's strategy to deal with climate change, do you?

Halliburton has just moved its offices to Dubai from Texas from where, coincidentally no doubt, there is no extradition treaty with the United States.

Posted by Jeff Powell at 11:28 AM

Salaries covered up. And uncovered. The Independent on Sunday reports that in a letter written in response to a "brief conversation" and dated 13 July 2006, the bank's human resources head, Xavier Coll, told Mr Wolfowitz that it was "virtually impossible" to shut off access to individual salary details, although some staff had had their access "revoked".

As a service for wbp.org readers, we provide the link to Bank salary bands.

We might point out, for example, that Elena Segura, appointed senior legal counsel by Wolfowitz-appointee Ana Palacio only months after Segura had passed the bar, is likely paid somewhere between $92,000 and $168,000 per year. Tax-free. Nice little first job, huh?

Oh. The cries of the poor.

Posted by Jeff Powell at 11:19 AM

Five million a year for Wolfowitz' security. Today's Telegraph reports that Wolfowitz' personal security detail is costing the World Bank (read: developing countries - ed.) five million dollars a year.

A senior Bank source told the UK daily: "It's a huge sum. We shouldn't have to be paying to protect him." A former senior employee added: "When his predecessor, Jim Wolfensohn, went on foreign trips, even to the Middle East, he was invariably met by the local country office driver, who would pick him up in a battered Volvo. Now, everywhere Wolfowitz goes he has to be accompanied by personal protection people."

The story adds that Wolfowitz's decision to open an office in Iraq has inflated the security bill. An anti-corruption specialist whose organisation works closely with the Bank said: "It costs a fortune. The staff sit in the green zone in Baghdad. They have to go everywhere by helicopter and they have a private security company to protect them."

Posted by Jeff Powell at 11:07 AM

The weekend cometh If he's not gone by Monday it will be death by a thousand leaks, which have now reached Iguassu-like proportions, there are so many flowing together and crashing to the turbulent water below.

It turned out that the rumor about Suzanne Folsom's attempts to get IT staff to read email had no one to confirm it. Bank IT staff were quick to say they don't do that and wouldn't unless it was properly authorized. Of course not. The flurry may have something to do with Suzanne's fears of unauthorized leaks from INT itself, so if anyone has any insights...

The ad hoc committee is keeping mum about the progress of its drafting to send something for the full Board to read and digest.

Paul Wolfowitz, accompanied by his defence attorney cum spokesman (a fulminating fan of Lewis Carroll, according to Bloomberg), will face the committee on Monday and the Board is said to be ready to do the needful if Paul doesn't do the honorable.

Otherwise, President Bush and Chancellor Merkel's press conference after their summit might be a repeat of the Spring Meetings opening and closing scrimmages. With more delectible details this time, including the tasty issue that surfaced Friday from State, via GAP, that Shaha's working at State paid by the World Bank violated US appropriations law. After all, Congress appropriates the maximum an agency can spend, so unless there was some other, specific statutory authority, having her on board for Liz Cheney, paid by the Bank, was illegal. A careful review of the various exchanges between the Bank and State surrounding Robin Cleveland's email also suggests some confusion over how long State expected her (one year) versus how long the Bank was sending her out (two years) and State's subsequent explicit clarification that she was not 'detailed' to them. Funny, 'detailed' is not a word long-time Bank staff use. Sounds like US budget maven language. Anyone work at OMB? Used to work at OMB?

And those lawyers at Justice Scalia's son's firm said that someone else had to opine on whether Shaha's [fill in word] to/at State complied with appropriations law. The job was short, the bill small, and maybe they knew that there was a problem. Of course, moving Shaha to the Foundation for the Future might fix that, even a year late, even though most of its money comes from State, presumably via appropriated funds, too. But as Shaha does not cost them anything there either (still on the Bank's tab), "curiouser and curiouser" as Lewis Carroll might have written. No word yet on FFF's Washington, DC branch mentioned in the Foundation's website--anyone know where the Verizon and PEPCO bills are sent, who the landlord is?

Bank staff, meanwhile, are doing their gardening, going to the kids' soccer games and dodging neighbors with questions. The ad hoc committee continues its work. People will iron their ribbons over the weekend, and those who can't wear ribbons will wear blue, demonstrating unity on the need for good governance and the fight against corruption to start close to home.

Posted by Deep Insider at 09:44 PM

Restoring the credibility of the World Bank, What are your thoughts? ..Its very clear now that the Wolfowitz-Riza affair has dealt considerable damage to the reputation and effectiveness of the World Bank. That is not only the assessment of outsiders, but the assessment of a number of senior officials at the institution itself, as it is clear from the IEG report, and the letter by the governance and anti-corruption group. The question now is what can be done to mitigate that damage moving forward.

Failing to take serious steps to address this issue can hamper the institution moving forward well beyond Wolfowitz and can threaten the very existence of the World Bank.

Here is your chance to express your opinion and give advice to the Bank on what it can, should, and must do to restore its credibility. Use the comments section below to post your thoughts.

Posted by A Washington source at 04:42 PM | Comments (8)

What is Wolfowitz thinking? ... Another editorial from the New York Times wonders "what Paul Wolfowitz is telling himself as he wages an unseemly fight to hang on to his job as head of the World Bank.". The editorial then concludes by advising him that "The best thing he can do for the bank, the country and himself is to step down."

Posted by A Washington source at 03:57 PM | Comments (1)

World Bank Committee Finds Ethics Breach by Wolfowitz... The Ad Hoc committee investigating the Wolfowitz-Riza Affair has almost finished its work, the Washington Post reports this morning. According to three sources cited by the paper, the only remaining point of debate is whether the committee will explicitly recommend that Wolfowitz resigns.

The article says:

"A World Bank committee investigating president Paul D. Wolfowitz has nearly completed a report that it plans to give the institution's governing board, concluding that he breached ethics rules when he engineered a pay raise for his girlfriend, three senior bank officials said Friday."

The missing final piece:

"Friday evening, the committee was debating whether to explicitly recommend that Wolfowitz resign, according to the sources, who spoke on condition they not be named, citing an ongoing probe into leaks"

3 areas of violations:

"A draft of the report reviewed by the committee late Friday declared Wolfowitz had violated World Bank regulations in three areas: breach of contract, breach of ethics rules and undermining the reputation of the bank"

More may come:

"One source said that if Wolfowitz refuses to relinquish his post, the committee could take further action against him. While this report deals only with his handling of the pay raise for Riza, the source said, the committee is prepared to investigate a range of other alleged breaches of ethics and internal governance rules, including contracts for his senior staff."

More:

More is expected from the board on Monday also about the controversial bank strategy on health, nutrition and population which has been manipulated by Juan Jose Daboub, a conservative Christian whom Wolfowitz appointed managing director at the bank.

Posted by A Washington source at 02:32 PM | Comments (5)

Orders to play down 'climate change' came from Wolfowitz' office. US NGO, the Government Accountability Project (GAP) has acquired an internal World Bank document that summarizes a February 2006 meeting of World Bank officials regarding climate change and clean energy. The document indicates that orders to tone down references to "climate change" in an environmental strategy paper originated in the office of Bank president Paul Wolfowitz.

This development comes on the heels of news reports identifying Juan José Daboub, Wolfowitz-appointee and Bank Managing Director, as the Bank official who tried to "water down references to climate change." Daboub was also
exposed by GAP earlier this month as the Bank Managing Director
responsible for removing references to "family planning" in both a
Madagascar-assistance strategy paper and a new health strategy draft.

The summary specifies Wolfowitz' office's involvement after the meeting. The final paragraph of the summary reads:

Feedback from the President's office subsequent to the meeting asked the team to refocus the paper shifting from a climate lens mainly to a clean energy lens.

You can view the summary here:
http://www.whistleblower.org/doc/2007/Wolfowitz%20Climate.pdf

"This revision is yet another example of Mr. Wolfowitz' attempt to align Bank policy with the ideological positions of the Bush administration," said GAP's Bea Edwards.

Posted by Jeff Powell at 11:20 AM

Wolfowitz has damaged US leadership at World Bank. In further signs that US anti-Wolfowitz sentiment is spreading, the Washington Post this morning features an opinion piece from a former US representative on the World Bank's board. He says: "It's embarrassing to watch. It's even more infuriating to think about the opportunity that Wolfowitz has squandered and the jeopardy in which he has placed America's key role in the bank".

The writer - Colbert I. King - recaps the history of the Bank and its presidents going back many years.

"Since the World Bank was created at the end of World War II, the election of an American as president has never been seriously challenged. However, 51 years of unbroken American service at the helm of the largest international financial institution are in jeopardy, thanks to the ill-fated presidency of Paul Wolfowitz. This week, the European Parliament, in an unheard-of action, called for his resignation.

What a fall from grace for the United States".

He says that whatever baggage previous presidents brought in with them (think Robert McNamara) "their on-the-job conduct was beyond reproach".

This is where I part company with the former US executive director. Many of the Bank's presidents have also done unbelieveable harm while in office (for a run-through see Johann Hari's piece in The Independent) The Bank has certainly been used as a tool of US foreign and economic policies and Colbert I. King is disengenuous to pretend that all the US-nominated presidents at the Bank were all sweetness and light while in that office.

But I think all readers of this blog will concur with the following scathing points from King in today's Post: "we have the spectacle of a World Bank president careering from meeting to meeting with groups of subordinates, copping pleas, admitting that he's 'lost a lot of trust' -- even going so far as to offer to bring in a 'coach' to teach him how not to alienate the staff. And next week he goes before a committee of the executive board -- accompanied by his lawyer -- to try to convince those board members that he should keep his job. How low must he go?"

Hopefully he will go from the Bank in the next 2 days, not stoop lower. And surely the absurd US selection process for the head of a multilateral institution will go at the same time.

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Posted by Alex Wilks at 07:22 AM | Comments (472)

Riza job mystery deepens. (Updated) More devastating analysis from the Government Accountability Project. They have closely examined the 102 pages of documents submitted to the Bank's board. Their conclusion: "although the Ethics Committee of the Board directed Wolfowitz to detail Riza to a post outside the Bank and beyond his supervision, in fact, he apparently never actually did this".

Nor could she have been so seconded.

"State Department sources have informed GAP that a secondment refers to a U.S. Government (USG) – International Organization arrangement (U.N., Organization for Security and Cooperation in Europe). A secondment is usually paid by the sending host government. It constitutes, in effect, a budget contribution from the sending government.

This is why Riza could not be seconded – her work would be a budget contribution from an international organization to the Department of State. The USG can second someone to the World Bank and the cost of doing so is attributed to the USG contribution to the Bank. However, U.S. appropriations law does not permit an international organization like the World Bank to make an operating contribution to the budget of the Department of State.

This arrangement was highly improper for both the World Bank and the State Department. At State, USG policy work was given to an international organization employee, and the international organization paid for that activity in the form of its employee’s salary. At the World Bank, rules prohibit Bank staff from working on the political affairs of shareholder governments.

Matters became more complicated when the State Department issued Riza a building pass for unescorted access, without a State Department security clearance. Sources at State say that this is highly irregular and improper.

GAP’s sources state there are no Human Resources records for Shaha Riza at the State Department".

Our readers know that the Riza pay affair - while getting most of the media attention - is only one of a growing list of allegations against Wolfowitz and his senior appointees. But it does seem that even on this one issue hot-shot lawyer Richard Bennett has a hell of a lot of work to do to clear his client.

Andy Martin, writing on Contrariancommentary.com points out what he calls an elephant in the room regarding Riza's Mid-East assignment. He draws parallels with the Bush administration outing of CIA agents He definitely has it in for Paul Wolfowitz, arguing the following:
"Bushies were outraged that Valerie Plame had apparently recommended her husband for an assignment in Niger. Plame’s unpardonable sin: sponsoring her husband, Joe Wilson for a mission to Niger that cast doubt on Iraq’s efforts to purchase “yellowcake” uranium. The Bushies thought Plame’s favoritism was the height of arrogance and corruption, and worthy of public flogging, CIA secrecy or no. And so L’Affaire Plame exploded on Washington, and damaged or destroyed many careers. How can Wolfowitz argue with a straight face that what he did with Riza is acceptable behavior when the Bush Administration has never stopped condemning Plame for what she did with Wilson?"

He emphasises that it is a "pathetic situation" when an institution's president has to hire a lawyer to help him talk to its board. And that Robert Bennett "has represented people-in-trouble in Washington, DC, and he is good at cutting 'deals.' Emphasis on deals".

These deals are what we are watching carefully and ready to denounce if, as expected, they let guilty parties off the hook.

For some audio coverage of the Wolfowitz World Bank issue, check out National Public Radio's piece today.

Posted by Alex Wilks at 08:38 PM

Bennett in Wonderland. Lewis Carroll must be turning in his grave. Paul Wolfowitz’s lawyer (surely spin-doctor, ed.) is trying to get his client out of trouble by comparing the board's investigation process to an Alice in Wonderland episode. Responding to the report that the board committee has already drafted a position recommending Wolfowitz’s removal, Richard Bennett told his favourite outlet Bloomberg: “If this is true, it is grossly unfair. It reminds me of Lewis Carroll's Red Queen who said the alleged thief of the tarts was certainly entitled to a trial, but she suggested they have the sentence first.''

It's been a while since I read the Alice books (think the learned Mr Bennett has got it wrong - the Red Queen appeared in Through the Looking Glass). But I don’t recollect the Red Queen subscribing to a set of Wonderland rules and ethics codes. Nor did she trouble to collect hundreds of pages of evidence.

The imaginative Mr Bennett might like to consider teaching his clients other lessons to be drawn from Lewis Carroll’s stories.

1) if you’re in a hole, stop digging.

2) if your head can’t fit through the door, try expanding the door or shrinking your head.

3) retire and take up croquet.

For a non-fantastical analysis by a different top lawyer, see Walter Todd in Harpers.

More satirical coverage of the Wolfowitz World Bank affair is available in The Spoof.

Posted by Alex Wilks at 08:23 PM | Comments (3)

Ecuador and Wolfowitz Is the scandal creating political space for governments? Is Ecuador’s expulsion of a World Bank staff person related to Wolfowitz dragging the Bank down?

Today’s announcement that Rafael Correa has suspended World Bank aid and expelled a World Bank staff person was a long time coming, but the timing calls up questions of when governments think they can take on the Bank. As this Fox News article explains, the arm twisting which Correa accuses the Bank of dates from one of Wolfowitz’s early directives at the Bank. The directive to pressure Ecuador not to change laws governing oil revenues was 100% in line with U.S. foreign policy – completely coincidentally, of course. See this Bank Information Center article for more details of the original policies. Could other governments use the current situation to follow Ecuador’s lead? I hope so.

Update, Alex Wilks, 27 April 2007
My colleague Gail Hurley, currently in Ecuador, was at the press conference where finance minister Ricardo Patiño made this announcement. She adds the following: "Patiño said that he basically gave the WB representative 72 hours to explain the actions the Bank took in 2005 when it suspended an already agreed loan following reform of the FEIREP law after a parliamentary process. He received no response from the World Bank at all so he declared that its representative was not welcome in Ecuador and was a persona non grata!"

Posted by Sameer Dossani at 08:01 PM

Unsettling times for Wolfowitz allies at the Bank. Worldbankpresident.org readers will be very clear that the problems at the institution spread far beyond Paul Wolfowitz and Shaha Riza. The World Bank president has managed to get rid of half of the senior managers who were there two years ago and install a set of people with worrying political connections and uncertain competence. There are signs that several of them are understandably worrying that if their big boss goes they'll have to follow. Notably Susanne Folsom and Robin Cleveland.

An eloquent correspondent sent me the below.

Cleveland brown-nose
And, though not confirmed, Robin Cleveland has apparently moved out of her office next to Paul Wolfowitz's (and between his and Daboub's) to a nearby, smaller one. Perhaps this is part of the reorganization of his office Paul promised but that was implicitly seen by the VPs as 'not enough and too late'. Her room number is said to no longer be on the Bank's electronic directory, with its very cool "Bankquest" feature that puts a star on the location in the labyrinth of Bank corridors. How will people summoned to be yelled at and cursed find their way, particularly since q473-2179 won't necessarily work if you have to call to get directions?

Thanks for this, please keep them coming. For our previous posts on the characters mentioned here just use this site's search feature.

A story on Susanne Folsom originally posted above has been removed following a strong e-mail received from INT and until we get further information.

Posted by Alex Wilks at 07:46 PM

Is that just the tip of the iceberg? Suspicions have been communicated to us that Juan José Daboub's tinkering with the Madagascar country paper and the overall health strategy may not be the only instances of covert US pressure to influence the Bank's work in health. If you have any further information, please contact us urgently.

Posted by Jeff Powell at 05:32 PM

NGOs worldwide demand World Bank overhaul. Global sign-on letter regarding the current scandal at the Bank demands not only Wolfowitz's resignation but fundamental reforms in the governance of the institution itself.

Global civil society organizations demand Wolfowitz resignation and broader governance overhaul

The World Bank is an institution in crisis. Recent events highlight the failures of Paul Wolfowitz's leadership and are a result of more fundamental and systemic governance flaws at the institution. The legitimacy and effectiveness of a public body depends on its ability to embrace transparency, accountability and democracy in its own decision-making.

Action for Economic Reforms (AER) (Philippines)
AFRODAD (African Forum and Network on Debt and Development) (Zimbabwe)
Bank Information Center (United States)
Bretton Woods Project (United Kingdom)
Center of Concern (United States)
Centro de Estudios Aplicados a los Derechos Económicos Sociales y Culturales (CEADESC) (Bolivia)
CEE Bankwatch (Czech Republic)
DebtWATCH Indonesia (Indonesia)
ECOA (Brazil)
Gender Action (United States)
International NGO Forum for Indonesian Development (INFID) (Indonesia)
MWENGO (Zimbabwe)
New Rules for Global Finance Coalition (United States)
Oil Change International (United States)
People's Alliance for Debt Cancellation (GARPU) (Indonesia)
Third World Network Africa (TWN) (Ghana)
Urgewald (Germany)
WEED (World Economy, Ecology & Development) (Germany)
Womyn's Agenda for Change (Cambodia)

Please provide an organizational sign-on if you agree with the demands and pass on to others who may also be interested. Contact the Bank Information Center to add your organization's name to the list of signatures.

Posted by Jeff Powell at 10:31 AM

New rumours on Wolfowitz departure timing. (Update). A tip reached me overnight that Wolfowitz's departure may be announced before European leaders arrive in Washington DC for Monday's EU-US summit meeting. The Washington Post also carries a comment from "a senior Bank official" saying that the board committee has already decided to recommend Wolfowitz leaves.

Peter S. Goodman, writes in the Washington Post:
"a senior bank official, who spoke on condition of anonymity, suggested that members of the committee had already decided to recommend Wolfowitz's ouster, casting Monday's appearance as a last-ditch appeal before the panel pronounces judgment.

Committee members were circulating a draft of the document they planned to release next week outlining Wolfowitz's ethical breaches and formally recommending his expulsion, the official said.

Such a move would substantially weaken Wolfowitz's hand, though it would not end his tenure. Rather, it would leave his fate to the full, 24-member board of governors."

Other stories carry a message from Wolfowitz's lawyer Robert Bennett saying that the Bank president will appear before the Bank's board on Monday. Bennett may attend, but not speak.

Journalists at the US-EU summit will I'm sure want to ask Bush, Merkel and Barroso about this very messy affair. It seems to prove exactly the opposite of what European Commission president José Manuel Barroso is spinning out ahead of the summit. One line in the release about Barroso's speech in New York today reads: "Europe and the US enjoy deep bonds of kinship, now it is time to deepen our economic partnership".

Wolfowitz, and the US government's dogged backing of their man in the World Bank, is only re-emphasising trans-atlantic differences, differences which Wolfowitz and similar unilateralist thinkers did so much to foster in 2002-2003.

I can't recommend that you rush to the betting shop to put a lot of money on decisive action before Monday, but the chances seem to be increasing. This is not the first rumour of Mr W's departure announcement.

Posted by Alex Wilks at 08:59 AM

Bennett spends his expensive time on the phone with reporters .... Robert Bennett, the newly hired lawyer of Paul Wolfowitz is spending his time -said to cost about $600 to $700 an hour, trying to change the conversation from his client's nepotism and misjudgments charges to how the world bank staff are just upset because Wolfowitz - and of course "his trusted deputy, Suzanne Rich Folsom", as Kevin Hassett generously describes her - are "tough on corruption".

Insiders say that Bennett is also behind the criticism of the world bank staff and their salary structure that is mentioned in these bloomberg articles ( see HERE and HERE ). Many reporters are not biting however. It is still not clear who is paying for Mr. Bennett's time yet.

Posted by A Washington source at 10:48 PM

New challenge from inside the bank .... Members of the drafting and implementation team for the World Bank Group’s Governance and Anti-corruption strategy, which was adapted few weeks ago by the World Bank, have just issued the following open letter to Wolfowitz and the board of directors. The message was also posted in the internal bulletin board of the bank.

Some key quotes: "we are deeply concerned by the impact of the current leadership crisis on the Bank’s credibility and authority to engage with governments, non-government stakeholders, and donor partners".

"The credibility of our front line staff is eroding in the face of legitimate questions from our clients about the Bank’s ability to “practice what it preaches” on governance".

"The present crisis is a critical test of the Bank’s own commitment to the principles of sound corporate governance. Our own governance standards must be upheld and enforced impartially and without exception by both the Bank’s Senior Management and the Board of Executive Directors, even when they touch the highest levels of this institution".

Posted by A Washington source at 09:48 PM

Shaha Riza Never Seconded to State Department. (Update). The folks at The Wolfowitz Must Resign blog, which is maintained by anonymous World Bank Staffers, have dug a little more in the paper trail on Shaha Riza. They point out that ... "In the 102 pages of documents disclosed by the World Bank's Board of Directors, document #17, is a letter from J. Scott Carpenter at the State Department to Xavier Coll, Head of Human Resources at the World Bank. Mr. Carpenter writes, "We take this opportunity to note that we do not view Ms. Riza as detailed or seconded to the U.S. Government". . The question is: why did she have a security clearance then?

Comment from a reader, posted 27 April, 04.00 EST
Hmm ... Riza having access to a site that she needed to be cleared for is a bit disturbing if nobody was responsible for her.

When I contracted for the government my job was provisional based upon my getting cleared. When offsite for a period of time clearances were deactivated and it took a lot of paperwork to get them to recognize that it was the same person again.

To give someone access to a sensitive installation without cause and without them working for the organization is not only not SOP it is a security nightmare! Of course, in this case they had little choice: if they did not take her I am unclear what the next step would have been.

Could the state department be more lax about security than everyone else? :)

Another thing about clearances: they are expensive. Also contracting companies highly prize people who already have them.

Posted by A Washington source at 05:23 PM | Comments (1)

Robin ram raids village on day two. Thanks to Barry White for the update on the driving skills of Robin Cleveland, member of the Wolfowitz praetorian guard. Friends in the Congo tell us she doesn't do much better in a helicopter...

Friends of worldbankpresident with deep roots in the Democratic Republic of Congo are telling us that MONUC (the UN mission in the DRC) helicopter pilots cite a recent incident with Cleveland to explain why their whirlybirds are less than welcome in certain locales.

Swooping in to bestow the Bank's magnanimity upon the people's of one poor community, the helicopter that Cleveland was travelling in blew the roofs off of all the houses in the village.

No word on who paid the bill on this one.

(More information? Contacts in the DRC who can verify? contact@worldbankpresident.org)

Posted by Jeff Powell at 04:44 PM

Wolfowitz-Bennett set the stage to backtrack on promises to accept the board's decision... Wolfowitz , the New York Times reports, apparently sent a letter to the board of executive directors yesterday accusing them of treating him "shabbily and unfairly,". This echoes Bennett's words before about his fear that Wolfowitz is not being given a chance to defend himself.

Knowing full well that this issue is not a legal issue and can't be resolved in a court of law, the Wolfowitz - Bennett tag team seem to be trying to set the stage for them to backtrack on Wolfowitz promises that he will "accept any remedies they ( the board of executive directors) propose". Wolfowitz and Bennett are also trying to buy more time. One reason may be that they want to wait for the EU-US summit meeting next week, where the Wolfowitz issue will likely come up as per the request of the EU parliament. Dick Cheney and George Bush may still come to the rescue of their disgraced Wolfie, the World Bank credibility on the other hand, seems to be the furthest thing from Wolfowitz's mind.

See also Alex Wilks' post from earlier on the progress of the Bank board's deliberations and a possible deal that is being discussed.

Posted by A Washington source at 03:26 PM

More on Palacio dodgy dealings. Our diligent readers devoted to the truth have provided more evidence to the suggestion that Wolfowitz-appointee, general legal counsel Ana Palacio, has been following her boss' lead when it comes to hiring practices.

Elena Segura Labadía - appointed as the only senior legal counsel in Ana Palacio's office - apparenlty has nearly zero experience in law. Elena finished her studies in law in late 2005 and shorty after she registered at the Madrid Bar Association on 16 December 2005 - just after taking her position with Ana Palacio's office. See this link to the Madrid Bar Association for confirmation.

Previous to taking her very very senior legal position at the World Bank, Elena Segura worked for Ana Palacio as her assistant at the Spanish Parliament from May 27, 2004 to August 2006. According to our source, the assistant's job is usually done by students or recent graduates in Spain (which Segura was).

Here is the link to the Spanish Parliament informing them that Segura would resume her work as assistant to Ana Palacio in August 2006. Once again according to our source, this work would usually be understood to be taking care of Palacio's agenda and other personal issues. Besides this, Elena apparently has no job experience at all. Now I wonder how much senior legal counsel Segura is being paid at the Bank to do Palacio's dry cleaning?

Remember that Palacio was touched on the shoulder by King Wolfowitz in June 2006 after the resignation of former general legal counsel Roberto Dañino. Dañino left after falling out with King Wolfowitz, rumoured to be over the generous nature of Wolfowitz's contract, especially the termination allowance (that one is going to come in handy!) and retirement benefits. Back of the envelope calcualtions suggest that it will cost the Bank about a million to get rid of the Wolf (money well spent in our estimation -eds.) Perhaps not surprisingly, former general legal counsel Dañino was one of the signatories of the historic open letter in the FT from over 40 senior World Bankers calling for Wolfowitz to resign.

With questions already being asked about Palacio's discomforting proximity to the president, these latest revelations about dodgy hiring practices should surely be of interest to the ad hoc group, and may be making Palacio's mood a little less than cheerful.

Overheard by Bank staff in the elevator this morning - one colleague commended another, a stranger it seemed, for her blue ribbon. They turned to a third colleague who was ribbonless. The doors opened at 8 and she stepped out. "Our managers have told us, informally of course, that we should not wear ribbons." Surprised, one of the ribbon-wearing ones said, "that's terrible. Why?" to which the other said "well, we're in Legal, and the General Counsel wouldn't be very happy, we're told."

Got that right counsellor.

(Don't let her keep you down, tell worldbankpresident.org. And in response to anxiety from others, our IT guru says that, depending on the Bank's internal systems, it is possible to locate a hotmail account to a desk. Do you Yahoo!? Outside the Bank please.)

Update, 26 April (Alex Wilks)
A correspondent in the Bank writes in response to the above post:

"Palacio's appointment is dubious on two grounds:

(a) When Palacio was hired last year as a consultant to PDW, there was objections raised by the then Ethics Officer (Ms. Maria Borrero) on the "conflict of interest" grounds because Palacio was still maintaining a political office in Spain. Soonafter, Folsom's Office (INT) showed the Ethics Officer to the door.

(b) Palacio was hired as a reward to her endeavors for making Spain join the "coalition of the willing" to fight the war in Iraq. [So is Muasher's appointment at a "senior" level]. Incidentally, compare Palacio's legal credentials to those of her eminent predecessors: Danino and Shihata.

Now, Palacio is following the lead of her neo-con artist boss by appointing unqualified but loyal cronies to her office, and the entire Legal Department is up in arms!"

Posted by Jeff Powell at 03:24 PM | Comments (1)

Bank high-ups turn deaf ears to Wolfowitz's overtures. The New York Times reports that "the bank’s vice presidents have rebuffed his request for them to set up a committee to advise him on improving his management style. The vice presidents did not want to be co-opted into helping his campaign to stay in office, bank officials said".

Someone writing into worldbankpresident.org overnight added the following colour to this story: "Wolfowitz's new offer, to have a one-hour open door policy each day at 3 pm has little traction. 'And you can come to see me alone for 10 minutes.' Did not go over well with the VPs Wednesday morning. Perhaps he'll offer cookies and brewed coffee tomorrow to see if he can peel a VP off from the ranks".

At the same time Wolfowitz is said to be hiring a personal security agent with a mission to protect the man himself. If you're reading this inside the Bank and are somehow interested in this job you can click this Bank intranet link. Some in the Bank are wondering why this is only being advertised internally.

Ward Harkavy over at Village Voice picked up on this story and adds some suggestions of someone who might be perfect for the job. But he provides snippets from World Bank staff who warn "The position description calls for 'protecting the principal from physical threat or embarrassment.' In all fairness, Mr. Wolfowitz, I think it's WAY too late to protect you from embarrassment". I couldn't agree more.

Posted by Alex Wilks at 12:59 PM

Bank staff turn amateur detective. As I'd hoped, some Bank staff took time to play amateur detective at their desks and see if they could replicate the mail discussed in my post of yesterday. Below are their results. If dodgy documents have been produced before the board that will surely be a very serious blow to the defence. But, regardless of that the point raised by several people below is surely devastating. Since when do draft e-mails count as evidence? Is it OK to tell a court something that you meant to say, but failed to?

Amateur detective 1
I test-printed a draft email. When you print a draft email, only the subject line prints (or at least it did for me). Meaning, it should NOT arouse any suspicion that this lacks a to line, cc line or bcc line (try out your own printing of a draft email and compare). These did not print for me even when I filled in the "To" line with a name drawn at random.

Nearly everything about Robin Cleveland's email, to me, looks almost exactly like an actual draft email EXCEPT that (as was pointed out), it has a 7 digit phone number with that puzzling q in front; and that the icon did not print out. (You know that picture/icon thing that everyone in Lotus Notes has to personalize their own letter heads?). These do seem odd. Also: someone else, please print out a draft email and tell me if I'm imagining this: does the text size of the date in Robin's email seem a little large to you? Before you answer, make sure the PDF file is set to 100 percent on your screen, not 114 as it initially was on mine. I tried to print the relevant page but for some reason it wouldn't.

For me, the larger concern, though, is why a mere DRAFT email is presented as evidence in a matter so sensitive as this, and not the email that was actually SENT. I hope the Board asks to see the version of the email that was actually SENT."

Amateur detective 2
"Some comments on your post and the draft email:

The phone number doesn't appear at all in the header of a draft email. I'm not sure why it's there in the PDF, neither why your correspondent says it should be in its short form.
Neither does the word "***DRAFT***" appear in a draft email.
Neither does the word "EXC" - which represents the unit to which Ms. Cleveland belongs to.

The name of Robin Cleveland should appear as "Robin Cleveland/Person/World Bank", its default format in Lotus Notes, if not edited after being pasted in Word.
"To" and "cc" appear by default, even if the fields have not been completed. The field "bcc" also appears by default when printed directly from Lotus Notes.
It is impossible, in Lotus Notes, to add the phone number, unit and "***DRAFT***" where it is in the PDF. This means that the draft probably was first copied in Word.

The left margin in the header is normal. This tells me that it's probably been indeed copied from a draft first and then edited, not made up from scratch, except by someone very careful to copy the quirks of Lotus Notes, but then add impossible stuff like a phone number and a unit acronym.

To me, it's clear that the header of the draft has been edited to appear as it now does. I am unable to make the same claim for the content, but can say that it is a possibility.

The question remains of why the Board received a draft. The WBG archives all its emails for a very long time, even if the staff has deleted it as far as I know. If this one has been sent, it could be found even if both sender and recipient have erased their copy. But then again, is anybody pretending that this email has ever been sent?"

Summary of the evidence
"There are more such mails. Someone in the Bank kindly summarised what he/she sees as the state of the debate/the evidence. Here it is.

1. Someone thought it odd that there was no picture/icon to the left of Robin Cleveland's name and phone number. Most internal emails have some kind of logo, generally chosen from a stock range of options.
But then someone else pointed out that there is a way to set this logo to completely blank (or at least blank for when you print out emails, I'm not clear which), so that took care of that idea.

2. Someone thought it odd that there was no "To", "cc", or "bcc" line printed, either at the top of the page or at the bottom of the page. But then it was concluded that these apparently only print (at least for draft emails) if you have an automated signature set up. If you don't have that set up, then these things don't print EVEN IF YOU FILL IN THE LINES with people's names/email addresses. In the absence of an automated signature, only the subject line prints -- just as in RC's email.

3. Someone thought it odd that the subject line was too high up. But if you don't have the automated signature (thereby stripping the to, cc, and bcc lines from the print version) then that's exactly where the subject line belongs after it prints out.

4. Someone wondered if the font size looked right (thought maybe it looked a little large on the screen), but was unable to print that page for the purpose of direct comparison against a freshly generated draft email. Someone else checked and said the font looked right on their end.

5. Someone asked why there was no thing at the top saying "?Click This Button to File in IRIS ==>" ...
but someone else said they don't have that in their email either, so it's not just Robin Cleveland missing that thing.

BUT, this still leaves the following questions:

6. We were still puzzled why her phone number has 7 digits instead of 5. As was pointed out to worldbankpresident.org, 5 digits is more usual for internal phone numbers because that's how our internal phone system is set up.

7. We were puzzled why that letter q is at the start of the phone number.

8. And we wondered why Robin submitted a DRAFT version of her email instead of the version that she actually SENT.

I'm at a loss how to explain #6 and #7 But, personally, I think the more serious concern is #8.

The idea of a Word-generated forgery seems odd to me.
So many other details are EXACTLY right, including the font and the positioning of the subject line -- at least for people without an automated signature, not for those who do have that -- so why suddenly flub the phone number?"

More such comments are coming in thick and fast. I'll get them up when I can.

Posted by Alex Wilks at 12:30 PM

CIVICUS calls for Wolfowitz to resign, and demands that the leadership selection process be fixed. Kumi Naidoo, secretary-general of CIVICUS - an international alliance of civil society organisations - has called for Wolfowitz to resign.

Quoting from Naidoo's 25 April press release:

Civil society’s views on the current leadership crisis at the World Bank has to do with both short and long term issues of legitimacy and accountability. In the short term, the issue has to do with whether or not President Wolfowitz should resign for more than one reason. First reason is he breaking of staff rules to ensure that his partner got vast salary increases. Yet a second reason to question Wolfowitz leadership is the lack of both substantive and procedural accountability of his senior appointments that lead selective attempts to push back strategies on family planning and climate change.

If there is one good thing that can come out of the current leadership crisis of the Bank it should be this: that the new President of the World Bank should be appointed via a global search, not restricted by nationality, and not at the behest of the President of one member state of the World Bank - even if they are the major financial contributor. For this to have any substance the voting shares on the Bank’s Board must be made more equitable and the Board needs to understand that they are not there to advance the interests of the dominant financial contributors but to fulfil a global mandate, which is A WORLD FREE OF POVERTY -- a slogan so prominently displayed at the Bank’s headquarters.

Posted by Jeff Powell at 10:39 AM

The Ad Hoc Committee: who they are and what they are thinking. Until now we have not clearly told you which government representatives make up the Ad Hoc Committee established by the World Bank board to look into the Wolfowitz allegations. The board members are the French, Dutch, Norwegians, Chinese, Russian, Mexican and Ethiopian. The New York Times has interesting insights on where they stand in their deliberations and on the Bank president's efforts to slow them down.

In the words of the Washington Post's Al Kamen: "several Wolfowitz detractors and precious few supporters". Norway's development minister, for example, told Reuters yesterday in Oslo that "there is no doubt confidence in World Bank leadership has been undermined," and Wolfowitz "will have a very hard job to repair this confidence."

As we told our readers very rapidly last Friday, the board ad hoc committee is now investigating several conflicts of interest and potential breaches of Bank rules - not just the Riza affair.

Wolfowitz has been making desperate public appeals, trying to undermine confidence in the committee's procedures. Steven R. Weisman in the New York Times, for example, provides extracts of a letter sent by Wolfowitz to the committee's chair. Wolfowitz has the gall to accuse the committee of acting "shabbily and unfairly" and asking to appear before them next week in the name of good governance at the Bank. The Times says many board members were "taken aback by the tough tone of the letter" but thinks the board might allow Mr. Wolfowitz to appear before them next week, though not necessarily with his newly hired lawyer, Robert S. Bennett.

As for the final conclusion of the board's deliberations? The Times quotes a senior European official who thinks there could be a deal avoiding a censure of Mr. Wolfowitz but that it had to involve Mr. Wolfowitz leaving the bank.

Cutting a deal to disappear from the Bank while trying to save face? Not what most people would consider good governance. In fact exactly what I would consider to be a shabby result, Mr Wolfowitz.

Obviously if any readers have connections to the above-mentioned Bank board members, or their governments back home, we would encourage you to contact them and encourage them to reach a clear and open verdict, and to get this over with quickly.

Posted by Alex Wilks at 08:18 AM

We're in the papers! worldbankpresident.org media mentions. We've been busy bringing you the latest on this ever-expanding saga, sifting your correspondence and doing the other work we had planned for these weeks. But a number of people have been telling us that this website has been picked up across the world's media.

We have noticed that several journalists have been using material and specific phrases from this site and are very happy with that. Even happier that several outlets have been mentioning the site itself so their readers can come and help themselves. Here's a selection.

Web site revived to speculate on World Bank chief, Reuters, 14 April.

Wolfowitz Under Fire, The Guardian, 14 April.

Politics goes net around the world, Australian IT, 24 April.

Politicians lost in cyberspace, Globe and Mail, 19 April. This Reuters story also appeared in the Sydney Morning Herald, Brisbane Times, The Age, The West Australian, Mail and Guardian, Washington Post and several others.

Wolfowitz pledges 'major changes' at World Bank, Earth Times, 24 April.

Wolfowitz-Affäre: Weltbank wollte Klimawandel totschweigen, Der Spiegel, 25 April.

We were covered in a story by major German newswire Deutsche Presse Agentur (can't find the link right now) and as a result are picked up in other German papers today, including Westfälische Nachrichten.

If we've missed some (except blogs, we can't note all of them - sorry) then please let us know. contact@worldbankpresident.org

Posted by Alex Wilks at 06:58 AM

World Bank, SAIC, and the Iraq occupation authority.. its nepotism galore ....Andrew Cockburn, witting for the The Guardian today, mentions an earlier attempt by Paul Wolfowitz to place Shaha Riza in the Iraq occupation administration of Paul Bremer. Cockburn explains that Wolfowitz " did his best to secure a high-level position in the administration of the conquered country for Riza".

In his article, "The puppet who cleared the way for Iraq's destruction" , Cockburn writes:

"Earlier Wolfowitz had manoeuvred to have himself appointed as viceroy in Iraq. That effort failed. But a newly revealed inquiry by the Pentagon's inspector general found that, in a foretaste of things to come, he did his best to secure a high-level position in the administration of the conquered country for Riza. Seemingly, he was in awe of her expertise on Iraqi matters. Participants in high level meetings to discuss intelligence on Iraq told me they were startled to hear the deputy secretary of defence invoke his girlfriend: "Shaha says ..." Other Pentagon officials were less impressed by her knowledge of the country, not to mention the enormous salary she demanded for her services, and successfully blocked the appointment. Instead, a huge Pentagon contractor, Saic, was directed to hire Riza for a temporary Iraq mission."

Her colleagues in the Bank apparently were also less impressed by her knowledge in communications as well when they turned her down twice for promotion, until Wolfie came along and gave her a non-competitive promotion and promises of future promotions when she gets back to the World Bank from helping the US State department spread "more Iraqi style" democracy in the rest of the Mid-East.. Promises he, and the bank, probably won't be able to keep after all.

Posted by A Washington source at 12:52 AM

robin ram raids bank on first day one part of the bank that would definitely be grateful to see the back of robin cleveland is the underground car park- rumour has it that on her first day in the office she drove her gas guzzling SUV into the car park not noticing the low roof and destroying the vehicle. needless to say she sent the bill to the bank....

Posted by 'Barry White' at 08:48 PM

Board take note: doubts about credibility of key document in Rizagate scandal. Questions have been raised today about an important document that is supposed to show how Wolfowitz and his key advisers approached the Riza pay issue. Someone with a very good knowledge of the Bank's internal systems has written to us casting doubt on the authenticity of an e-mail that forms part of the evidence released by the Bank's board on 12 April (PDF, 120 pages).

The document in question is document 12 the "draft e-mail" from Robin Cleveland) of the documentation published by the World Bank Board on 12 April. (You can find this on page 77 of the PDF).

Our correspondent's doubts arise from three things they have spotted about the e-mail.

1. Why is the e-mail only a draft? Why is the actual sent e-mail not attached? Who was it to? Surely this would have been in the documentation received either by HR, the Ethics Committee or the General Counsel and part of their records?

2. The contact phone number is a little odd. In Lotus Notes - the software used by the Bank - an individual's phone number is not shown in full, rather only the last five digits are shown, ie in the case of Robin Cleveland it would be 37129 and not 473-2179.

3. the "q" would not appear before the phone number. It is not clear how that got there - it certainly does not appear on anyone's e-mail in the Bank.

For the following reasons, my deduction from this is that the e-mail was typed ex-post:
-- It is only a draft because it was never sent. If it was actually sent, then there would be evidence of who it was to and the copy list and the date and time it was sent.
-- The person who typed it up did not think about how the system would show such e-mails - the phone number would certainly not appear like that in an internal e-mail.
-- they accidentally typed a "q" instead of a tab key (they are, after all, next to each other on a keyboard) when they were typing the e-mail in a word document.

I am not in a position to judge all of the above, but from where I sit, these questions look well worth the board's earnest consideration. If anyone out there has views on the above, please drop us a line (contact@worldbankpresident.org).

Posted by Alex Wilks at 05:22 PM

Old Europe is not amused. In an extraordinary move in diplomatic terms, which will turn up the heat on the White House, the European Parliament today expressed its opinion on the Wolfowitz scandal. As part of a resolution on transatlantic relations, the following text was adopted by roll call vote with 332 votes in favour and 251 against:

"Calls on the EU Presidency and US government to signal to the President of the World Bank, Paul Wolfowitz, that his withdrawal from the post would be a welcome step towards preventing the Bank's anti-corruption policy from being undermined."

UK Green MEP Caroline Lucas said: "By digging in his heels and refusing to resign as President of the World Bank, Wolfowitz is dragging the whole organisation into disrepute and further undermining the credibility of its anti-corruption policy. If he won't jump himself, he must be pushed. The European Parliament has today added to the mounting pressure to end Wolfowitz's chequered tenure at the helm of the World Bank by calling on the EU Presidency to press the US government for Wolfowitz's withdrawal. We hope the issue will not be brushed under the table at the forthcoming EU-US summit."

The summit will take place in Washington on 30 April.

Posted by Jeff Powell at 04:22 PM

Widening the net (updated). Responding to our request yesterday about clarification of the mandate of the investigation into Bank leaks, we received the following:

Updated Message from Ana Palacio, Sr. VP and Group General Counsel
*Date: *April 11, 2007 - 12:43 *Sponsor: *Legal Department

Ana Palacio
Senior Vice President and Group General Counsel

Posted by Jeff Powell at 03:31 PM