who will be next World Bank President What will they do


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!

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

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….

Every development institution, including the World Bank, has a responsibility to safeguard every dollar, to ensure that it is spent as wisely as possible, and to set a standard which we can be proud of. …

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….

Public awareness of entrenched corruption erodes trust in government institutions, leading to acceptance of substandard public services …and an environment that discourages the reporting of allegations of fraud and corruption.

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 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:

"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.

For this reason, Paul Wolfowitz must go. The Bank faces important challenges in the coming years, including the IDA-15 replenishment process. Wolfowitz's admitted mishandling of the Riza affair, poor judgment in appointing senior staff and inability to provide effective leadership leave him ill-prepared to head the institution. The president of an international institution must be someone who can inspire confidence in staff, member governments and civil society. Paul Wolfowitz has squandered all trust that may have been invested in him.

Wolfowitz's resignation is necessary but not sufficient to address the current scandal. Meaningful governance reform requires a transparent and democratic leadership selection process open to individuals from any country. By tradition, the US currently appoints the World Bank President and Europe selects the IMF Managing Director. This is wrong.

Moreover, decision-making on the Board of Directors of the World Bank is largely in the hands of the rich world. This must change. Developing and transition countries must be given greater voice and vote in the World Bank (and in other similar multilateral institutions) in light of their rights, population and growing influence in the world today.

Finally, the Bank continues to take decisions behind closed doors. This secrecy, among other reasons, perpetuates its image as a technocratic power far removed from the reality on the ground and out of reach of ordinary citizens. This secrecy has directly contributed to the current crisis. Transparency in Board deliberations and broader stakeholder participation in Bank decision-making at all levels are essential.

The Development Committee communiqué issued on Sunday 16th April said: "The current situation is of great concern to all of us. We expect the Bank to adhere to a high standard of internal governance". We agree: the Bank needs to practice what it preaches by resolving these current structural and political failures immediately. The decision is in your hands.


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.

In the long term, the issue goes back to the fundamentally flawed governance structure of the World Bank including the appointment of its President. It just does not make ethical sense for the World Bank to preach good governance when its own governance is undemocratic and often non-transparent. Now too, it is clear that the World Bank cannot be lecturing on anti-corruption when its own head has used his power to advance a personal interest. Corruption everywhere starts with good people accepting and tolerating individual acts of corruption and making excuses for it.

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

Regarding my message to all staff of *April 9,
a number of staff members have sought clarification. The questions have
centered on the scope of the investigation that has been initiated as a
result of the joint decision of the President and the Dean of the Board
(Joint message posted on *February

As stated in my communication of April 9, 2007, the Washington, D.C. law
firm of Williams & Connolly, LLP has been asked to address the matters
agreed between the President and the Dean as the subject of the
investigation. The investigation will focus on two stories appearing on the
Foxnews.com website. The first appeared on January 31, 2007, entitled
"Wolfowitz vs. the World Bank board: It's Trench Warfare." The story was
based on confidential Bank documents. The second story appeared on March 27,
2007, and was based on confidential email communications internal to the
Bank related to country dialogue. In both instances, the stories involved
disclosure of confidential internal documents and communications in
violation of Bank policy.

As stated in my earlier communication, Williams & Connolly has been retained
to conduct an investigation into the unauthorized disclosures that provided
the basis for the January 31, 2007 and the March 27, 2007, news stories
appearing on Foxnews.com. The Board and the President ask that everyone give
these representatives their full cooperation.

If you have information that you believe is relevant to this investigation,
please contact Jonathan Kravis at Williams & Connolly. His telephone number
is (202) 434-5206.

Ana Palacio
Senior Vice President and Group General Counsel

Posted by Jeff Powell at 03:31 PM

That controversial health strategy in full. The good people running the Wolfowitz Resign blog have passed us the proposed revisions to the Bank's Health, Nutrition and Population strategy. The 5th April draft of the document is available here (PDF, 319KB).

For the controversy surrounding this document, refer back to Jeff's post of yesterday and another of and of last week.

We'll link to the Wolfowitz Resign post as soon as we see it.

Posted by Alex Wilks at 03:20 PM

Reading the Tea leaves. The Bank's Articles of Agreement; Article V , section 3 (b), states that " Except as otherwise specifically provided, all matters before the Bank shall be decided by a majority of the votes cast." With that in mind, here is the distribution of votes among the board of executive directors, which should give a reasonable bases to the question of how each country may vote on the fate of Paul Wolfowitz.

Posted by A Washington source at 01:33 PM

Palacio appointments questioned. Insiders are asking questions about the process of an appointment made by Wolfowitz-ally general legal counsel Ana Palacio.

The question marks surround the enlisting of Elena Segura Labadie. Labadie formerly held posts as Palacio's chief of staff at the ministry of foreign affairs in Madrid (under the Aznar government), former deputy in the Spanish parliament and candidate for mayor, before Palacio brought her in as senior legal counsel.

According to inside reports, the young, charming Spanish law graduate was scheduled to get her attorney's bar in Madrid when she was called to duty at the Bank. She was first appointed as a consultant of the legal department for a few months and then promoted to senior attorney, a rank that many people in the Bank takes about ten years to achieve.

Curiously, there is no biography or information on experience etc. as is the norm on the internal bank staff directory. She is also the only senior counsel in the twenty or so people in the legal office of Palacio.

Disgruntled in legal? If you have any further information contact us. Remember to send your message from a non-hotmail account outside of the Bank. And ignore and bounce back messages.

Posted by Jeff Powell at 12:01 PM

Head in the sand. Seems that the Bank's external affairs department hasn't noticed recent turmoil. A former senior Bank staffer has told us that absent from the Bank's daily newswire has been any mention of the miles of newsprint devoted to the debacles of Wolfowitz and his coterie: "Pravda would be ashamed." Add Wolfowitz-appointee new VP external affairs Marwan Muasher to the list.

Posted by Jeff Powell at 11:39 AM

FT backs up wbp on Da-boub. Today's FT confirms two lines of investigation pursued by wbp over the past days into the actions of Wolfowitz-appointee Juan José Daboub. Daboub has been caught red handed tinkering with World Bank policies on health and climate change.

Robert Watson, Bank chief scientist, told the FT that Daboub tried to take out some references to climate change completely and, in other cases, replaced it with the phrases "climate risk" and "climate variability", which convey greater uncertainty over the human impact on climate. Watson said: "My inference was that the words -'climate change' to him implied human-induced -climate change and he still thought it was a theory and was not proved yet."

Maybe we were too generous in thinking that Daboub will go after evolution next ... there's still that 'round earth' theory to deflate.

Posted by Jeff Powell at 11:33 AM

Widening the net? Rumour from inside the Bank that the investigation into leaks to FOX news has been broadened.

Bank general legal counsel (and Wolfowitz-appointee) Ana Palacio hired law firm Williams & Connolly to investigate the leaks. But there are concerns that the investigation may be broadened beyond the January and March leaks to FOX news. Please get in touch if you can clarify Williams & Connolly's mandate.

Posted by Jeff Powell at 11:04 AM

A picture speaks a thousand words. Many people have sent in a link to a photo of Wolfowitz enjoying some quality time at the White House correspondents dinner at the weekend. It's good that he manages to look so relaxed even when so embattled. The original photo posted by Talking Points Memo is here. And some creative people in Washington have been kind enough to write in with a new version of the photo, complete with blue ribbon.

They explain: "We thought there was something strange about their body language. What's wrong with this picture? So we strategically added a blue ribbon and suddenly it all makes sense".


For anyone who has not been paying attention to all our posts, the blue ribbon is the protest symbol adopted by World Bank staff.

Posted by Alex Wilks at 10:59 AM

Wolfowitz prayer. In their desperation, Bank staff have turned to prayer.

Our Father, who art in White House

GW be thy name

Thy Kingdom come

Thy will be done

at World Bank as it is in White House

Give us this day our IDA replenishment

Forgive Wolfowitz for his trespasses

As we forgive PW's cronies for their trespasses against us

Lead us not into 3 more years of Wolfowitz

But deliver us from the Executive Directors

For thine is the kingdom

The power and the glory

Forever and ever


Posted by Jeff Powell at 10:37 AM

Health strategy fight continues. Another fight at the Bank board yesterday between the Europeans and the Americans, as reported by Reuters. This time over the Bank's health strategy, which as wbp readers will know, was improved by Wolfowitz-appointee Juan José Daboub.

After gender and reproductive rights groups worldwide went ballastic over the deletion of references to family planning and reproductive services in the strategy, European directors on the board intervened to ask health sector staff to rewrite the strategy. Miraculously, Bank staffers had a Daboub-proof version all ready to go.

Then yesterday the Americans decided that they liked Daboub's version better. They blocked passage of the Daboub-proofed revision. Word is that the section on reproductive health and population will be revised once more. European directors are assuring us that the intention is to make very clear that there will be no change in either policy or practice.

Some of the changes introduced yesterday were deemed "ambivalent." This will sound familiar to those of you who know US (and Vatican) tactics at the UN. The US ED - newcomer Eli Whitney Debevoise II (no, I'm not making that up) - has reportedly asked that reproductive health "services" be replaced with reproductive health "care," and that "rights" be replaced with "health."

The new, possibly final, revision of the strategy should become available today, but no idea yet what the language will look like and whether it will be universally accepted. The Bank was to issue a press release to try to explain why the strategy was not endorsed yesterday - ever watched a worm wriggle on a hook?

Tuscualoosa News has further details of this health strategy row.

Posted by Jeff Powell at 10:07 AM

Could we know by COB? Sources inside the Bank say that the ad hoc committee met last night at 5 pm, and will meet again today. They have told Wolfowitz to appear before them. According to Bloomberg, they have rejected a request by Wolfowitz's lawyer, Robert Bennett, to make a presentation.

"This is outrageous conduct on the part of this institution," Bennett said in an interview last night. "It's grossly unfair to Mr. Wolfowitz. To the world, it gives the appearance that he is being railroaded." Or maybe the world is thinking that it's the Bank that's been railroaded by Wolfowitz and his cronies? Whadya think?

Posted by Jeff Powell at 09:34 AM

Double threat to World Bank funding. As if the threat to the World Bank's IDA soft-loan window wasn't bad enough, now people are muttering that the bond markets might give the institution a kick where it hurts - in its credit rating.

Among others the Financial Times has been urging European governments to signal their displeasure with the Wolfowitz regime at the Bank by using explicit threats to withhold funding from the current replenishment of IDA.

Now we hear people are discussing whether the bond markets (where the Bank's other arms raise a large proportion of their operational funding) may react. The IBRD (middle-income part of the Bank) gets about $10-15 billion a year from international bond issues. World Bank bonds have historically always received a very good credit rating – AAA. Rating agencies and investors believe there is very little risk of IBRD or IFC defaulting on this paper is that the WBG’s shareholder governments (principally US, Japanese and European governments) would be ready, willing and able to meet any call on capital in a imtely fashion in the event of a major problem. Basically, the assumption is the US and others would bail out the World Bank Group.

But does this still hold true? A well-placed commentator (who needs to remain anonymous) has written into worldbankpresident.org stating his/her concerns: "With the current crisis – and especially if Wolfowitz fights to hang on and the warfare continues for months – I wonder if this presumption by analysts and investors still holds true, and if their confidence in shareholder government support for IBRD and IFC is diminished, is this (likely to) have a detrimental effect on WBG bond ratings and their future ability to raise money in the capital markets?"

They continue: "Add to this the effect Wolfowitz is having on the WBG’s ability to replenish IDA funding, and the problems he has caused for dealflow and, potentially, portfolio quality, over the last year or so (eg the massive underspend in Africa followed by the current ‘surge’ to make up the difference before the end of June). If the free market itself starts to penalise the WBG for the sins of Wolfowitz, purely on capital risk grounds, that would be...interesting!"

The surge mentioned above means that the World Bank's board is supposed to be especially busy in the next ten weeks leading to the end of the Fiscal Year. The Bank has always had this 'bunching season', at which time many people argue that dubious loans get approved without much scrutiny. About a month ago GAP produced a very interesting release on this issue, complete with links to graphic World Bank graphs showing the gravity of the problem this year in relation to Africa. This time the board has bigger issues on its plate - including a potential collapse in Bank funding.

This issue is also touched on in a letter to the FT today from a former World Bank senior communications staffer, Tim Cullen. As well as a nice dig at "Mr Wolfowitz's principal aide who practised the 'Roach Motel' school of management (the documents check in to the president's office but they don't check out)" Cullen hints that a new president for the Bank should be able to "inspire and reassure the bank's staff, its member governments and the capital markets".

Your views welcome. Write in to contact@worldbankpresident.org.

Posted by Alex Wilks at 08:07 AM

Riza's (other) contract. The Government Accountability Project has more on the Shaha Riza defence contractor moonlighting episode (for the background see this and this). GAP lists 7 open questions about the affair and concludes that "a convergence of unusual facts about the contract issued to Shaha Riza by SAIC raises red flags about the propriety of the arrangement".

Their very sensible questions (PDF) are the following:

1. What were the terms under which Riza was paid by SAIC?

2. Did Riza have a security clearance for this contract? If so, how did she acquire it so quickly, given that she was not a U.S. national?

3. Did the appropriate authorities at the World Bank know that Riza was simultaneously a Bank employee and a consultant for a defense contractor?

4. Why did the Pentagon inquiry into Riza’s SAIC contract, which found her to be “uniquely qualified”, not reference the Department of Defense IG’s report of March ’04, which determined that her contract had been written to fit her skills?

5. How did Paul Wolfowitz communicate to SAIC that Riza should be hired as a subject matter expert?

6. Will there be a new Department of Defense inquiry into the propriety of Wolfowitz’ role in SAIC’s hiring of Shaha Riza in 2003?

7. Who at the World Bank approved her leave and under what circumstances?

Remember this is just one sub-story in the controversies surrounding Wolfowitz, his partner and his appointees. Transparent respect for the Bank's rules is certainly not in evidence here or elsewhere. For my guide to the multiple angles on this affair, see this overview post.

Posted by Alex Wilks at 07:44 AM

Wolfowitz' contract. Here is a copy of Wolfowitz' employment contract (PDF) with the World Bank Group. The contract is now a subject for the board of executive directors' expanded inquiry into the Shaha affair.

Among other clauses that seem relevant:
3. You will adhere to the standards set forth in the Code of Conduct for Board Officials (the Code). You will also be expected to observe the standards of ethical c:onduct applicable to staff members of the Bank, where these reflect a stricter standard.

3d. Conflict of Interest. It is understood further that you will avoid any conflict of
interest, real or apparent.

And three clauses which may become relevant right now.

Clause 7. End of service. Although you have been appointed for a term of five years, the Executive Directors may terminate your contract with the Bank in accordance with Article V, Section 5(a) of the Articles of Agreement.

Clause 8, on Termination Allowance.

Clause 9 on Retirement Benefits.

Posted by A Washington source at 12:20 AM

Health staffer freed by board. In an astonishing letter (see below), the Bank staffer responsible for the health strategy thanks the board for raising concerns regarding the deletion of sexual and reproductive health - she shares their concerns that the current document does not illustrate the Bank's 'commitment to the issue'. Could it be that she was forced by her boss, Wolfowitz-appointee Juan José Daboub, to do the dirty work against her best instincts?

In his attempt to pre-empt accusations of personally manipulating internationally-agreed strategy (see bottom), Daboub contends that "none of the editorial changes that were made at my direction changed, or intended to change, the Bank Group's programme in the area of family planning". Which begs the question - if he were planning to change Bank direction in family planning, what method would he propose other than altering its family planning strategy?

Driving the point home is that the human development staff had the correct un-fiddled version of the strategy all ready to go at their fingertips. Worldbankpresident.org salutes Joy and her team!

Don't forget that Daboub is the same man who the Bank's chief scientist has said tried (unsuccessfully) to delete all references to climate change in the Bank's clean energy investment framework.

What's next? Removal of any mention of evolution from the Bank website?

Joy Phumaphi
04/19/2007 04:16 PM
34946 HDNVP

Eckhard Karl Deutscher

Alexis Kohler, Caroline Mary Verney Sergeant, Cristian C. Baeza, Dirk
T. Mattheisen, Gino Pierre Alzetta, Giovanni Majnoni, Herman H.F.
Wijffels, Jessica P. Venema, Juan Jose Daboub, Michel Mordasini,
Nicole Klingen, Svein Aass


Re: The World Bank Strategy for Health, Nutrition and Population


Dear Mr. Deutscher,

Thank you very much for your memo raising concerns regarding the
treatment of Sexual and Reproductive Health in the new World Bank
Strategy for Health, Nutrition and Population Results to be discussed
at the Board on April 24, 2007. We share your concerns that the
current document (including the Supplemental Note) does not fully
illustrate the Bank's strong commitment to sexual and reproductive

After further consultations, we have put together the attached
proposed corrigendum to replace the section on "Renewed commitment
for Population policy in Section H of the Board document (paragraphs
152 through 161 of the Board paper) to fully capture the strong
commitment of the Bank to reproductive health, including family

I urge you to consider this corrigendum as a strong commitment of the
Bank to sexual and reproductive health and proceed with the scheduled
Board meeting on April 24, 2007. A substantial delay of the board
meeting could have serious effects on the sector's ability to respond
the work program of the entire sector.

Regards, Joy

Joy Phumaphi
Vice President
Human Development Network
The World Bank Group

Estimados Vice-Presidentes,

As I expressed to you this morning, there have been various press reports recently regarding the Bank's new health, nutrition and population strategy as well as the contents of the Madagascar CAS, which I would like to clarify and set the record straight.

Regarding the Madagascar CAS, none of the editorial changes that were made at my direction changed, or intended to change, the Bank Group's program in the area of family planning.

Family planning continues to feature in the CAS. In particular, paragraph 104 of the document continues to state that "In health, [the Bank] will help the government make further progress on reducing child and maternal mortality by offering access to reproductive services ...". In addition, the CAS continues to include a Bank-supported health project that supports Government activities in the area of population and family planning, and that management expects to distribute to the Board in late April, as originally planned. This project explicitly supports government implementation of its family planning strategy, and explicitly includes as an indicator raising the proportion of women using contraceptives from a baseline of 12% to 30% by 2011.

There also has been no change to the Bank's policy on family planning. The health, nutrition and population strategy document that is currently before the Board, for discussion on April 24, has a results framework (Annex J) which includes an outcome (IV) entitled "Improved maternal, reproductive and sexual health". That results framework also explicitly references multisectoral contributions to intermediate outcomes/outputs that include "improve family planning and sexual health", where the relevant measures are identified as "contraceptive prevalence rate among women of reproductive age", "unmet need for contraception", and "prevalence rate of STIs [sexually transmitted infections] among adults and young people (15-24 years)".

Finally, let me state clearly that I am here to carry out the Bank's policies, not my own. The policy on Reproductive Health is clear. It has been endorsed by the Board and it has been in place for many years. It has been followed by the President, the staff and me, as reflected in projects and programs brought and to be brought to the Board. In fact, since last July, we have financed about $625 million of projects in the area of population and reproductive health, and we expect that number to increase to $750 million or so by the end of June. Moreover, we have more than a dozen projects that are scheduled to go to the Board between now and the end of December 2007 that will address population and reproductive health—in countries like Benin, Botswana, Chad, Cameroon, Congo, Kenya, Mali, Mozambique, Nigeria, Rwanda and Tanzania. I respect the freedom of our partner countries to decide on this subject.

I have had the fortune of making things happen under difficult conditions in my own country, so I know that development and progress can be achieved with the right leadership and effective policy advice. I remain fully committed to supporting the important work of the Bank towards creating opportunities for the people in need.

Juan José

Posted by Jeff Powell at 06:56 PM

Funny business with lawyers. (Update). From an eagle-eyed legal advisor to wbp.org: Riza got a Republican lawyer, Wolfowitz a Democrat one. Update with questions and comments on who is paying for Paul Wolfowitz's lawyer.

When Shaha Riza needed a lawyer, she looked among the usual right wing Republican circles and came up with Victoria Toensig. As Riza's new lawyer, Toensing makes all Riza's statements to the press about the Wolfowitz affair, her salary and other part time jobs and so on. Toensing is used to the press - she is one of Bill Clinton's main enemies in the Lewinsky affair. Toensing appeared on American TV over 300 times to make accusations about Clinton.

However, now Wolfowitz has appointed his own lawyer. The embattled Neocon
banker decided not to look in the same Republican circles. Instead he
hired Robert Bennett, who worked for Clinton as a defence lawyer in the
Lewinsky scandal. It looks like Wolfowitz, desperate to keep his job, is trying
to distance himself from all that Republican history.

Or is this just Kramer vs. Kramer?

Update, 25 April, Alex Wilks
Old friend David Woodward at New Economics Foundation in London (if you look at his bio you'll see he also used to work at the UK ED's office) writes in with this good question:
"Has anyone thought to ask who's paying Wolfie's hideously expensive lawyer for "several weeks" work? If it's the Bank, it's an abuse of public funds; if he's getting help from the White House, it's political interference; and if it's coming from his salary, we're paying him too much!"

David follows up with two afterthoughts.

First, “political interference” is an under-statement – this amounts to corruption. Second, this is recoginised in PW’s contract, which says:
“In view of the international character of your position, it is expected, of course, that you will not accept any gift or fee from any government or from any party external to the Bank.”

So ONLY if PW is paying out of his own pocket, at full cost, is this consistent with his contract.

Posted by Jeff Powell at 06:35 PM | Comments (0)

Wolfowitz's lawyer seeks to buy time. (Update). The Washington Post also carries interesting comments from the lawyer hired by Wolfowitz yesterday. The main message: slow down. The same point was made by the Bank president in a memo sent to staff this morning.

Robert Bennett (whose hire we announced yesterday) said the process should be extended to give Wolfowitz "an opportunity to present his side. . . . It would be grossly unfair to him and it would not speak well of the World Bank if they rush to judgment without giving us a reasonable time to put together an appropriate presentation." He neglected to say what he considers to be a reasonable time.

An old friend just pointed out the typical conflict of interest that lawyers have on the question of how long they work and wondered "has anyone thought to ask who’s paying Wolfie’s hideously expensive lawyer for 'several weeks' work? If it’s the Bank, it’s an abuse of public funds; if he’s getting help from the White House, it’s political interference; and if it’s coming from his salary, we’re paying him too much!" If you know the answer don't hesitate to get in touch (contact@worldbankpresident.org).

The Post reminded its readers that the Bank's board has not set a timetable for deliberations, although finance ministers from donor nations urged a speedy resolution, warning of low staff morale and damage to the institution's reputation. I'd also like to remind anyone who has forgotten that the Bank board's statement of 12 April did pledge to resolve the matter 'expeditiously'.

I've been told (26 April) that a senior Bank staff member, informed of the Bennett/Wolfowitz "we are not resigning" demand for more time to prepare to face the music at the Board next week said "why would he need to prepare? The truth is easy to remember."

And as for the staff morale point, Mr Wolfowitz circulated the following memo just a short while ago. Not sure that it will do the trick ... do you?

24 April memo from the World Bank president's office

The World Bank
Washington, D.C. 20433


10:01:49 AM

To: All Bank Group Staff


Message from the President
Yesterday, I briefly met with VPs and Actings to update them on the current situation and how to move forward. I am writing to inform all staff of my conversation with them. I understand the importance of coming to closure - in a timely manner - on the issue involving me, and would ask for your continued patience in allowing time for the Board to do its work. At the same time, we have an enormous agenda of work ahead of us over the coming months, including projected delivery of some 180 projects and a big corporate agenda which requires the full energy of each of you. You have all been working very hard and I assure you that the management team and our development partners are proud of your efforts in these difficult circumstances.

The Vice Presidents have been candid in their feedback to me on the challenges facing the Bank and I appreciate this. I also appreciate that they intend to maintain focus on our workprogram and continue to function as a group to support the effectiveness and functioning of the institution. Finally, I will be finding ways to consult them as a collective sounding board for finalizing major changes in the way my office and the senior management team work, in order to address the concerns that have emerged in my discussions over the past few days. I will keep you posted on these and other matters, while we wait for the Board's decision.

Paul Wolfowitz

Posted by Alex Wilks at 04:43 PM

Coach wanted. Warning: tough pupil. Today's Washington Post contains what seems to me a quite desperate appeal from Paul Wolfowitz. The Post reports on a brief meeting between Wolfowitz and senior managers yesterday. After diplomatically appreciating what he called their "brainstorming" about ways to improve bank management, the Bank president said he is considering hiring a coach "to assist him in changing his leadership style".

One person writing in commented: "I guess he has to change from being a NeoCon Hawk to a good leader with some semblance of integrity."

It is not yet clear how Wolfowitz plans to find someone to take up the challenge of reforming his style. (Could he be tempted to bring in Karl Rove or similar for a messaging brush-up?) But this is clearly way too little, way too late (both in the scandal and in a man's life).

For a reminder on how far many current and past Bank managers have gone beyond brainstorming on management techniques, see yesterday's letter to the FT and the reports about open rebellion in the Bank here and here.

For more on Wolfowitz's alienating style see my previous post.

For my guide to all the angles in the Wolfowitz affair (in fact there are some more now so I must update it), see this post.

Posted by Alex Wilks at 02:26 PM

Bank staffer confirms Daboub tried to make climate change disappear. In today's Herald Tribune, Robert Watson, highly respected chief scientist at the Bank, is reported to have said in an interview that Wolfowitz-appointee managing director Juan José Daboub "literally tried to eliminate the words 'climate change' everywhere in a policy paper" but that the words were put back.

Watson added that he was "absolutely convinced" that Wolfowitz had no role in the efforts.

On top of revelations that Daboub single-handedly tried to erase any mention of family planning from Bank health work, this will surely bring into question his judgement and suitability for such a powerful post.

Posted by Jeff Powell at 01:39 PM

Professor Robert Wade calls for cool heads. In a letter to the editor of the FT, Professor Robert Wade of the Development Studies Institute at the London School of Economics and long-time analyst of the Bank, calls for cooler heads to prevail.

"On Mr Wolfowitz's future, those who wish to strengthen economic multilateralism should stop pressing for his resignation. With him in place, weakened, they would have time to secure interstate agreement that the next president should be recruited worldwide, and secure alternative funding arrangements for soft loans so that the US government no longer holds the organisation hostage to the threat of cutting contributions if it loses its monopoly."

Wade is right that if Wolfowitz leaves without agreement on fixing the process whereby his successor would be chosen, an opportunity will have been lost. However, if he stays in place, there are no guarantees that this will ensure that the process gets fixed - as in the case where the Americans vetoed the nomination of Caio Koch-Weiser to head the IMF in 2000 - it is amazing how quickly after a crisis the powers can return to the status quo. Let's keep the pressure on - end the fix!

Posted by Jeff Powell at 01:02 PM

Norway joins the mutineers. According to Reuters, Norway has joined a group of European countries including Germany, the Netherlands and Britain who have said they believe Wolfowitz has put himself in an untenable position.

Norway's development minister Erik Solheim said: "There is no doubt confidence in World Bank leadership has been undermined." "He will have a very hard job to repair this confidence," he told Reuters in Oslo.

It is unclear when the rest of Europe will discover a backbone.

Posted by Jeff Powell at 12:43 PM

Review of institutional integrity: sudden progress, certain doubts. (Update). In February this year concerns about the functioning of the Bank's Department of Institutional Integrity (INT) provoked the Bank's president and board to establish an external review. Little has been seen or heard of this since, but an announcement late yesterday gave further details of timing and process. But GAP has accused the report chair of having a conflict of interest that should prevent him taking on this role and Bank staff have also raised complaints.

Wolfowitz announced the review to staff in a 16 February memo: "The Board of Executive Directors and I have agreed to convene an independent panel of experts to assess how INT can best contribute to the Bank Group's mission. While a challenging assignment, we agreed that a comprehensive review of INT's activities could provide guidance on striking the right balance between safeguarding the Bank Group from legal, fiduciary, and other risks while also ensuring that INT's work serves the interests of our staff and partners".

He continued that "Mr. Paul Volcker has agreed to lead this panel. Considered one of the most eminent Chairman in the history of the US Federal Reserve, Mr. Volcker is distinguished by his passion and deep commitment to public service. He is also known for his careful and effective leadership of the UN oil-for-food investigation, in which he demonstrated his capacity to manage a review involving a large, complex international organization with significant diplomatic sensitivities and the competing interests of multiple stakeholders".

Not all stakeholders seem convinced, though. One correspondent today has already pointed out some potential conflicts of interest relating to this review itself. The issue was pointed out in a 2 March release by the Government Accountability Project. According to GAP, "Volcker's professional connections are too close to ex-INT staff, who are currently employed by a firm with a questionable tie to INT. Subsequently, the agency claims that Volcker should not qualify as an independent evaluator". The firm in question is Diligence LLC and the person in question is Glenn Ware, a senior adviser in the Bank's Department of Institutional Integrity. The GAP website has the full story.

Commenting on the Wolfowitz Resign blog Bank staff welcome Mr. Volcker's update but find the timing curious. They also accuse Mr. Volcker of being "less than zealous in moving forward with his independent review" and cast doubts about the fact that "his independent panel members appear to work for Ms. Palacio, the Bank's Chief Counsel". (My correspondent this morning says this is a 'red herring', probably due to their short-term employment contracts for this review).

Their last gripe - which is amazing - is that no relevant Bank staff have yet been consulted by Volcker or his staff. Even the Bank's Staff Association has so far had their requests (since February) for a meeting knocked back. Volcker's memo of yesterday does, however, invite interested Bank staff to put in requests for meetings before 10 May.

It is not clear whether Volcker and his team will examine how the head of the Institutional Integrity is hired and whether the current incumbent has proved too close to key US politicians to be able to exercise sufficient judgement when sensitive cases are brought before her. Here at www.worldbankpresident.org we are hearing convincing reports that some key figures in the Bank seem to be protected to the extent that complaints to INT yield nothing. And, as hinted yesterday, we are not just talking about the Riza affair.

In February Wolfowitz promised results of this work by July, but Volcker yesterday announced that he now plans to report "not later than 15 September 2007". That will be too late to be relevant for the current saga but hopefully with important lessons to avoid such problems in future.

The review panel

The people announced yesterday as panel members are the following:
- Mr. Gustavo Gaviria, (currently listed in the World Bank directory as working for Ana Palacio) who has worked since 1974 in the coffee and finance industries in Colombia. Mr. Gaviria is third generation in the coffee industry of Colombia and is founder and President of Industrias Aliadas S.A. and founder and chairman of Coffeecol, Inc. Mr. Gaviria is founder and President of Vision de Valores S.A. Since 2004 he has served on the Board of Ecopetrol, the largest Colombian company, where he heads the Committee on Corporate Governance. From 1999 to 2004, he was a Senior Advisor in the Executive Director's office at the World Bank.

- Mr. John Githongo, (currently listed in the World Bank directory as working for Ana Palacio), a former journalist who investigated fraud and bribery in his home country, Kenya. In 1999, he founded the Kenya chapter of Transparency International, and in 2003, President Kibaki appointed him Permanent Secretary of Governance and Ethics, a position from which he resigned in early 2005. He is currently a Senior Associate Member of St. Antony's College at Oxford University in the UK.

- Ben W. Heineman, Jr., who is a Distinguished Senior Fellow at Harvard Law School and a Senior Fellow at Harvard's Kennedy School of Government, where he is teaching and writing in the area of governance. He spent much of his early career in private practice and in government in Washington, D.C., including as law clerk to Supreme Court Justice Potter Stewart, and he now maintains an association with WilmerHale as Senior Counsel. From 1987 to 2005 he was Senior Vice President and General Counsel, and then Senior Vice President for Law & Public Affairs, for The General Electric Company where he dealt with matters directly relevant to maintaining high ethical standards in an international organization.

- Mr. Walter Van Gerven, (currently listed in the World Bank directory as working for Ana Palacio) who is a distinguished EU legal author and law professor at Leuven (Belgium) and Tilburg (the Netherlands) Universities with visiting fellowships at, a. o., Chicago, Stanford, Michigan, Paris II, and King's College London. Between 1962 and 1967 he was an associate in the Brussels office of Cleary, Gottlieb, and a founding partner in 1970 of a leading Brussels law firm which was subsequently acquired by Linklaters. From 1982 to 1988, he served as the President of the Belgian Banking Commission; from 1988 to 1994 he was Advocate-General in the European Court of Justice; and in 1999 he served as one of five members of the Committee of Independent Experts investigating allegations regarding fraud, mismanagement and nepotism in the European Commission, and formulating recommendations resulting in various reforms.

- Sir John Vereker, who is the Governor of Bermuda, an overseas territory of the United Kingdom. Briefly a staff member of the World Bank (from 1970 to 1972), he has spent most of his career in the UK government, including a three-year period in the Policy Unit of the Prime Minister's Office (from 1980 to 1983). In 1994, he became the Permanent Secretary of the UK's Overseas Development Administration and its successor the Department for International Development (DFID), a position that he held until becoming Governor in 2002.

Wolfowitz's February note said the panel will engage with civil society organizations and others outside the Bank. If you're doubtful about this or have something you want to say to these eminent reviewers now, you can find most of these peoples' contact details on the Wolfowitz Resign blog. That site also carries the full memos cited above.

Posted by Alex Wilks at 10:03 AM

Do as I say, not as I do. Script-writers on Yes Minister could not have made it up. A recent World Bank publication has an introduction from its president Paul Wolfowitz which reads: "We must also ensure that Bank staff continue to maintain high standards of conduct ... 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."

Wolfowitz's introduction (PDF) kindly explains that "this report details the steps the Bank is taking to confront fraud and corruption in our projects, as well as to promote the highest standard of conduct amongst our staff".

He goes on that "Every development institution, including the World Bank, has a responsibility to safeguard every dollar, to ensure that it is spent as wisely as possible and to set a standard that we can be proud of".

The World Bank board members currently investigating allegations of impropriety relating to several Bank staff contracts will certainly want to take a look at Wolfowitz's own statements here.

They may also like to turn to the report's Executive Summary, which says the institution seeks to "encourage the highest standards of personal honesty, integrity and ethical behavior within the Bank...". Or the words of Department of Institutional Integrity head Suzanne Rich Folsom "President Wolfowitz has made his position clear. The Bank will continue down the path of zero tolerance toward fraud and corruption and commit itself to a ‘gold standard.’"

What the World Bank board absolutely needs not to do is to roll over and say "yes, president".

Posted by Alex Wilks at 09:46 AM

More Africans back resignation. Several more African civil society voices are calling for Wolfowitz to go. But some international groups are being slow to make their positions clear.

Vitus Azeem, a spokesman for Integrated Social Development Centre - a Ghanaian NGO, says the most honourable thing for Wolfowitz to do is to resign: “With this situation one would expect that he should just resign…he should just give up,” he said.

“If it is an African leader who unduly favoured a crony, the US would call for his head, now it is Wolfwitz, and Bush is not doing anything. I think that hypocrisy must stop,” Ken Asamoah, a banker told Black Britain in Accra.

Robert Shaw a board member of Transparency International in Kenya added his voice to the growing chorus of discontent: "People are watching to see how it is handled by the board because what has come out - whether you call it corruption or something else and he himself has admitted it was a miscalculation of judgment - something went wrong."

Separately, I've been informed that there has been a lively correspondence between several African Transparency International chapters and their HQ in Berlin. The Africans are pushing for a similar line to that mentioned just above. For now, however, TI is sticking with its position outlined in the mealy-mouthed statement of 17 April which focusses on the system for handling conflicts of interest rather than the conflicts themselves and those responsible. This is surely getting embarassing now that so much evidence has emerged and so many Bank senior staff, editorial writers and others have made their positions clear.

Other major civil society groups which normally rush out media statements on key development issues have also been slow to express themselves on this. Much slower than they have been on other similar stories. How much evidence or political cover do people need?

Posted by Alex Wilks at 06:50 AM

Scandal-Scarred Robin Cleveland. Ward Harkavy of the Village Voice, who incidentally was the first to write about the Shaha affair in January 2006, has just put up another good article - "Wolfie's Scandal-Scarred Aide OK'd Riza's Move" . The article summarizes another nepotism scandal where Robin Cleveland, Wolfowitz' senior advisor at the World Bank, occupied the center stage before she joined the Bank.

Posted by A Washington source at 10:01 PM

Rumsfeld, Bolton, ... Gonzales, Wolfowitz. It doesn't take a political genius to know what links these men. They are all important George W. Bush aides and appointees. Agence France Presse has a story which quotes political analyst Eric David hinting that the 'steadfast support of the commander in chief' for the latter two may not last. After all Bush's approval rating is only about 30 per cent.

For Bush's latest intervention in the Gonzales affair - playing out in parallel in Washington, but little-noticed this side of the Atlantic - see the articles in the Boston Globe and Herald Tribune today. The IHT's headline is neat: "Gonzales's testimony satisfied at least one person, his boss".

Posted by Alex Wilks at 07:55 PM

Don't cry for me, IBRD. From one of our devoted readers - sung to the tune of Evita --- the Opera, "Don't cry for me, Argentina"

Don't cry for me, IBRD

Music: Andrew Lloyd Webber

Versions by Madonna, Olivia Newton John, The Carpenters, etc.

Don't Cry for me IBRD

It won't be easy, you will think it strange
When I try to explain how I feel,
That I still need your paycheck
after all that I've done

You wouldn't believe me
All you will see, is a President you once knew
Although he is up to his neck in scandal
All sixes and sevens with you

I had to second Riza, I had to promote her
Couldn't stay all my life at her heel
Looking out the Bank Balcony, staying out of her pants

So I chose malfeasance
Running around, firing everyone
But nobody from Wolfensohn's era impressed me at all
I never expected it to


Don't cry for me Executive Directors
The truth I never told you
All through my wild ways
My madness at Saddam
I kept my promise (to liberate Iraq at the Bank)
Don't vote against me

And as for nepotism, as for conflicts of interest
I never let rules get in the way
Though it seems to the world, free Iraq was all that I desired

They are illusions
Ethics are not the solutions they promise to be
The answer was here all the time
I love the Bank, and hope the EDs love me too

Don't cry for me Alison Caves


And as for tax free pay, and as for infamy
I never invited them in
Though it seems to the world they were all I desired

EU ministers are illusions
They're not the solutions they promised to be
The answer was here all the time
I love you and hope you love me


Don't cry for me GW Bush
The truth is I never betrayed you
All through my World Bank days
My invasive existence
I kept my promise (to defeat Iraq)
Don't keep your distance

Have I said too much?
There is nothing more I can think of to say to you
To know that every word is true

Don't cry for me IBRD

(PW breaks out in tears)

(UN Police arrives in Board Room and escorts him out the building in handcuffs after a scuffle with Cleveland and Palacio as well.

DoD declined to respond to Wolfowitz's call for an airstrike on Bank HQ, citing a shortage of PGMs)

Posted by Jeff Powell at 05:10 PM

Health strategy rejected. European executive directors and alternates have written a letter to staff in the human development network to explain their rejection of the draft health, nutrition and population strategy.

Gender and reproductive health groups have been bombarding the directors with complaints over the alleged watering down of the strategy by Wolfowitz-appointee managing director Juan José Daboub.

In their letter, the directors sternly rebuke Bank staff for disregarding board directions and the Development Communiqué, calling it "surprising" that the strategy makes virtually no reference to sexual and reproductive health.

The directors have called for a postponement of the scheduled 24 April board discussion of the strategy.

Daboub's position must surely now be in question.

Posted by Jeff Powell at 04:30 PM

The boys from Brazil. Rumours are coming in thick and fast that staff in the Bank's Brazil office won't be welcoming back one Wolfowitz clone any time soon. It seems there is a seamy and steamy story here waiting to be told.

If you have any further information drop us a line at contact@worldbankpresident.org . Remember to send from your webmail account*. Actually, remember to send from your webmail account from a computer not inside the Bank.

Update 1. Alex Wilks, 23 April, 14.36 EST
Several World Bank staff members have contacted us since Jeff's post, saying they have insights into this rumour and giving further details.

As Jeff also reported, several top Washington lawyers are now involved in this issue, so we are treading carefully. Should any journalist or World Bank board staff member like us to inform you about the allegations we will be happy to speak to you by phone. See our contact details here.

* A beady eyed writer has just informed us (thanks) that "Hotmail is the ONLY one of the 4 major email services (Gmail, aim, yahoo) that by default, include the IP address of the sender in the email sent. While all the other services log the IP address, it takes a bit more work to track down the offender".

Posted by Jeff Powell at 02:48 PM

Historic opportunity. Associate deputy editor at South Africa's Mail & Guardian, Nic Dawes, believes the Wolfowitz crisis presents a historic opportunity to fix the democratic deficit at the IFIs: "the bankruptcy of the current arrangement is in clear view and, if multilateralism in development finance is to survive it must be seized by the Europeans, Asians, Africans and the Americans. Democracy at the World Bank may not suit the neocons, but if their blunders bring it on, we’ll drink a toast to Wolfowitz and dance a jig to his political obituary."

Posted by Jeff Powell at 11:38 AM

It's a hit! (Updated) On Saturday many of our readers wrote to say the site was down, displaying a 'bandwidth limited exceeded' notice. We were not sure of the reason: but know we know that it is indeed because of a huge amount of visitors to the site.

Some of the figures are below (with March 2005 stats in brackets for comparison). In short unique visitors have risen 300 per cent and visit numbers 200 per cent since that previous busiest period in March 2005.

April 2007 so far (March 2005 for comparison)
Unique visitors: 61324 (19004)
Number of visits: 89884 (40453)
Hits: 8129786 (4836188)
Bandwidth used: 20.88 GB (8.86 GB)

Figures updated 26 April 2007.

We're very very happy with these figures. Bear in mind that the site was dormant for 2 years until just 10 days ago. So it has taken off from a standing start.

Those interested can see more stats on Alexa, which also show a very steep rise.

Please keep spreading the word about this site, linking in, and feeding us the latest info and insight.

Posted by Alex Wilks at 11:17 AM

A new entry - Mark Malloch Brown. Inter City Press at the UN has put forward a strong case for former UNDP head Mark Malloch Brown to take over from Wolfowitz.

Brown, currently at Yale University, has held posts as head of UNDP, number two to Kofi Annan at the UN, and head of the external affairs department at the Bank. Inter City Press points to the role played in the Wolfowitz affair by Dutchman Ad Melkert, former World Bank executive director and now number two at UNDP. Supporters of this theory will have to come up with an answer as to how the Americans will respond to Europeans - Brown is a British national - at the head of both the Bank and the Fund. Unlikely.

Posted by Jeff Powell at 10:56 AM

Germany has made it clear - Wolfowitz must go. In a bold move in diplomatic terms, German development minister Heidemarie Wieczorek-Zeul told the Financial Times Deutschland that "Wolfowitz should do the bank a service and face the consequences," as the current situation is "not acceptable".

Posted by Jeff Powell at 10:46 AM

And the others were on holiday? IPS has said that two internal sources at the Bank have confirmed that about 110 country directors, their deputies and programme coordinators sent a message last Friday saying they want Wolfowitz out. Along with the usual 'out of office' replies, that doesn't leave many.

Posted by Jeff Powell at 10:38 AM

Headed for a fight. In a sign that he does not intend to go quietly, Bloomberg reports that as of Friday Paul Wolfowitz has retained Robert Bennett, a partner at Skadden, Arps, Slate, Meagher & Flom LLP.

Bennett represented Bill Clinton against sexual harrassment claims. In a telephone interview on Sunday he claimed that he's "handled hundreds of conflict of interest cases, and this is a 'nothing' case. The scandal has been created by people who oppose Wolfowitz". If he reads this morning's FT, he might conclude that that is...well... just about everybody.

Craigb, writing on Daily Kos, question this Wolfowitz move. "The big question here is Why does Wolfowitz believe he needs private counsel? He may be for a career change but there is no indication of ANYBODY wishing to push criminal/civil charges".

Posted by Jeff Powell at 10:27 AM

Add the Independent Evaluation Group to the list. In a searing indictment reported in the FT, the Bank's own Independent Evaluation Group (IEG) has said that Wolfowitz's continued presence at the Bank is crippling its development effectiveness.

As reported here from leaked internal postings at the Bank, the IEG finds that "the ability of staff - particularly those working in client countries - to carry out daily interactions with clients, as well as the institution's ability in convening partners, are eroding".

In what must surely be seen as fatal blow to the tenure of Managing Director Juan José Daboub, the IEG has also faulted "an increasing lack of transparency in the application of bank's development policies, for example in population, climate change, governance and anti-corruption". Daboub has found himself under attack for deleting references to family planning in Bank documents and allegedly watering down the Bank's strategy to deal with climate change.

This UPI story is also carried by the Washington Times.

Posted by Jeff Powell at 09:33 AM

FT urges Europe to use IDA stick. In today's leader, editors at the FT have urged European governments, who make three fifths of the contributions towards the International Development Assocation, to use their financial muscle: "If the current leadership stays, European governments cannot - and should not - promise taxpayers' money for the next replenishment." The FT also calls for a change in the method to select the heads of the Bank and the IMF.

Posted by Jeff Powell at 09:24 AM

Historic open Letter by the who's who of former world bank senior officials .. In an unprecedented open letter published today by the FT, over 40 Former senior World Bankers, including Managing Directors, Vice Presidents, and Directors, call on Paul Wolfowitz to resign.

FT correspondents point out correctly that "the list of signatories contradicts the argument that opposition to Mr Wolfowitz comes only from the left and outside the US. Roughly one-fifth of the signatories are American – matching the proportion of Americans in senior bank jobs – and the list includes free-market advocates such as Peter Woicke and Gerard Caprio".

Posted by A Washington source at 12:09 AM

Thought police back on the beat. According to Bank staffers, the external affairs department may be deleting the more explosive postings on internal message boards.

Defending their freedom of speech, one Bank staffer sent around a subsequent message to summarise the contents of one of the deleted postings:

What was said in that post was that when a sector board rejects a proposed in-situ promotion, as it did twice in the case at hand, its reasons are communicated to the manager. A manager who did not work with the turned-down staff member the first time to address the feedback should not be surprised when the second attempt is rejected, too. Jean-Louis Sarbib is on record about what happened. It is bad enough that corruption permeates EXC, without having EXT collude in covering it up. As our work in WBI, PREM and DEC have shown empirically, corruption can only flourish if the environment can't talk about it.

Usually external has a hard enough time keeping Bank 'on-message' outside the Bank.

Posted by Jeff Powell at 07:04 PM

Easterly calls for regime change. In a Washington Post comment, long-time Bank economist, and now professor of economics at New York University (bio), William Easterly says that the Bank is facing the greatest crisis in its history.

According to Easterly, Wolfowitz's problems at the Bank are caused by the same thing that got him into trouble in Iraq: "intellectual hubris at the top that disdained the messy realities at the bottom. He imagined it would be as easy to clean up the pathologies of foreign aid as he had thought it would be to create democracy in the Middle East."

Easterly believes that while many within the Bank opposed Wolfowitz's corruption crusade because it threatened lending volumes, the president's modus operandi was "compromised by selective prosecution". Pakistan, US ally in the 'war on terror' "continued to receive oodles of World Bank money".

The misguided attempt to tackle corruption is only part of the problem. "The best and the brightest of its staff have been leaving in a steady, demoralized exodus, and poor nations are now deserting the bank to seek loans from private capital markets or grants from aid donors like China, who are in it for No. 1. Meanwhile, new private foundations (the Bill and Melinda Gates Foundation, Google.org and so on) are taking over traditional bank areas such as health and agriculture. Add to that the debacle over Wolfowitz's sweetheart deal, and you have a bank facing the gravest crisis in its six-decades-old history."

UPDATE, 23 April, 03.50 EST. Posted by Alex Wilks.
The Easterly Op Ed is also picked over by Pundita. She starts by appreciating Easterly's denunciation of the Bank's ever-spreading agenda:
"Wolfowitz also continued a disastrous trend begun by [James] Wolfensohn, whose answer to every bank failure to meet a goal was to add three new goals. The pair have supplemented the bank's original objective -- promoting economic growth -- with everything from securing children's rights to promoting world peace. In so doing, they've sacrificed clarity of direction for ludicrously infeasible by PR-friendly slogans like "empowering the poor" and "attaining the Millennium Development Goals".
(For the same argument see my 2001 short briefing: Overstretched and Underloved: The World Bank Faces Strategy Decisions).

Where Pundita parts company with Easterly is on the question of what should be done with the Bank. She complains loudly about what she calls the Hilary Benn fallacy on corruption (that money should still flow even if there are problems in a country/with a project). She suggests spinning off the International Development Association (the Bank's low-income country window), leaving the rest of the Bank to concentrate on infrastructure and government services.

Many NGOs have argued the same: that IDA should be out of the Bank - as was the original idea.

Posted by Jeff Powell at 06:51 PM

'Alternative girlfriend' by the Barenaked Ladies. See what else is on Kevin Kellem's playlist on Paul Wolfowitz's iPod.

Posted by Jeff Powell at 06:18 PM

Is Palacio Wolfowitz's personal lawyer? A message posted by Bank staff on an internal bulletin board suggests that Bank general legal counsel (and Wolfowitz-appointee) Ana Palacio may have her allegiances confused.

As last week's Board meeting on Riza-gate was about to commence, Mr.
Wolfowitz and Mmes. Cleveland and Palacio barged into the Board room and demanded to participate in the closed-door Board session. An argument ensued between the Board and the executive triumvirate. Paul Wolfowitz and Robin Cleveland left only because they had to attend a press conference related to the Spring Meetings. Ms. Palacio demanded to stay because she claimed she had a right to remain as counsel to the board. In turn, the board responded they would call her when it deemed her legal counsel was needed.

A needless debate that lasted close to an hour followed and MS. PALACIO REFUSED TO LEAVE THE BOARD ROOM! The board was then forced to adjourn the meeting and later convene another one in another venue. This institution now resembles a schoolyard filled with spoiled bullies grasping to stay in power. How much lower can our so-called leaders get?

The clear answer is yes, she is Mr. Wolfowitz's lawyer. Ask the legal staff who are up in arms ...

In the last bit the invective got a little too strong for wbp's delicate constitution.

Posted by Jeff Powell at 05:43 PM

Papered over? Sharp pencils within the Bank are posing more and more pointed questions about key documents in the Rizagate investigation.

The Board is not alone in reviewing the 102 pages the first ad hoc committee released last week. Sharp-eyed staff are doing their own detective work. We are posting some analysis which is likely to help busy Board members.

There's the September 16, 2005 letter from the State [US State Department] informing [senior human resources officer] Xavier Coll about Shaha's duties at State, which arrived at the Bank, as a fax, on October 14 (page 82 of the package). Mail must be slow, but not so slow that Xavier's reply to something that was faxed October 14 (at 4:40 am, it appears) is dated September 19. Maybe the first letter got lost. But Shaha's departure happened before that. Normally HR insists on knowing what people we send out of the Bank are doing before we agree to send them out and pay for them.

People are puzzled that someone with a G-4 visa could accept any outside employment, paid or not, but presumably Shaha's lawyer can discuss that with Homeland Security or whoever looks for people who are working illegally in the United States. Journalists who are hunting down the "SAIC, I direct you to hire my girlfriend" lead are looking into that. The shamelessness of DOD ethics staff in all this becomes apparent when they tell journalists to use a FOIA request to get their opinion that Paul Wolfowitz did not break any ethics rules when he recommended his girlfriend for a job.

The Board's document hunt may also include the paperwork (twice, we're told) that led to her being denied promotion to level H (twice), as well as the real short list for the communications officer job in MNA [the Middle East North Africa region]. People on that committee say they did not clear her for the list (contrary to what the Board was told would provide cover for some of what she wanted, the first promotion), which is why her career history says "Principal Communications Officer" (a position uniquely hers) before she was shipped off to State.

Now, for those of you who were wondering about why she'd just come back as a level GI Director, after an agreement by her outside supervisor and two Bank staff "acceptable to her", please be assured there's some process. (Those supervisors, so far, are Liz Cheney, we know who she is, and Anwar Ibrahim, friend of her boyfriend in pursuing democracy in Malaysia, and who PW recently tried to get on the panel that reviews the salaries of Bank and Fund EDs, which of course would be another story, instead of the NGO woman from another Asian country who was the first choice.) We may be led by people who aren't good on process, but, please, the Bank has HR processes, which virtually every other manager and anyone who's tried to be promoted knows by heart. It's not just two of the three of them agreeing. No, it's supposed to be based on their review of her performance evaluations while she was outside. No one's yet produced an evaluation from State, but presumably the Board will want that--she's been out for two years now, so there should be two to put in the file for that day when she crosses 19th Street back to her big corner office serving a democratized Middle East. Since there are no other staff at Foundation for the Future, that piece of any future record appears to be problematic, unless one takes a results-based approach to judging her performance, based on how many democracies are established in the Middle East between late last year (when Robin Cleveland agreed to the transfer) to when she returns, welcomed by chocolates and flowers.

Some have wondered about the dates and format of some of the documents, and there's something wrong with Robin Cleveland's 09/09/2005 "why I picked the lawfirm" draft email. There was an animated discussion in the cafeteria yesterday by some blue-ribboned IT staff: Can't put my finger on it just now, but presumably someone on the ad hoc committee's doing forensics on all the documents and their timelines. For that item (page 77 if you're checking), someone needs to ask Robin why she never pushed the "send and file in IRIS" button on something so crucial that surfaces, 18 months later, on paper only. Normally you'd need to send that as an email to Corporate Procurement to justify a contract, and to show proudly how you'd considered three firms and selected the one with Justice Scalia's brother working on the case. Of course, since you've cut the General Counsel out of the loop on the whole matter since he has a conflict of interest, maybe this was just another example of being given bad advice and not trusting your instinct.

Posted by Jeff Powell at 05:30 PM

You scratch my back... In a twist too hideous to think about, Washington sources have told us another reason why the Europeans may be reluctant to go after Wolfowitz for indiscretions over his paramour.

Apparently the head of another important institution controlled by the Europeans has been logging some serious airmiles to visit home for more than just some good paella. Now I wonder who is footing that bill?

Posted by Jeff Powell at 05:10 PM

The Bank as laughing stock A staff member in the World Bank's India office writes in one of the blogs on the bank's internal web site that "Seasoned Bank staff have become used to the fact that so many people despise the World Bank. Now, in addition, we may have to get used to being a laughing stock." ..

Here is the message :

Field notes

the Bank as laughing stock

Posted Fri, 20 Apr 2007 07:47:51

In an earlier posting I remarked on how little HQ gossip managed to filter down to the Country Office level.

Let me take that back.

Everybody here in India seems to know about our internal crisis. It has received quite a bit of press coverage (much of it the syndicated stuff you have also read, but many articles by Indian commentators, even in local newspapers). There may still be a few remote mountain villages in Bhutan who have not heard, but it's just a matter of time.

Many people have approached me on the topic: a few seem concerned, a few are looking for explanations, and others just laugh. I am uncomfortable either way.

I do not intend to judge our President here, but I would like to note that the crisis is already damaging our credibility with our Client [Bankspeak for the borrowing government. Ed.]. To illustrate:

Last year in India, the Bank called a halt to lending on the basis of charges of corruption in the health sector. Government was furious. We may never be able to regain this moral high ground if required.

In one of my projects, we are requesting a refund of Bank funds which were involved in corrupt recruitment practices. We took a tough stand. Government did not find our request appropriate, but appeared resigned to meet our terms. I am not looking forward to the next meeting with them on this. We have lost leverage.

One of my colleagues visited a Chief Secretary, who commented "What's the matter with your President? First he has holes in his socks, now he has holes in his head." This type of comment is quite unusual.

Seasoned Bank staff have become used to the fact that so many people despise the World Bank. Now, in addition, we may have to get used to being a laughing stock.

Posted by A Washington source at 04:13 AM

Wolfowitz Scandal Takes Bank Hypocrisy to New Heights Wolfowitz wants to stay put but it’s hard to believe he can weather this storm of his own making, says Sameer Dossani of the 50 Years Is Enough Network.

[The original article can be found on the Foreign Policy in Focus site.]

Over the years, the World Bank’s hypocrisy has been so extreme as to be taken for granted. The ironies of talking about ending global poverty, interest rates and export policies while staying at five-star hotels and attending lavishly catered meetings do get a bit tiresome for Bank-watchers like me to keep pointing out. But the latest developments involving World Bank president Paul Wolfowitz and his former partner, Shaha Riza, take this everyday hypocrisy to new heights.

When Paul Wolfowitz was appointed to head the World Bank group in 2005, he faced a problem. No, his problem was not that he would be facing the repercussions of his disingenuous arguments in favor of the illegal invasion of Iraq when he was in the Defense Department. Nor was his problem that other countries were opposing the appointment of a leading U.S. neoconservative close the Bush administration with no development experience to what is arguably the most important position in development financing. Rather, Wolfowitz’s problem was that others knew about his relationship with Shaha Riza, a World Bank employee. According to World Bank policies, your boss cannot be your lover.

When the World Bank board ethics committee met to discuss the issue, they recommended that Riza be “seconded” to somewhere else. In other words the World Bank would continue to pay her tax-exempt salary but she would work for another organization. Within a few months, she was working at the U.S. State Department.

All of this has been public information for years. What has not been public is the fact that just prior to Riza’s departure to the State Department, Wolfowitz himself authorized a significant pay raise – roughly $40,000 – for her. Combined with another raise, Riza now receives a salary of $193,000 per year. That’s more than the $186,600. her current boss, Condoleezza Rice earns before taxes. And, it’s the equivalent of about $270,000 if she were not to enjoy the ludicrous World Bank privilege of tax-free status.

Leaving aside the question of whether or not World Bank employees should continue to receive outrageous perks including tax-free income, subsidized education for children and so on, the conflict of interest and nepotism are so glaring in this case, that even restrained foreign government officials who and media are demanding that something be done.
Nepotism, Corruption, or Ignorance?

No matter how you classify these actions, things do not look good for Paul Wolfowitz. Another World Bank president may have been able to tough out such a scandal, but Wolfowitz has a number of problems, primarily of his own making, that make it exceedingly unlikely that he will be able to remain president of the World Bank much longer, and, if he does, that he will have any credibility to do anything with the beleaguered institution.

While many, myself included, are quietly hoping that Wolfowitz finds away to stay on, thereby dampening the institution’s ability to engage in harmful lending practices until the end of his five-year term in 2010, this is also an opportunity to push the agenda of governance reform within the institution. If Wolfowitz does leave, it will be very hard for the United States to maintain such tight control over an institution that has essentially served as an arm of U.S. foreign policy.

The biggest irony is that Wolfowitz’s primary (some would say his only) agenda inside the World Bank has been to call for its transformation into an organization that battles corruption. Wolfowitz, who has banded around phrases such as “0% tolerance for corruption” and talked about the need to move “decisively and energetically” on an anti-corruption agenda, probably regrets his choice of words at the moment. It is all too easy for Wolfowitz’s enemies, which include an estimated 90% of World Bank staff who opposed his appointment, to throw those words back in his face.

The World Bank Staff Association itself, which represents more than half of the Bank’s employees, called for Wolfowitz’s resignation last week. In an unprecedented move, Alison Cave, the Chair of the Staff Association said that Wolfowitz “must acknowledge that his conduct has compromised the integrity and effectiveness of the World Bank Group and has destroyed the staff's trust in his leadership. He must act honorably and resign.”

The anger that the Staff Association expressed last week at a meeting where Wolfowitz was shouted down with chants of “Resign!” must be understood in a larger context. Upon his arrival, Wolfowitz brought in two special advisors (paid astronomical salaries) from the Bush administration. Together with these advisors, Wolfowitz seems to be pulling the institution’s strings in ways that his predecessors never attempted, including ensuring that three out of five top-level management posts went to officials of governments who supported the Iraq War.

Since Wolfowitz’s appointment, about half of the Bank’s senior managers, either unhappy with Wolfowitz’s style or under pressure, have left. These and other developments leave Wolfowitz open to the claim that he is “neo-conning the Bank”.

Another reason that the situation is especially serious for Wolfowitz is that his allies in the Bush administration are either completely discredited themselves (think former Defense Secretary Donald Rumsfeld) or they are under fire from so many other quarters that they are unlikely to spend precious political capital to defend the indefensible. Bush himself is likely to prioritize defending his embattled Attorney General Alberto Gonzales and his own failing “surge” policy in Iraq over standing up for Wolfowitz.
Bigger Issues

Wolfowitz giving his girlfriend a more exorbitant salary than she had previously enjoyed is only the tip of the iceberg as far as World Bank governance is concerned. By convention, World Bank presidents are selected by the U.S. administration of the day. They are always U.S. citizens and are always sympathetic to U.S. interests. Among Wolfowitz’s predecessors is Robert McNamara, another architect of another failed U.S. war, namely that of Vietnam. The convention of giving the World Bank presidency to a man (they are always men) chosen by the president of the United States is one indication of a stark reality: when it comes the World Bank and its sister institution, the International Monetary Fund, the U.S. vote is the only one that really counts. When questioned on issues of accountability in a panel discussion, one senior IMF staff member reportedly answered “Of course I consult. I consult with U.S. Treasury all the time.”

And herein lies the real problem. These institutions, whether they are pushing governance reforms or economic reforms, insist that borrowing countries, and especially those countries that are the most dependent on aid flows, follow rules that no one in the U.S. or other developed countries follows or would be willing to follow. The Bush administration could do with a serious dose of the World Bank’s anti-corruption medicine, but even those who would support such reforms do not suggest using Bank-style strong-arm tactics to implement them.

In the short term, here are some proposed solutions that would at least begin to address the hypocrisy that this situation highlights:

1) Get rid of Wolfowitz. Compared with allegations of war crimes, the sweetheart deal corruption charges seem petty, or would if he had not made a war on corruption his raison d’etre for the last two years. But there’s no reason that he should not be held accountable. (Better yet, get rid of him and put him and the rest of the neoconservatives on trial for their war crimes in Iraq and Afghanistan.)

2) Implement meaningful governance reform. No this does not mean giving India and China a few more percentage points in token shareholder voting rights. Instead it means taking measures to ensure that the institution is democratized. Considering a more United Nations, one-nation-one-vote governance structure could be a first step in this direction.

3) Transparency is a prerequisite for accountability. We would not know about the current situation if some World Bank employee had not cleverly leaked the information to the press the week before their Spring Meetings. Why should we be discussing crimes that happened almost two years ago? We need real transparency (think C-SPAN at World Bank and International Monetary Fund board meetings) and real accountability for the mistakes of the past.

Wolfowitz hasn’t left yet but it’s unlikely he will last more than a few weeks longer. Whoever takes the job next will inherit an institution that has failed basic standards of accountability and transparency, and has not made a dent in its supposed mission of poverty reduction. The new president will certainly have work to do. Some good house cleaning, including implementing real accountability and transparency measures—for the bank and not just the countries that borrow from it—would be a good start. One more step may be to start talking about how the Bank can make reparations for its past sins, especially those of pushing a failed economic paradigm onto developing countries.

Sameer Dossani is the Director of 50 Years Is Enough: U.S. Network for Global Economic Justice and a frequent contributor to Foreign Policy In Focus.

Posted by Sameer Dossani at 03:40 AM

CNBC show on Wolfie. Me debating Stephen Moore from WSJ editorial board. Unfortunately, that made it two people who wanted the institution gone. Would have been nice to have someone who could defend the institution as well.

But alas, defenders are few and far between these days...

Here's the 4 minute segment. (It only worked on Internet Explorer for me)

Posted by Sameer Dossani at 03:32 AM

unprecedented security clearance for Shaha Riza Sidney Blumenthal of Salon.com reports that "Not only did the World Bank president find his companion Shaha Ali Riza a cushy job in the State Department, but she received a security clearance -- unprecedented for a foreign national" .... I smell another investigation.

Posted by A Washington source at 03:31 AM

Fire Paul Wolfowitz Campaign picks up steam. The petition launched by Avaaz.org has already been signed by over 43,000 - as of this writing - from 189 countries. Their goal is to reach 50,000 and send it to the board of Executive Directors of the World Bank and global media outlets. Avaaz.org has also released a video spoofing the TV program "The Office"--with Wolfowitz in the role of the awful boss.

Posted by A Washington source at 03:25 AM

The U.S may change its tune on Wolfowitz. Two articles today have interesting tidbits about US Treasury Secretary Hank Paulson's behind the seen efforts to change the White House's support for the disgraced World Bank President. The Guardian reports that "Paulson is pressing the White House to withdraw its backing from the controversial neo-con". While Steve Clemons reports in the Huffington Post that "Paulson can easily control his enthusiasm for Paul Wolfowitz,"

Posted by A Washington source at 03:11 AM

Worldbankpresident is back. Sorry to people who could not read this site today. It was down for a few hours, but is now fully back in action.

The reason: probably an amazing amount of traffic. Possibly something else (conspiracy theories are circulating, or it could be a technical hitch). More on that soon when our friends at Riverpath can take a look at the logs.

Our team of bloggers is redoubling its efforts to bring you all the latest intrigue and insight on this vital story.

Posted by Alex Wilks at 09:41 PM

Who's saying what A very good summary of quotes from World Bank's shareholding country representatives, US Government, and civil society on the Wolfowitz affair . You should also check out the Japan Times editorial "Time to go, Mr. Wolfowitz" Take a look also at this report from the Guardian "Bank investigates contracts linked to Wolfowitz". and this excellent report from Emad Mekay of IPS

Posted by A Washington source at 01:59 AM

It may be far harder to keep Wolfowitz ... Included in today's statement by the World Bank executive directors is the following passage: "In addition, the Executive Directors identified other issues that will need to be addressed, including the various public communications made by the Bank on the matter and issues around employment contracts made in the Office of the President." ....

In the paragraph preceding that statement, there is also the hint of looking into "..the contract of the President".

As Alex pointed out earlier, that clearly means that this investigation is expanding to include other hires by Wolfowitz, read , Robin Cleveland, Kevin Kellems, Carl Jackson, and Ana Palacio, who also served as a consultant in Wolfowitz' office before she was named General counsel.

But what does all this mean?... here is my take ...

- The board has reasons to believe there is at least the possibility of a pattern of abuse by Wolfowitz.

- A signal to Washington that, if the U.S. continues to support Wolfowitz, this investigation can drag on, and can devour other former U.S. officials, i.e. Cleveland and Kellems. Both served in the White House. Cleveland , it should be remembered, was implicated during her time with the U.S. government in an earlier nepotism scandal.

- Looking into Wolfowitz's own contract in light of the other issues they mentioned in that second paragraph, can also mean they are looking for ways to gracefully get out of it, or worst, hold him responsible for violating his own terms of employment.

- This broadening of the inquiry also buys the board more time to come to a consensus on getting rid of him. Which seems to be more and more the only sensible, and even possible way to extricate the reputation of the bank from becoming a symbol of hypocrisy and nepotism, in the eyes of its own staff, as well as the world at large.

In the event the board is unable to come to a consensus on how to get rid of Wolfowitz, they will have a far more complicated task on their hands. How to keep him on board in a manner that can be acceptable to the staff , NGO's, and the many reputable media outlets that have called for his resignation?

At this point, it will be far harder to keep Wolfowitz without the board itself losing respectability, especially in the eyes of the staff.

Posted by A Washington source at 11:17 PM

BUSH DRAWS UP LIST OF POSSIBLE REPLACEMENTS The best thing that can be said is that neither Bolton nor Rumsfeld are there...


That said, we activists need to be changing our message. No more pure "Wolfowitz has got to go" but rather "we demand transparency, accountability and an end to undemocratic processes driven by "gentleman's agreements" between the U.S. and W. Europe." If anyone can think of how to say that in a soundbite, please call me. I'm on MSNBC in two hours...

Posted by Sameer Dossani at 10:34 PM

Hats off to the staff of the World Bank Group. Much has been written about the loss of credibility of the world bank because of Wolfowitz's actions and words. I just wanted to also point out .......

that the actions of the staff of the bank, under the leadership of the staff association, have increased the credibility of the institution itself in my eyes. Despite the disgraceful actions of its president and his cabal. The staff themselves have demonstrated beyond any reasonable doubt that the institution itself has an internal group of professional staff with very high degree of integrity . They proved to themselves and others outside the bank, that , even - or may be despite their management and even board of directors, they will fight for good corporate governance and demand accountability from themselves and their leaders.

If the staff of other international organizations can do the same thing if faced with similar circumstances, we will all end up with far more credible organizations who represent the will of the international community.

Posted by A Washington source at 05:09 PM

On-line video carries Bank staff messages. Bored at your desk? Feel like a lighter view on the Bank's troubles? Look no further than the video that some renegade Bank staff have uploaded to YouTube. The video nods its head to British sitcom 'The Office', and reveals Wolfowitz to be in some ways as awkward and naive as Ricky Gervais' boss character.

For more Bank staff campaign activity see the Wolfowitz Resign blog.

Posted by Alex Wilks at 02:51 PM

Our dream is a bank free of Wolfowitz - Economist. Damn, why didn't we think of that? The Economist has said Wolfowitz should "resign voluntarily", and if not, "the Bank's masters should push him out".

The Economist has a go at Wolfowitz's "crass favouritism". They say "he is too secure in his own insights, unimpressed by the accumulated wisdom of the institution" and "an insecure manager, too impressed by bumptious aides".

The magazine calls for the "system of divvying up top international jobs by nationality" in favour of a competitive global search. Unfortunately, they cave in to the usual 'time pressures', pushing for the installation of "an internationally respected American at the bank". Their choice? Another old favourite from the last horse race in 2005, Stan Fischer, the governor of the Bank of Israel who has worked at both the IMF and the World Bank.

Posted by Jeff Powell at 02:30 PM

You Wanna Bet? Bloomberg's update today carries odds on Wolfowitz's departure: "Online futures traders are betting there's a 20 percent chance Wolfowitz will resign by the end of this month, according to Intrade, an electronic exchange based in Dublin. The odds for him to depart by the end of June are 40 percent."

The same article also reports that The Economist has now called for Wolfowitz to resign. And it has its own shortlist of candidates, most of them now "usual suspects": Zoellick, Dervis, and Afghan Finance Minister Ashraf Ghani, who has earned his place courtesy of the Times of London story cited earlier by our Washington Source.

Posted by Soren Ambrose at 02:10 PM

Crank up the (crackpot) rumour mill. Washington Post columnist Al Kamen has raised some of the usual suspects (Zoellick, Dervis, Summers), as well as some unusual suspects.

Worldbankpresident.org faithful from 2005 will recall the buzz around:

  • Robert Zoellick, former deputy secretary of state and US trade representative;
  • Kemal Dervis, Turkish national, currently head of the UN Development Programme;
  • Larry Summers, the former Treasury secretary bounced recently as president of Harvard;

Kamen throws a couple of wild cards into the pack.

  • US Attorney General Alberto "Fredo" Gonzales, though Kamen concedes that "he lacks banking experience and other requisites"; and
  • Ahmed Chalabi, the former deputy prime minister of Iraq - "Sure, Chalabi had that little bad patch in Jordan, where he was convicted of embezzlement and fraud, but that's old news".

Posted by Jeff Powell at 12:53 PM

Mata Hari One question troubling the inquiring minds at worldbankpresident.org is who leaked the Riza pay rise documents (not to mention those troublesome board minutes to Fox news back in January)? No smoking gun yet, but some interesting theories making the rounds inside the Bank...


You're a bit worried that someone has the details on the girlfriend's raise, so you want to find out who, given that the large increase was already leaked to the Board (and blown off) and now there's an egregious annual raise on top of that. Why are you so worried? Well, maybe you were worried about being discovered, and being accused of having given bad advice.

In parallel, Paul Wolfowitz realises he's being badly served on other matters, VPs are grumpy, you've had problems with not knowing what's going on, others you've brought with you are hearing how bad things are. You're worried, so you take a copy because you were involved, and now you might be in trouble.

Of course, why were you so keen for Shaha to get such a good deal and a quick exit back in September 2005 after the Ethics Committee's thorough review of the conflict of interest stuff and your personal, sole-sourced choice of the legal counsel to advise the Bank on the terms of Shaha's sweet deal. Maybe you didn't want her around, too. And why might that be? Two of you advising on Bank business? Hmmmm, who's closer? Of course, having been involved in making funds available to DoD for all that democracy building work in Iraq in the aftermath of the invasion, you might well know how she got there, and how the contracting should of worked. After all, you oversaw all that money coming from OMB to DoD. And now there was a girlfriend going to Iraq.

This one might explain why Wolfowitz was reportedly willing to sacrifice one of his inner sanctum in a recent desperate attempt to cling to power.


Another possibility is that I was involved in the disposition of the first deal, and I was having my own problems at another international organization and used contacts in the Bank to lay hands on what really happened. Or maybe I had been forced out for having been told to butt out in the first place. Or maybe I wanted to be sure that my role in the leak to Fox News didn't get fully investigated, because "I know what you directed" and without me, by mid-March 2007, you can't run the place. So drag your feet about agreeing to the Board's hiring counsel to investigate after OJ Simpson turns up nothing.

Any theories of your own? Tell us at contact@worldbankpresident.org

Posted by Jeff Powell at 12:35 PM

Xavier Coll latest to join blue ribbon campaign. As announced here yesterday, Bank staff have been distributing blue ribbons as a symbol for their "continuing struggle for improved governance in the World Bank Group" - latest to join the campaign according to a Bank insider is senior human resources officer Xavier Coll.

Coll you'll remember is in the middle of this mess - at question is what role he played in approving the conditions of Shaha Riza's re-assignment and whether or not he was consulted on the terms offered to Wolfowitz acolytes Robin Cleveland and Kevin Kellems.

On Thursday afternoon the staff association was handing out blue ribbons inside the Bank. In walked Xavier Coll with another VP.

"Would you like one?", asked the Bank staffer.

"What are they for?", responded Coll.

"They're to show your support for governance."

Xavier continued, and then turned around, and said, "what the hell" and took one and put it on.

A few minutes later, Robin Cleveland walked in. She was offered a ribbon. She said "is this a staff association thing?" and was told it was. She replied "well, I guess you know my position on this" and declined the ribbon.

The staff then went and put it on the wrist of the statue of the blind man in the atrium. River blindness statue. No reports on whether it's still there today.

Posted by Jeff Powell at 12:07 PM

The case for the defence. A "sexist" World Bank. Former US World Bank Executive Director Robert Holland has written a scathing critique of the Bank in his defence of Paul Wolfowitz in today's Wall Street Journal.

Not only does Holland believe that Wolfowitz "acted in good faith" throughout the re-assignment of Riza, but he alleges that "several members of senior management" pressured her to leave the Bank while Wolfowitz's nomination was pending. Why? Holland suggests that it is because Riza is an advocate of women's rights, and "the pressure to which she was subjected was typical of a culture that many female employees frequently complain is oppressively sexist."

But that's just where the excoriation of the Bank starts... His main argument is that Wolfowitz critics are opposed on the basis that his anti-corruption work will result in lower lending levels at a time of increasing competition for the Bank from the private sector, other multilateral banks and sovereign lenders such as China. Lower lending would mean less interest income with which the Bank pays its administrative expenses. Holland accuses the staff association and legal department of creating a "system of such Dickensian complexity" that no one - even the most incompetent - can be fired.

Next in Holland's line of fire is the board. He suggests that the board's
ineffectiveness is due to: its unwieldy size; the frequency of its turnover; the "imperatives of gaining loan approvals for borrowing country directors"; the high compensation enjoyed by board members; and "parochial foreign-policy interests, including those of the US".

Posted by Jeff Powell at 11:31 AM

Medieval Catholic schism? The FT has warned that the Bank could split into openly warring factions like the great schism of the medieval Catholic church - with one faction led by Paul 'Gregory' Wolfowitz and the other by Graeme 'Benedict' Wheeler.

It is not clear if one pope may be able to defeat the other. According to the FT, while White House support remains for Gregory, the European members of the Bank’s board can protect Benedict and the other rebels, and prevent any attempt by the the weakened pope to fire them. With Benedict protecting them in turn, less senior staff will be free to continue to challenge Gregory and his loyalists.

Which begs the question, who will step forward in the role of Charles V to propose a general council to elect an undisputed pope? Could it be the French once again?

Posted by Jeff Powell at 10:52 AM

What the EDs said: the 19th April board meeting statement. We are happy to bring you the text of the Bank board statement agreed yesterday evening. Also happy that the board seems to have broadened the scope of its enquiry. They're not just looking at the Riza affair, but at 'a number of issues' including 'employment contracts made in the Office of the President'. The board's ad hoc group is supposed to make 'early recommendations' for decision by the Executive Directors. How early though?

Communication from the Executive Directors of the World Bank Group

Washington DC, April 19, 2007 - The Executive Directors met on April 19 to address the current situation in the Bank, which is of great concern. Based on the clear guidance of the Development Committee, the Executive Directors agreed on a process to deal with the situation urgently, effectively and in an orderly manner.

Having reviewed the April 11 report of the Executive Directors’ ad hoc group and the associated documents, the Executive Directors discussed questions related to conflicts of interest and possible violations of Staff Rules. They identified a number of issues requiring further consideration. They requested the ad hoc group to consider immediately the arrangements made for the secondment of the staff member closely associated with the President. In that context, the ad hoc group will consider such other information as it deems appropriate, with reference to, inter alia, the Staff Rules, the Code of Conduct applicable to Board officials and the President, and the contract of the President, and to conflict of interest, ethical, reputational, and other relevant standards. On this basis, the ad hoc group will make early recommendations for decision by the Executive Directors.

In addition, the Executive Directors identified other issues that will need to be addressed, including the various public communications made by the Bank on the matter and issues around employment contracts made in the Office of the President.

The Executive Directors asked the Board’s Committee on Governance and Administrative Matters (COGAM) to make recommendations to the Board on issues of internal governance.

Executive Directors or their staff reading this may want to avail themselves of my guide to the ten allegations against Wolfowitz.

Posted by Alex Wilks at 09:54 AM

'Key players take their distance': Fox News. Coming from Fox, which has supported Wolfowitz strongly in current months, this is definitely bad news for Paul Wolfowitz. Two key players in the scandal over his girlfriend’s compensation package have further distanced themselves from Wolfowitz's actions.

Former General Counsel Danino
First is the Bank's top lawyer at the time, former prime minister of Peru Roberto Danino.

The bank’s former general counsel told Fox he didn’t know the final details of Riza’s pay-and-promotion deal by September 2005 — when the deal was finalized — because Wolfowitz cut him out of the loop. Asked why he believes this happened, Danino told Fox; “Because [Wolfowitz] didn’t like my advice.”

That advice to the bank president, offered in late May 2005 — a month before Wolfowitz took over the presidency on July 1 — was that Wolfowitz’s initial offer in May to recuse himself from all personnel matters involving Riza (while retaining “professional contact” with her) didn’t go far enough to resolve the conflict of interest. Wolfowitz appealed Danino’s decision to the board’s ethics committee, which backed the view of the general counsel. Danino is scathing about the document extracts released by Wolfowitz's office on Saturday (see my previous post). Danino's legal opinion on the extracts: "false, very misleading; that was not the advice rendered to the president — at no time.”

After his advice was turned down things went from bad to worse for Danino, making him one of the first senior casualties of the Wolfowitz administration (for others see this post). Fox News continues: Danino says that his relationship with Wolfowitz never recovered. “It started with this, but then he basically avoided all professional contact with me.” Danino, who served as prime minister of Peru from 2001-2002, says this shunning by Wolfowitz prompted him to resign as the bank’s top lawyer in January 2006.

Ethics Committee Chair Ad Melkert
Richard Behar, the journalist who contributed the Fox article, has this to say on Ad Melkert. Melkert's full memo released a couple of days ago is below.
Melkert, now the No. 2 official at the United Nations Development Program, denied in an email yesterday to Fox News that the committee “was aware or should been aware of the terms and conditions” of Riza’s contract. He said the role of the committee was “to advise, not instruct” Wolfowitz about the matter. “I never saw the full official terms,” he tells Fox News. Nor, he adds, did he ever attempt to learn what those details were.

“It was Mr. Wolfowitz’s decision not only to instruct [human resources chief Coll] to settle the matter, but also to direct the terms and conditions,” insists Melkert. “Whether or not those terms and conditions were reasonable, in the context of the bank’s standing practice, was entirely management’s [Wolfowitz’s] responsibility.” As such, the ethics committee had no basis for separately probing the Riza salary terms in 2006, Melkert added.

Melkert's full memo, sent to www.worldbankpresident.org by another journalist, is below.


17 April 2007

As the former Chair of the Ethics Committee, I reject any direct allegation or suggestion that the Ethics Committee was aware or should have been aware of the terms and conditions of Ms. Riza’s contract for her secondment outside of the World Bank.

The following facts are relevant for clarification of different roles and responsibilities.

 The Ethics Committee of the Executive Board, on the basis of established procedures, advises on ethics matters involving Board members, including the President of the Board. It is an exclusively advisory body that cannot assume responsibilities belonging to individual Board members or the Executive Board or the Board of Governors as statutory organs. The responsibility to advise on staff issues resides with management and other bodies at the Bank.

• In the case involving President Wolfowitz and his partner, the precise role of the Ethics Committee was to advise – not instruct -- Mr. Wolfowitz, as a member of the Board, including in his responsibilities as Executive Head of Management, on options for terminating professional contact between himself and the staff member concerned. Given its remit, it was never expected, nor would it have been appropriate, for the Ethics Committee to have had any involvement in the terms and conditions of any arrangement for the staff member.

• The Ethics Committee did not consider sufficient Mr. Wolfowitz’s proposal to recuse himself from dealing with Ms. Riza. It advised him to ensure that she would not any longer be under the scope of his authority and to consider different options for the staff member: either a position within the Bank beyond the scope of his authority (such as the Evaluation Group) or a secondment outside the Bank or a separation – in all cases with a possible arrangement that might take into account compensation for the interruption of the staff member’s career at the Bank.

• As the Ethics Committee can not and should not deal directly with staff matters, its responsibility was to advise the President on options, and it was then up to the President to instruct relevant managers on how to proceed. Technical documents provided by Bank management to the Ethics Committee had given rise to the expectation that in pursuing any of the potential options, normal practice and relevant staff rules would be taken as the guideline for implementation. It was Mr. Wolfowitz’s decision not only to instruct the Vice President of Human Resources to settle the matter, but also to direct the terms and conditions.
• Mr. Wolfowitz informed me on 12 August 2005 that he had decided that the potential conflict of interest would be solved by having the staff member detailed outside of the Bank. After and because this had been implemented, I informed him on 24 October 2005 that the Ethics Committee considered the matter closed. At no time did Mr. Wolfowitz or anyone else in Bank management disclose to the Ethics Committee the terms and conditions of the external assignment. Whether or not the terms and conditions were reasonable, in the context of the Bank’s standing practice, was entirely management’s responsibility.

The advice of the Ethics Committee (to consider having the staff member redeployed beyond the authority of the President and to take into consideration appropriate compensation for the interruption in her career) was a good faith effort to meet some of the personal concerns (of Mr. Wolfowitz in his personal relationship) whilst saving the Bank from a damaging ongoing debate on the potential conflict of interest.

There are also different perceptions on the role of the Ethics Committee relating to anonymous emails received by all Board Members in January and February 2006. The Ethics Committee reviewed the matter as follows
 In the case of Ms. Riza the Ethics Committee was not in a position to comment on any salary increase for the same reason that led to its earlier conclusion that it could not become involved in the original negotiation of her terms and conditions, i.e. these were the responsibility of management.
 The cases of Ms. Cleveland, Mr. Kellems and Mr. Jackson centred on management decisions vis-à-vis staff and therefore did not pertain to the Ethics Committee’s role. For that reason the Ethics Committee informed Mr. Wolfowitz that they did not appear to pose ethical issues appropriate for further consideration by the Committee.

Posted by Alex Wilks at 09:13 AM

Can it be true? The London Times is reporting this morning that "Bush draws up list of candidates to replace Wolfowitz". If true, then Wolfowitz has indeed lost the fight to keep his job.

Fascinatingly the Times thinks the White House might be considering appointing a non-American muslim as the next World Bank president? The man they tip is Ashraf Ghani, former Afghan finance minister. Ghani also worked at the World Bank for ten years.

Alex Wilks comment. 20 April, 03.45 EST.
Among the aspects of Ghani's CV which may differentiate him from the outgoing World Bank president. According to his Wikipedia bio: Ghani "joined the Afghan government as the chief advisor to President Karzai on February 1, 2002. He has worked on a pro bono basis and was among the first officials to disclose his assets."

For intriguing aspects of how Ghani came to leave the World Bank see an article I wrote in 2001. Ghani was forced to take unpaid leave for the Bank for the crime of writing an article for the Financial Times. At the time the World Bank Staff Association rallied strongly to Ghani's defence. What does the Staff Association think of this idea now?

Posted by A Washington source at 02:15 AM

Blue Ribbon - Testimonial to Good Governance. The Staff Association has just thrown its weight behind the Campaign. In an email to all staff, Alison Cave writes:

Dear Colleagues,

The Staff Association has been distributing blue ribbons as a symbol for our continuing struggle for improved governance in the World Bank Group. More will be available on Friday afternoon. You may collect them from the following places: Main entrances -- MC, J, H, I and IFC buildings. Staff who are in satellite buildings may pick one up at these entrances or in the SA Office, Room. MC-1-700.

Let us continue to wear them until a satisfactory solution is found to this crisis.


Alison Cave
World Bank Group Staff Association

Posted by A Washington source at 12:34 AM

And you thought Bolton was a scary thought? The quest to scare us with thoughts of who Bush might come up with if he's allowed a second crack at nominating the WB president for 5 years had reached its high-water mark with the suggestion of John Bolton, former U.S. Ambassador to the United Nations. That looks like mere child's play, however, now that Bloomberg columnist Matthew Lynn, after making clear his affection for Wolfowitz and mentioning usual suspects like Bono and Clinton (and that more recent, and slightly more plausible idea, Blair) comes up with ... former US Defense Secretary Donald Rumsfeld!

Posted by Soren Ambrose at 09:27 PM

Dear Board of Directors : A proposal to solve the impasse. (Update 1). A friend of mine in the bank today offered the following proposal , which I find very worthy.

Since it is unlikely that the board will make any decision quickly on this matter, at least until the inevitable horse trading takes place, and by that I mean, which country wants what in exchange for which vote.

My friend proposes that the board should immediately appoint a Deputy President for the World Bank Group. Some one who can satisfy the demands of all the constituencies involved. Preferably someone from a developing country, who can easily gain the trust of the staff, start immediately to heal the institution, and can put a respectable face on the crucial IDA round.

My friend suggests , the highly respected Dr. Ngozi Okonjo-Iweala of Nigeria. If you don't know who she is, here is her bio.

This will help rescue the institution from paralysis while governments haggle over the fate of Paul Wolfowitz.

You know what, I agree with him.

Comment. Alex Wilks. 04.15 EST, 20 April.
In fact this suggestion was made by worldbankpresident.org contributor Soren Ambrose exactly a week ago. He also spotted Ngozi as an option and gave a detailed run-down on why a Ngozi shoe-in by the White House would not be acceptable to some civil society groups. See his post here.

Posted by A Washington source at 08:04 PM

Civil society steps up pressure. More and more civil society groups are joining the call for Wolfowitz to go.

Over 40 European organisations have signed a statement backing the Wolfowitz resignation call and urging a comprehensive overhaul of World Bank governance.

George Gelber, head of policy for the Catholic Agency for Overseas Development, said the bank should force Wolfowitz to resign amid allegations of corruption. "Paul Wolfowitz has made corruption an essential part of his personal policy platform, not only in the bank but also among all major donors," Gelber said in a more detailed statement.
"But now his actions have so damaged his own credibility as an anti-corruption campaigner that his position at the bank is untenable and he should resign. If he will not resign, then the bank board must ask him to leave."

South African trade unions and many others are also making the call in separate statements and appeals. Will government representatives listen?

Posted by Alex Wilks at 07:35 PM

US position shifting, but concessions demanded. The Bank's board is meeting in one hour's time to discuss the Wolfowitz saga. We hear that the US government is softening its support for their man in the Bank. But in exchange are asking the Europeans to agree to let the US appoint a successor. This is a trade that should not be needed: the system of unilateral appointment to run a multilateral organisation has proved a spectacular failure and should be got rid of with Wolfowitz.

Posted by Alex Wilks at 07:06 PM

The China: Africa link. (Update). Pundita makes another suggestion for why a few African ministers supported Wolfowitz at the weekend. China.

The argument: "if the Bank stopped being a lender. Well, that would mean less competition for China's very destructive lending policies in the poorest countries".

An ingenious argument, but a more complicated than those who simply say that people close to the Bank president used straight threats or inducements.

Pundita also pronounces on an extra reason why Bank staff are cutting up so rough. "Paul Wolfowitz and the American aides he brought into the World Bank never considered that Bank mandarins who are expats will fight for their jobs with a fierceness that even a Pentagon general can't muster. A Pentagon mandarin who is forced out of the US military doesn't have to leave America; unless a Bank employee immediately finds other employment in the US, he has no choice but to leave if he's fired or forced out of the Bank".

It's true that many Bank staff have visas dependent on their World Bank contract. And that that often makes them cautious. But that's why it's so amazing that so many staff at all levels are speaking out, and that the Staff Association chair has firm backing to take a very strong line.

The Economist also has a long piece analysing the Bank staff situation. "In their rage, the staff have shed all deference and discretion". Why? "Some of the bank's professionals complain that he is too secure in his own insights, unimpressed by the accumulated wisdom of the institution. That intellectual temperament may explain both his enthusiasm for invading Iraq and his lack of support in an institution that prides itself on its expertise. His underlings dislike the sectarian style Mr Wolfowitz seems to share with the man who appointed him. The career staff resent his richly rewarded inner circle, drafted in from his past."

For me the vocal Bank staff comments are a clear demonstration that the Wolfowitz saga has reached a point of no return. Staff would not risk their status if they thought he'd continue and be in a position to do a witch hunt to remove them.

Pundita posted another story on 24 April with a clarification following feedback from her readers. She renames the Hilary Benn fallacy the Jeffrey Sachs fallacy, and says that the worldbankpresident.org website has "helped avert world war". Wow!

Posted by Alex Wilks at 06:54 PM

Will Daboub go down with the sinking ship? An LA Times piece turns up the heat on Wolfowitz-appointee, Managing Director Juan José Daboub, for his attempts to single-handedly take the Bank out of the family planning business.

Daboub has denied that he either urged deletion of reference to family planning in the Madagascar assistance plan or did likewise in the Bank's global health strategy. A Bank staffer who had seen the Madagascar report called that denial "a blatant lie". US NGO Government Accountability Project has the email trail to prove it.

"There's mismanagement there," said Carmen Barroso, a regional director for the International Planned Parenthood Federation. "Wolfowitz appointed a guy in a very high position who felt free to censor in line with his personal beliefs. I think that's good grounds for sacking." Which may explain why Daboub, unlike Wolfowitz's other Managing Director, Graeme Wheeler (see yesterday's post), has supported the embattled president. His fate depends on it.

For a reminder about how many other senior Bank staff have been appointed by Wolfowitz, many bringing heavy political baggage, see Alex's previous post.

Posted by Jeff Powell at 05:20 PM

Rogoff backs Manuel. In a comment in UK daily The Guardian, former IMF chief economist Kenneth Rogoff calls for Wolfowitz to step down, and gives a nod to South African finance minister Trevor Manuel.

Rogoff makes a cogent plea for reform of the leadership selection process at the Bank: "even if Wolfowitz is eventually forced to resign, nothing will be gained if the US president George Bush is allowed summarily to choose his replacement, as US presidents have been doing ever since the Bank was founded after the second world war. Instead, the Bank's head should be chosen in an open and transparent process that aims to select the best-qualified candidate, whether from the US, Europe, or the developing world."

Posted by Jeff Powell at 01:15 PM

Wolf vs. Wolf: WB regions take sides. The civil war within the World Bank, described by our Washington Source, is delineated by Krishna Guha and Eoin Callan in today's Financial Times. While the side-taking takes on a regional hue, it's basically departments dominated by Wolfowitz appointees versus departments dominated by Wolfensohn appointees, they say. They also say the managers for an entire region are threatening to resign en masse if Wolfowitz doesn't go.

Their reading of the break-down at the Bank:

"Those from the bank’s Latin America region expressed strong support for [Managing Director Graeme] Wheeler’s position [calling at an upper-management meeting for Wolfowitz to resign for the good of the Bank] and agreed to threaten to resign en mass if Mr Wolfowitz stayed.

"The East Asia and South Asia management teams also appeared to side with Mr Wheeler and against Mr Wolfowitz.

"Meanwhile, the Africa and Middle East managers looked to be siding with Mr Wolfowitz.

"The fissure that has opened at the top of the bank mirrors a gaping divide throughout the institution between Wolfowitz loyalists and the majority of officials who were there under his predecessor, Jim Wolfensohn.

"The regions leaning in favour of Mr Wolfowitz are headed by officials appointed to vice-president rank by him; the regions leaning against him are headed by vice-presidents from the Wolfensohn bank.

"At the vice-president level, the number of Wolfowitz appointees and Wolfensohn era executives is roughly equal. At all other levels of management and staff, officials from the Wolfensohn bank greatly outnumber the Wolfowitz appointees."

Posted by Soren Ambrose at 11:07 AM

Fire the Board, too. Another former World Bank VP, Armeane M. Choksi, writes in a letter to the FT that if one is going to call for Wolfowitz's resignation, one should also be calling for the resignations of the institution's executive directors (the very people so many are urging to fire Wolfowitz). "As the recent document release indicates, the board was fully complicit in everything Mr Wolfowitz did and actually approved his actions and decisions not once, but twice." Fair point.

Posted by Soren Ambrose at 10:56 AM

A blue ribbons campaign . Internal world bank bulletin boards and emails circulating around the institution are urging staff to wear blue ribbons in the next few days as a symbol of their demands for the resignation of the disgraced world bank president, Paul Wolfowitz.

Posted by A Washington source at 03:20 AM

Civil War inside the World Bank... The battle lines in the Wolfowitz-Shaha drama are coming sharper into focus. There are three main constituencies in this battle. Wolfowitz and his small number of supporters whose careers are tied to his, the Staff Association which clearly represents the majority of staff, and the board of executive directors, which represents their respective countries.

It has become very clear yesterday and today ( see HERE, HERE and HERE) that the Staff Association represents the views of not only a small unhappy group, but has broad base support in the entire institution from top to bottom, including former senior staff . Wolfowitz and his group, seem to have only the white house in their corner, and showing all the characteristics of a weasel who does not know what a dignified exit looks like, Wolfowitz still pathetically hangs on to his office, despite the costs to a once respected international institution. . While the board of directors, having been abandoned by their Ministers , who chickened out of making the only possible credible decision at this stage to ask Wolfowitz privately to step down, or vote him out of office publicly, are now struggling, as mid-level bureaucrats of Finance Ministries are known to be, to make a decision bigger than they are. This does not abode well for a global institution and the millions of the poor who depend on it around the world. It is shaping up to be a crisis , far deeper than an "Unacceptable impropriety" , its a crisis that shows the sham of the notion of a capable international community and its deep lack of self respectability to even address the matter decisively.

I'm taking bets that this board of impotent executive directors will only meet tomorrow to figure out a way how not-to-fire Wolfowitz and still maintain some respectably. My bet is that they can't do both. They must choose, Wolfowtz OR a credible World Bank ?

UPDATE. (Comments from a World Bank staffer, submitted by e-mail. Added by Alex Wilks, 19 April, 03.05 EST).
The FT article on the meetings in Regions Wednesday afternoon is a bit off the mark. In Africa (currently 'led' by an acting who has shown himself rather compliant to Robin's and Daboub's wishes, for reasons we won't go into but which may have to do with wanting to be a VP), middle management (who do the work and manage the people, in Washington and in country offices) were vehement he must go, he does Africa no good, the minister props were cheap, etc. Reflects what staff in Africa, and everywhere else, are saying.

Africa Region Directors (rank below VP) were more guarded, presumably waiting for the new, PW-appointed VP (founder of TI Nigeria, "Mme Due Process", with the conservative evangelical husband) to know which way the wind would blow in a post-Wolfowitz--or maybe not--change of management in Africa. As Obey looked like the first qualified PW appointment, there was some hope, even though the haste between finding her and sending her reference checks to Juan-Jose Daboub and announcing her appointment was breathtaking. Much like having 24-hour turnaround to find outside counsel for the Bank to negotiate Shaha's sweet deal. Interesting it took just 24-hours for PW to find a outside counsel for him to replace Robert Danino in contract "negotiations" with Shaha, but two months for Ana Palacio to find outside counsel for the Board to check out the leaks to Fox News. Of course, since everyone suspects they came from the only person with access to the drafts, no familiarity with how well discussions with the Board were actually going on GAC and Fox News on her BlackBerry's speed dial, Mr. Wolfowitz was perhaps in no hurry, having fought tooth and nail not to have the leaks investigated.

Legal staff are gleeful about Ana Palacio's scrape with legal ethics and hiring outside counsel, and her lame 'clarification' on her choice of Williams & Connolly which got disdainful reviews on the in-house bulletin board this afternoon. (That was on a part of the Bank's Intranet that does not have a write-in comment section, but late in the day it had crept up to only two stars out of five and she was being called on to resign on the main "Spring Meetings Wrap-up" item where Internal Communications had moved the discussion mid-afternoon.) Like PW, Ana's limiting outside appearances, not travelling to Tunis this weekend for the annual get-together of the IFIs' general counsels. She'll be leaving soon enough, most believe.

No one has been by 1800 G Street to check out what Shaha's office looks like, and none of the Bank staff who work in that building (across the street) report having been greeted--warmly or not--in the elevator by their old colleague.

A country director who was at the lunch said that Mr. Wolfowitz came with a prepared pep talk (funny, that) including apologizing (again). Pressed, he reverted to the "I got bad advice and it was an unprecedented situation", which created some problems since it's country directors' spouses who have to give up their jobs, and careers, unlike Shaha. As the questioning continued about the circumstances under which he must might resign, out came the retort that "if I'm pushed out, the Bank will be terribly damaged". Most of them concluded at that point that he was "delusional" about the situation, and the damage he'd done and would continue to do.

Word is circulating, as well, that not one of the VPs supported his staying, with varying degrees of diplomacy. None. Zero. Their frank talk yesterday continued this morning, and while not all agreed Graeme Wheeler's reasons PW should leave were the best ones, everyone agreed they were compelling, and delivered with feeling and persuasion, nonetheless. One VP apparently told Wolfowitz "I've fired people for less than that."

Thursday should be interesting. Wolfowitz has told the board he won't be chairing the 10 am meeting, which had a light agenda anyway. The board is reported to be meeting in private at 4, which gives them time to see if a third newspaper can be found to support him, anywhere in the world. Juan-Jose Daboub will deliver a 10 minute welcome to yet another learning event ("Capacity Day") and everyone's waiting to see whether, like Wolfowitz on Monday, he blows off the photo op. People aren't planning to absent themselves from the room tomorrow during his remarks, since it may be his last public appearance before the coalition of reproductive rights groups, AIDS activists and environmental NGOs push him over the side with Wolfowitz during their meeting this weekend in Washington.

Must go to check the blue ribbons for tomorrow. One to wear, one to give to a colleague.

Posted by A Washington source at 01:42 AM

"See topics below and tell what YOU know" A blog said to be set up by some world bank staff is being passed on inside the bank from one email to the next. The blog links also to a petition to sack the already disgraced president of the bank, Paul Wolfowitz. The Petition has been signed by over 39,000 people as of this writing.

Posted by A Washington source at 11:33 PM

World Bank, target of laughs. The most famous comedy show in the US , the daily show, hosted by Jon Stewart has the following take on the Wolfowitz Affair.

Posted by A Washington source at 11:02 PM

The Deepest Cut: Sarcasm The ultimate "insider" columnist with the Washington Post, Al Kamen, pours his vitriol on Paul Wolfowitz. Kamen detects echoes of Bush's post-9/11 logic: "Wolfowitz's supporters say the controversy is really about corruption: Either you're for it or against it. Wolfowitz is against it. His enemies, therefore, are for it."

"Okay, maybe his campaign against nepotism and fraud and such might have been a tad undercut by Raisegate. But remember, transparency is important. And, as he told reporters, 'I didn't hide anything that I did.'

"Indeed, he typed, checked the margins and spacing, looked for spelling and syntax errors, and then actually signed an order directing that his girlfriend be given a promotion, a raise of about $50,000, and then some fine future raises and promotions after she went, still on the World Bank tab, to work at the State Department.

"Contrary to the impression left by the media, those future promotions were not automatic. The order said her performance outside the bank would be reviewed by a 'committee of her peers' acceptable to her. (The directive doesn't say so, but custom dictates that no more than one committee member can be a close relative and no more than one can be a former college roommate.) Wolfowitz also indicated that he was under intense pressure to resolve this and was concerned Riza might sue the bank -- though we're told the bank has sovereign immunity.

"And he's admitted he made a 'mistake.' Why isn't that enough? his supporters ask. Well, the answer simply must be that the pro-corruption crowd -- the Brits, French, Germans, Dutch, Italians and other Euros, who in all provide around 40 percent of the bank's loans to poor countries -- somehow are worried that recipients might be forced to be honest. And the Euros include some 'Wolfowitz haters' who, not coincidentally, also hate freedom." [recall that Bush's consistent explanation for why "folks" like al-Qaeda do what they do is because they "hate freedom."]

Posted by Soren Ambrose at 10:49 PM

Bank board meeting Thursday to make decision? Sorry: misleading headline. Don't get your hopes up on the decision. Sources only say that the World Bank board has cleared its agenda to 'debate' the Wolfowitz issue. Not necessarily to do anything conclusive.

The AFP story is on South Africa's Fin24 and other sites right now.

The story also covers the latest White House announcement on the affair. Earlier today, the White House said the former deputy Pentagon chief should keep his job, and denied he had damaged the World Bank's fight against corruption. "We'd like to see him remain," presidential spokesman Tony Fratto told reporters.

Denied he'd damaged the World Bank's fight against corruption? Surely not the strongest argument the White House has ever made.

Posted by Alex Wilks at 10:26 PM

Bank Ethics Committee chair spells it out. Leading Dutch financial paper Der Handelsblatt carries comments (Dutch) from Ad Melkert, chair of the Bank's Ethics Committee when the Riza pay rise was agreed. Melkert strongly denies that the Commission oversaw the Riza deal.

"As former chairman of the Commission I reject all direct allegation or suggestion that the Commission was in the know, or should have been in the know, about the terms and conditions of the contract of Mrs Riza for her transfer outside the World Bank."

Melkert claims he only gave Wolfowitz some advice, but did not instruct him to act in any particular way. It was anyway not the brief of the Ethical Commission to adjudicate on compensation levels, and he says Wolfowitz had decided to instruct the personnel department himself, as well as dictating conditions.

[Thanks to JB for the spot, and translation.]

COMMENT, 19 April, 03.10 EST
This article includes a more extensive explanation
from Ad Melkert (sp?) explaining what the role of the
Ethics committee is and isn't, and basically putting
all the responsibility for doing the appropriate thing
on Mr. Wolfowitz. (Note: the first few paragraphs is
on other United Nations stuff--if that doesn't
interest you, then just keep scrolling down until you
get to the part on Ad Melkert):

Posted by Alex Wilks at 10:18 PM

Current Managing Director of the World Bank asks Wolfowitz to resign. (Update 1). During a management meeting this morning that included the two managing directors of the world bank and all Vice Presidents, the highly respected Graeme Paul Wheeler, one of the two current managing directors asked Wolfowitz directly to resign from the bank to save the reputation of the institution and current round of funding for bank coffers.

Update (Alex Wilks posting, based on Bank staff e-mails to me).

In the same meeting described above I'm told that the World Bank president offered to reorganize his office, rebuild trust, get rid of his adviser Robin Cleveland. He was told this was not enough, and it would not work.

In a separate meeting this afternoon Country Directors also called on him to resign, telling him that if he truly cares about the institution he'll leave. Again - he refused.

Posted by A Washington source at 09:36 PM

A "Euro-bureaucracy-media putsch"? Jim Lobe at Inter-Press Service cites and skewers several US commentators desperately rallying in Wolfowitz's defense. The "Euro...putsch" soundbite is the pick of the bunch, but the sense is everywhere the same as Soren reported here yesterday. Lobe's original thought is that those defending Wolfowitz's from the allegations of cronyism and dodgy dealing at a multilateral institution were "among the most aggressive in attacking former United Nations Secretary-General Kofi Annan for alleged nepotism on behalf of his son".

Lobe's analysis covers the editorial writers of the Wall Street Journal, contributors to the National Review, and a senior fellow at the Foundation for Defence of Democracies.

He argues "The neoconservative role in vigorously pressing the campaign to discredit Annan for his presumed nepotism and force his resignation stands in sharp contrast to its efforts to protect Wolfowitz from similar charges in connection with his role in personally arranging an exceptional promotion and salary increase for his girlfriend."

Double standards by the neo-cons? Well I never.

Posted by Alex Wilks at 08:29 PM

Wolf bites Wolf. Senior columnist and ex-World Banker Martin Wolf bares his teeth in the Financial Times. The victims? Both Paul Wolfowitz and the ministers who left Washington without taking a clear decision.

Wolf’s cutting points: “The moral authority of the bank is in the dust. Only one decent outcome of this tragically unnecessary affair exists. The cause on which so many rightly agree is bigger than the fate of one man”.

“I agree with Mr Wolfowitz that fighting corruption matters. But the institution must lead by example. Using his office to obtain what seems an extraordinarily favourable deal for his girlfriend is not, by the standards of our world, more than a venial sin. But his position as leader of the world’s most important multilateral development institution and, above all, one dedicated to the fight against corruption makes it so.”

“Similarly, the pretence of ministers that a board whose members they appoint is free to act on its own is not the gravest imaginable failure in governance”.

Posted by Alex Wilks at 07:57 PM

U.S.'s NPR reports on Riza's trip to Iraq. U.S. liberals (using the political-U.S. sense of "liberals"), and some others too, wake up listening to "Morning Edition" on National Public Radio. With Kathy Schalch getting this piece on the air today, that means a lot of people are aware of the earlier Wolfowitz-Riza scandal, from his days at the Defense Department. (see this posting) The story also puts former WB president Jean-Louis Sarbib's literal voice out there, saying the arrangement was "not above-board."

Sarbib, who, contrary to the way he is identified here, is no longer at the Bank, but rather with former WB James Wolfensohn's investment firm, says the following: "'I thought she had done this on a volunteer basis on her own time. I did not know anything about a contract with that firm,' Sarbib, who is responsible for the Bank's Middle East and North Africa Region, said. "This was unusual and not terribly above board."

The assignment may have violated conflict of interest rules for World Bank employees. "If you take contractual obligations with somebody else [outside the World Bank], there's something called the Committee on Outside Interests that has to pass judgment as to whether or not this is a potential conflict of interest," Sarbib said. "And I am not aware that there was any such request."

Posted by Soren Ambrose at 05:39 PM

Another FMR World Bank Vice President joins global calls for Wolfowitz' resignation In a letter published today in the International Herald Tribune , Robert Picciotto, Former Vice President, Corporate Planning and Budgeting at the World Bank, joins Former Senior Vice President; Jean-Louis Sarbib earlier call yesterday for Wolfowitz's resignation

The Letter reads:

Out with Wolfowitz

Regarding the editorial "The time has come for Wolfowitz to go" (April 16): Paul Wolfowitz has exercised poor judgment in his stewardship of the World Bank.

His managerial record has been erratic and secretive. By feathering the nests of his cronies and his girlfriend, he has abused the trust of the bank's member countries that endorsed his appointment.

He can no longer command the respect or the moral authority needed to lead an institution dedicated to good governance and poverty reduction.

The articles of agreement of the World Bank give the president wide autonomy over personnel matters and operational policies. But with authority comes responsibility and the board of executive directors are the guardians of the institution's integrity and reputation.

They should act promptly to restore the bank's image. Better late than never. Paul Wolfowitz must go.

Posted by A Washington source at 03:50 PM

Wolfowitz Pack Your Bags! - Action today in front of WB Civil society organizations will protest in front of the World Bank today at 12pm to demand the immediate removal of World Bank President Paul Wolfowitz, and that steps be taken to democratize the institution.

A comment from a World Bank staff member is appended below.

For Immediate Release – April 18, 2007

Wolfowitz Pack Your Bags!
Advocacy Groups Demand the end of Wolfowitz’s
presidency and accountability at the World Bank

Contact: Medea Benjamin: (415) 235 6517
Sameer Dossani: (202) 340 0216

Civil society organizations will protest in front of the World Bank today at 12pm to demand the immediate removal of World Bank President Paul Wolfowitz, and that steps be taken to democratize the institution.

“Paul Wolfowitz’s only message for the last two years has been that the World Bank will not tolerate corruption,” said Sameer Dossani of the 50 Years Is Enough Network. “It’s time for him to put his rhetoric into practice. If the World Bank is to attempt to eradicate corruption, he must step down and there must be an end to the authoritarian policy of allowing the U.S. administration to choose the head of the World Bank.”

Other organizations will be calling attention to the policies that Wolfowitz advocated while he served as a senior advisor to the Bush administration. "Nepotism is not the most serious of Paul Wolfowitz's crimes," said Medea Benjamin of Code Pink, a leading anti-war organization. "He masterminded the illegal invasion and occupation of Iraq and is a leading representative of the Bush administration's failing diplomacy-through-militarism ideology. He must get out of the World Bank and be put on trial for war crimes, along with a host of others in the Bush administration."

Though Wolfowitz has come under increasing pressure to resign in recent days, he has found some support from an unlikely source: some African governments. Responding to these developments, Ruth Castel-Branco, a Mozambique-born activist and campaigner for the Mobilization for Global Justice said “Wolfowitz claims that there is to be no tolerance for corruption in Africa. If that is the case, how can we tolerate it inside the World Bank? We demand transparency, accountability and democracy for our governments and especially for these institutions.”

COMMENT from a World Bank staffer. 18 April, 17.00 EST
The event in the park
(1) was not organized by Bank staff and
(2) would have led to problems for anyone without a US passport were they arrested and
(3) would violate Bank guidance on participation in political activities. so there would not have been a lot of Bank staff there.

Posted by Sameer Dossani at 03:27 PM

'heckuva job' Wolfie. A blog maintained by the editors of Foreign Policy Magazine takes issue with Ruth Wedgwood of Johns Hopkins University's School of Advanced International Studies and a friend of Paul Wolfowitz, who wrote to defend Wolfowitz in Today's L.A Times.

After quoting from Dr. Wedgwood, Christine Y. Chen then goes on to pointedly ask "Riza could have ended her relationship with Wolfowitz to keep working at the World Bank. Or Wolfowitz could have chosen not to accept the World Bank job so he could spare Riza the interruption in her career. Why should the World Bank be responsible for compensating her? Do they compensate every employee who transfers out for a similar reason? Would Wolfowitz go to bat for other women and men under his employ who may have had to temporarily step out of their career path because their spouse worked in the same office, or they took time off to have a kid?"

Posted by A Washington source at 02:27 AM

First Former World Bank Vice President to say on the record "I think he should go". From CCTV -- Jean-Louis Sarbib, FMR. World Bank Sr. vice president, said, "I think it's extremely sad that the World Bank is in the news as a scandal institution at a time when poverty is a very big issue for the rest of the world and where the credibility of the institution and the credibility of its head is absolutely essential. So, I think he should go."

Posted by A Washington source at 01:08 AM

A well known US conservative paper joins increasing calls for Wolfowitz's resignation. The Washington Times, a consistently conservative paper that usually reflects the views of many republicans in the US capital, surprised many in Washington DC and the World Bank with its editorial this morning "Unacceptable impropriety"......

The editorial argues that "Wolfowitz defenders argue that his transgressions were unwitting, resulting from an effort to work in good faith and follow the direction of the ethics committee, and were subsequently misrepresented by a subjective presentation in the press"

It then goes on to say " This defense is based on documents released by the World Bank at Mr. Wolfowitz's insistence, but it overlooks several key aspects of the story. Mr. Wolfowitz did not intend to fully recuse himself from matters pertaining to Miss Riza. A letter from the bank's general counsel suggested Mr. Wolfowitz's willingness to do so, but an e-mail response to that letter from Mr. Wolfowitz's lawyer, reported in The Washington Post, clearly rejects it: the proposed resolution "WOULD NOT -- I REPEAT, NOT -- INVOLVE RECUSAL FROM PROFESSIONAL CONTACT" with Miss Riza."

The editorial then concludes that "..combating corruption in developing countries is central to the World Bank's function, and because he engaged in the kind of political favoritism his organization seeks to root out, Mr. Wolfowitz can't advance that goal, nor will he easily resurrect his reputation. His leadership has been rendered ineffective. The only honorable choice is to resign."

Posted by A Washington source at 12:48 AM

More on the Riza-in-Iraq episode. Reuters is now reporting on the subject, and includes a potentially promising reference: "Defense sources said the Pentagon was reviewing the matter." And the Government Accountability Project has released another raft of documents on the matter, including the original contract.

Posted by Soren Ambrose at 11:27 PM

Wolfowitz finds another paper to support him. Until now the Wall Street Journal was one of the few newspapers to editorialize in defense of Wolfowitz, a phenomenon attributed to its long-term, intimate ties with the man and the Bush Administration. Now the Chicago Tribune has joined in, touting a similar line of defense: people who love corruption and the idle habits of World Bank staff are out to tear down a man who dares to challenge the status quo by employing "a classic manufactured scandal."

The staggering exhibition of ignorance by the Tribune -- they even manage to refer to Riza, consistently, as "Raza" -- recalls the paper's "rock-ribbed Republican" stances of the 1970s (yes, I will admit it, I'm from Chicago). In recent years it seemed to have improved a bit. Maybe the current owners are getting their last licks in before they sell it to real estate investors.

Although it's hardly alone in making the error, somehow the Tribune manages to sound more sanctimonious (and ignorant, again) in maintaining that Wolfowitz introduced the idea of going after "the debilitating virus" of corruption at the World Bank. It was, of course, James Wolfensohn who did that, and he was hardly quiet about it (I think it was him who went beyond the Tribune and called it "the cancer of corruption," no?)

Posted by Soren Ambrose at 11:14 PM

WB Action Wednesday at Noon - Wolfowitz Pack Your Bags! Missed the opportunity to participate in last Saturday's action in front of the World Bank, calling for the dismissal of Iraq war architect Paul Wolfowitz? Feel up to another fun event, connecting US interests to the policies of the World Bank? Then read on...

Code Pink, the 50 Years Is Enough Network and other local organizers will be doing an action in front of the World Bank tomorrow at noon. Organized at the last minute, this action will take advantage of Wolfowitz's current scandal to call for his resignation, greater transparency, and reparations for damage done.

What: Join us for guerrilla theater, singing, in front of the World Bank Building.
Theme: "Wolfowitz Pack Your Bags!" We will be rolling around suitcases. Enlarged bagage tags will hold slogans.
When: Tomorrow, April 18 @ noon.
Where: Gather at Murrow Park opposite the Bank's Main Complex (18th and H)

PS. If you have a suitcase, please roll it along to the action!
For questions, feel free to contact Ruth Castel-Branco at 202 IMF BANK (463 2265).

Posted by Sameer Dossani at 08:26 PM

Jettison Cleveland, Daboub, to save your skin. Hard-hitting advice to Wolfowitz from respected foreign policy blogger Pundita. Get rid of key allies/appointees if you want to survive.

According to Pundita the World Bank president should:

"lobby for demoting Daboub or find a way to keep Daboub's paws off family planning issues at the World Bank".

"pack off Ms Cleveland to GOP headquarters".

A neat argument. But given his penchant for cronyist/political appointments he'd be worried about implying problems with these ones. And there'd be a danger he'd just find similar people to take their places.

And I'm not sure that the Staff Association, the media, the shareholders, the NGOs or others will accept such sacrifices. Surely it has to be the president who goes.

Posted by Alex Wilks at 07:35 PM

The Wolfowitz saga: a guide to all the angles. (Update: comments). Now that the media pack has turned on Wolfowitz, it’s open season. Much commentary – and the formal World Bank board process – are limited to the Shaha Riza pay deal. But we’ve now counted ten specific allegations on the World Bank president and some new conflict of interest claims that emerged today. Here is a guide summarizing the main angles with links to posts with more detail.

10 counts and you should be out.
Since we revived this blog last Thursday we have been scouring the internet, and receiving regular tips from people inside and around the World Bank. Most commentators have focused on Wolfowitz’s role in deciding the pay of his partner. One well-placed Bank staff member told me yesterday that this was just the “tip of the iceberg”. Many more allegations have come to light and more are emerging daily. The counts against Wolfowitz and the Wolfowitz Bank now amount to ten.

1) That Wolfowitz trampled Bank pay and staffing codes by awarding abnormal payrises to his romantic partner, Shaha Riza. To comply with ethics guidelines Riza had to leave the Bank once Wolfowitz took charge, but she was given pay rises to ‘compensate’ her for working at the State Department, and guaranteed automatic promotion for when she returns to the Bank. More details here and here.

2) That Wolfowitz was less than honest about his role in the pay affair, before admitting a mistake and saying he was sorry only last week. Details.

3) That the State Department-established job for which Shaha Riza is being paid more than Condoleeza Rice does not amount to much: the Foundation for the Future has yet to make a grant. Details.

4) That in less than two years of Wolfowitz’s tenure at the Bank over half of Bank senior managers have left – many either pressured by the president or unhappy with this style and direction. Details.

5) That senior management positions have been filled by appointees from governments who had supported the Bush administration in the run-up to the Iraq war. Details.

6) That Wolfowitz brought in two special advisers who had worked with the Bush administration, ensured they also were paid astronomical salaries and worked with a cabal of them and others rather than Bank staff or board members. Details.

7) That some of Wolfowitz’s senior management and/or senior staff appointees have been pushing a Republican Party line on family planning, including removing all mentions of reproductive health from certain Bank planning documents, including the Madagascar Country Assistance Strategy. Details.

8) That Wolfowitz has been continuing to promote the Bush administration's line on Iraq (see this) using his position at the Bank to accelerate the Bank’s re-engagement in Iraq, and has also brought his political views to bear when making other lending decisions). See Wolfowitz Watch commentary here and here.

9) That the World Bank’s internal machinery for dealing with ethics and internal corruption issues is not working properly and may have been populated with Wolfowitz cronies. Suzanne Rich Folsom, head of the Bank’s Institutional Integrity department may have been reluctant to investigate a Bank staff’s whistleblowing on the Riza issue because of her ties to Wolfowitz via her husband George Folsom, former president of the International Republican Institute. One of Suzanne Folsom’s hires in that department (supposed to probe corruption within the bank) was Allison Brigati, the daughter of former national chairman of the GOP, Frank Fahrenkopf. See the Village Voice expose.

10) Wolfowitz has repeatedly stressed tackling corruption as his key approach to development issues and the main reason he’s at the World Bank (see Wolfowitz's anti-corruption views and criticisms of them here and here. He has lost all credibility now that so many damaging revelations and allegations are circulating about him and can never be expected to be taken seriously when telling developing country governments about political or financial corruption.

10 is a nice round number but it seems that it may not stay that way. A breaking story is a further potential conflict of interest of the law firm which first represented Wolfowitz and is now representing the Bank in conducting an investigation. See Government Accountability Project for details.

Another one on which tantalising details - but not all - have emerged, is the question of on what basis Wolfowitz's partner Riza went to work in Iraq for a defence and intelligence contractor (see this story). Questions include whether Riza notified the Bank (which forbids its staff taking on politically sensitive assignments, and whether Wolfowitz might have had a hand in obtaining her the position (he was still at the Pentagon).

General issues
As well as these ten points the affair does raise some more general policy and political issues.

The deep problems with the World Bank’s top job selection process. At present the White House Chief of Staff draws up a shortlist which is presented to the US president who decides which American citizen should get the position and foists it on the Bank’s board. Not very impressive for an international organization with over 180 government members and a penchant for talking about good governance. See my comment piece of two years ago on this site.

Blowback for the Bush administration’s cavalier approach to multilateral institutions. Few have forgotten Wolfowitz’s presence in the administration when it was desperate to drum up votes in the UN Security Council before the Iraq War. Nor that many of the allegations and predictions on Iraq by Wolfowitz and others turned out not to be true. See this CNN story if you can't remember.

If any readers feel I’ve missed important angles, don’t hesitate to write. Contact@worldbankpresident.org [And for those correspondents fretting that the e-mail is not working: it is, we’re just snowed under].

Tomorrow morning I’ll post a round-up of the political intelligence we’re receiving with latest positions of different governments. If you have tips on that, you know where to send them.

Glad to see you're blogging on the World Bank again! Well, Alex, you didn't cover all the angles LOL:
Aboard the Black Pearl with Paul Wolfowitz



I hooked you up with a link here:

And there is also some interesting Inside the Beltway News/gossip in the same post you might like.



I don't think you've quite got the #2 and #3 stories in all of this. The #1 of course is resolving the potential conflict-of-interest-with-girlfriend problem by committing an egregious violation of conflict of interest.

#2 is Riza's work for SAIC. The problem is not that she was involved in politically sensitive work, but rather that - as all Bank employees know - we are not allowed to be compensated by anyone but the Bank for any work we do, including giving speeches. It appears that Wolfowitz probably set up that consulting job for Riza, although he was not yet at the Bank and probably did not know she would be committing a violation of Bank conflict of interest rules. (She surely knew.)

#3 is the Post's article by Karen DeYoung the other day, alleging Wolfowitz demanded when he came to the Bank that his contract exempt him from those Bank conflict of interest rules, so he could be compensated for speeches and books.

Why don't these guys understand conflict of interest? I don't know, but it goes back at least to the year 2000, when Wolfowitz's patron Dick Cheney headed up the vice-presdiential search committee and selected......Dick Cheney. They are clueless about this issue, but still think they can lecture developing countries about it.

Another World Bank staff member (name and address supplied).


Posted by Alex Wilks at 07:20 PM

From WB Staffer re: Staff Association chair Unanimous vote of confidence in Alison Cave. I'm told that this morning, the delegate assembly of the world bank staff association - the staff parliament if you will, which was called into an emergency session this morning by Alison Cave, the chair of the association, gave her a unanimous vote of confidence.

This delegates assembly basically includes all elected representatives from every department in the bank. These officers represent their respective staff in the staff association. This development strengthens Mrs. Cave's hands in pressing forward with her demands that Paul Wolfowitz do the honorable thing and resign as president of the world bank group. It also undermines attempts by his office, which is said to be spreading rumors that Alison is acting on her own and without the backing of staff.

Also, attempts by Wolfowit'z friends in the press to defend him by using innuendo that his critics are corrupt staff members who are against him because of his campaign against corruption inside the bank ( see Here and here ) are also backfiring. Staff are furious that he , or his aids, are allowing, or may even be organizing, this directly. This also recalls to mind previous attempts by members of the Bush administration to accuse those who are against the Iraq war of being "unpatriotic". True, you can take the man out of the Pentagon but not the Pentagon out of the man !

Posted by Sameer Dossani at 06:23 PM

Stiglitz weighs in. In a 'Financing for Development' side event in New York on the G8 and global governance, former World Bank chief economist (now professor of economics at Columbia University) Joe Stiglitz has weighed in to the Wolfowitz issue.

He told his audience that "if the head of the World Bank resigns, it would be a major mistake if the current system remains the same and the US once again appointed their candidate. This is a major opportunity for NGOs to change the governance structure of the institutions". Stiglitz went on to say that he was confident there were other more qualified candidates available who weren't "white, American and Republican".

Posted by Jeff Powell at 05:43 PM

US presidential candidates, UN Secretary General weigh in. Fellow bloggers have been speculating (here and here) whether and how the Wolfowitz drama might become a US political issue. Now a former and a potential presidential candidates have started commenting. Will others follow?

Pat Buchanan strikes some heavy blows in an article on Human Events ('leading the conservative movement since 1944'). Among them:
1.Tommy Franks once referred to the Pentagon's No. 3, Doug Feith, as "the dumbest guy on the planet." It now appears Gen. Franks' honorific better applies to Feith's boss, the Pentagon No. 2, Paul Wolfowitz. For a man once hailed as the brightest of the neocons, Wolfie has behaved with a stupidity born of the arrogance of power.

2. As this spilled out into the press, Wolfowitz, by week's end, was barely hanging on to his job. But Treasury Secretary Hank Paulson and the West Wing were behind him. In the GOP of Jack Abramoff and Duke Cunningham, this doesn't qualify as sleaze.

3.Well, let Wolfie stay on as poster boy of Bush ethics, and let the nation decide whether they wish to continue with this crowd in 2008.

Coming from a different perspective, Democrat 2008 hopeful Barrack Obama will say is going to say that the US "needs to renew alliances in international institutions such as the UN, NATO and the World Bank". Obama's speech to the Chicago Council on Global Affairs was due to be given today, but has been postponed until 23rd April due to the tragic shootings at Virginia Tech yesterday.

Meanwhile UN Secretary General Ban Ki-moon today called on officials from international financial institutions like the World Bank and International Monetary Fund (IMF) to engage in deep reforms to accommodate the interests of developing countries. He complained that developing countries are "poorly reflected in forums where crucial decisions about their economic and social future are taken, including some of the institutions created 60 years ago under vastly different circumstances."

"If these institutions are to strengthen their own legitimacy and credibility - and better serve the world's peoples - they must engage more deeply in reforms that reflect today's economic realities," he said.

Posted by Alex Wilks at 04:05 PM

The *first* Wolfowitz/Riza scandal. Well, who knows, maybe not the first. But at least prior to the one that's consuming so much attention now. The New York Times (and its sister paper International Herald Tribune) report on that niggling matter that Alex and one of our correspondents have been complaining hasn't received enough attention: how Riza, then a regular WB employee, ended up working on a non-WB contract in Iraq in April/May 2003 (shortly after the invasion) without the Bank's knowledge. Turns out the Pentagon -- where Wolfowitz was #2 at the time -- ordered its contractor to hire her.

The article includes an interview with Jean-Louis Sarbib, who was at the time the Bank's Vice President for the region that includes Iraq, and was Shaha Riza's direct supervisor. He admits he should have known about the arrangement, but was never told. And he says that there were a lot of questions about why Riza gave a presentation to the World Bank board when she came back from Iraq, offering a relatively optimistic view of the country's future.

"It was not clear why the Pentagon specifically asked for Riza to travel to Iraq. At the time, however, the World Bank did not have a relationship with Iraq. Normal bank rules do not allow the bank to provide economic assistance to an area under military occupation," report Steven Weisman and David Sanger. "Riza's trip raised concerns among some bank officials, who said they did not know under whose auspices she had traveled to Iraq at a time when it was against bank policy for its officials to go there."

Incidentally, the man in charge of the office that was said to have insisted on Riza's hire, Under Secretary for Defense in charge of policy, Douglas Feith (who has since left the Dept of Defense), is a particularly notorious character in the effort to justify the U.S. invasion of Iraq. One of the main figures in the Wolfowitz cabal at Defense, he was put in charge of creating a secret, wholly separate and new intelligence agency, to counter the inconvenient reports put out by what Cheney and Wolfowitz felt were the amateurs at the CIA and Defense Intelligence Agency.

Posted by Soren Ambrose at 03:20 PM

Don't make it a US domestic issue In an inciteful piece by Krishna Guha in today's FT, the read is that if the Wolfowitz issue is picked up by the Democrats then Bush will defend him to the death. Interesting is the assessment of where the Europeans are at.

Europe is too heavily invested in the Bank to allow Wolfowitz to stick out the remaining three years "without radical changes to his presidency". Guha suggests that Wolfowitz may sack his "intensely disliked aides" (Robin Cleveland and Kevin Kellems). The UK, Germany, the Netherlands (and to a lesser extent France) are pushing for such changes. Spain and Italy not yet on board the joint European push, leaving one wondering what's holding Zapatero and Prodi back?

Posted by Jeff Powell at 11:52 AM

Inside the Bank: a very tough week ahead (Update 1). Somone in the Bank has taken the trouble to give a run-down of how Wolfowitz, Vice Presidents and other 'hapless staff' are coping. The mood seems bleak, with concerns about many things, including about European government funding to the Bank. And now NGOs are now trying to see if Wolfowitz senior appointees have watered down the Bank's 'clean energy' policy, in the same way that they removed mentions of reproductive health in other Bank documents. Wolfowitz is ducking and diving, but pretending everything is fine.

The comment in full. The tone and content show that for many staff this is clearly going to be a very very tough week to get through. They, and we, hope this can't last much more than that.

Wolfowitz has called his Vice Presidents (rank to which his girlfriend would return if he got two terms, which is looking unlikely now) together Tuesday for "a pep talk". But it is unlikely that the Kumbaya songsheets will get much use, given the deteriorating mood in the place and the shock that he and his entourage have not yet quietly left. No hint on the time, but at least one VP is glad to be at an offsite. Talk inside today focused on IDA, and the eroding support of big donors, led by the UK, for the Bank's main poverty window.

Someone who met Robin Cleveland Monday said she was unfazed: "this is just a tsunami, and the wave has already struck and we've survived." Most are hoping she's wrong, particularly as Ana Palacio is now desperately wanting to explain how Williams & Connolly, where the partner who negotiated Wolfowitz's own sweet contract deal works, was picked to do the Board's investigation of the late January leaks to Fox News. (It took Ana two months to hire them, and she claims she looked at three firms: some speculate that OJ Simpson wasn't able to turn up anything for her.) She should tell the Board all the facts, hand over the emails, and produce the documents. (Seen hurrying from the building after lunch, she looked positively gray, much as she must have when her colleagues at the Spanish Parliament found out last year from the Washington Post that she was working as a consultant to Wolfowitz before he named her General Counsel after former General Counsel Roberto Danino jumped, or was pushed. This broke rules both in Spain and at the Bank, and the vindictive regime took its revenge on Bank Ethics Officer, Maria Borrero, for having pointed out the Bank's ban on hiring government officials as consultants under any circumstances. Suzanne Rich Folsom, head of Institutional Integrity, was told about that, too. Presumably she and fellow Wolfowitz counsellor, Robin Cleveland, agreed on Nixonian presidential immunity was sufficient for not having done anything with the situation.)

Wolfowitz skipped a scheduled "conversation with the President" at a large staff learning event on Monday morning, where he was to be interviewed by the BBC's Washington Correspondent. His absence left a big elephant in the room; however, PW boldly turned up at the coffee break and was seen standing chatting, cool as a cucumber, with three hapless staff. On-lookers edged toward the perimeter of the Bank's atrium, where last Thursday a handful of staff had cried "resign, resign" to the horror of the other 250, better-mannered on-lookers to the revelations about his girlfriend's salary and delusional "abandoned career" and the Staff Association's reasoned demand for his resignation. Yesterday, they were muttering among themselves and avoiding eye contact with him for fear he might come over to press the flesh. The shamelessness of this, as the iceberg continues to show itself, is staggering.

The Board is back from New York on Tuesday and will also have to take up the Daboub matter. His interference in the Bank's long-standing support for reproductive rights has a new dimension as environmental NGOs go looking for his fingerprints on the Bank's recent, watered-down "clean energy" paper. Photocopies of his marked-up copy are locked in file cabinets waiting for the right moment and now might be the time for someone to hide the shredders.


The same correspondent has sent further thoughts (17 April, midday EST).

Things are heating up. Many VPs aren't able to join Mr. Wolfowitz for his "pep talk" today, because there are still some delegations in town after the Spring Meetings. Previous commitments, etc., etc.

Wolfowitz has this morning apparently asked for an "internal communications plan". Surprising that Kevin Kellums, whose huge salary was a multiple of what he earned holding and licking the comb, hasn't come up with one already. The last straw was an email to all staff Tuesday morning from Wolfowitz, reporting on the Spring Meetings but omitting paragraph 16 of the communique, but the uproar has been limited as most just delete those emails without reading them, even before the latest tardy efforts to re-spin what we're all reading in the papers. Internal Communications says they did not send this and had no knowledge of its going out. So that ties Kevin and the new SVP, External, whose picture you can see on Google being received by PW at the Pentagon, to yet another blunder in this sorry mess.

Meanwhile, it turns out that there's more on the Bank's stand on climate change and global warming that whatever Juan-Jose Daboub may have recently had deleted from the most recent Board paper on "clean energy". Just after PW arrived, there were other climate-related papers that had to go to the Board, including one that Robin Cleveland heavily marked up to the point that the Bank's Chief Scientist, the respected Bob Watson, threatened to resign. He didn't, so some accommodation must have been found; however, Watson's boss, long-serving environment VP Ian Johnson, left. Hmmm, wasn't that around the time the science advisor to the White House pulled a similar number on a US government paper? While Wolfowitz no longer seems to be a global warming denier, is there a pattern here? Gonzales on HR tinkering, PW on "directing" employment perks for his girlfriend (NYT this morning, heavily photocopied and forwarded at the Bank), Cleveland (and the White House) editing stuff on global warming. Pattern of weak management, interference (by?) and cover-up does not appear limited to his girlfriend's promotion, raises and secondment to a ghost organization.

Keep your comments coming - contact@worldbankpresident.org.

Posted by Alex Wilks at 08:56 AM

The Role of Wolfowitz's Friends? The gravity of the situation is sinking deeper this morning among World Bank Staff, including those who supported Paul Wolfowitz. Bank corridors are now filled with discussions of how the longer this situation continues, the deeper it will drag the credibility and effectiveness of the Bank into a sinkhole. Many are asking , "can anyone talk some sense to him?".

The reality at this point is that Wolfowitz' position is untenable, he needs to take leadership and step down on his own to spare the institution he says he loves and his own anti-corruption agenda from becoming a laughingstock. The New York Times, summed up the feelings of most staff members now, pro and against Paul Wolfowitz: "There is no way Mr. Wolfowitz can recover his credibility and continue to be effective at the bank".

He certainly needs to do the honorable thing and resign NOW.

Posted by A Bank Insider at 05:58 PM

Media verdict clear: but what will the court say? The World Bank staffer who acted as whistleblower in January 2006 on the Riza payrises must feel sad but smug. He/she certainly pointed to an important issue that needed to be aired. And warned that if the Bank did not deal with this properly its president would face "trial by media". Very accurate, and this post summarises and links to some good recent pieces. In case you don't think me a totally impartial foreman of the media jury, I quote The Economist: "the verdict from most quarters is in; only the sentence is still uncertain".

The Bank staff whistleblower, who used the name John Smith, must feel bitter that the Bank's ethics committee was so cursory in its examination of the case last year. The Economist picks up on the angle that "the bank’s executive directors may show leniency, if only because they themselves have egg on their face. Their ethics committee should never have given Mr Wolfowitz the latitude he went on to abuse". Let's hope that the opposite psychology prevails and the board takes their second opportunity to fix this situation.

As for the media jury, here are my picks:
A New York Times editorial says "there is no way Mr. Wolfowitz can recover his credibility and continue to be effective at the bank".

The Daily Mail's headline is clear. "Dislikeable Wolfowitz must go, and go now". It continues: "never before has a Bank president lost the confidence of his staff so much that they dared to openly bay for his resignation".

The LA Times concludes: Wolfowitz should walk A World Bank president who grants favors to his girlfriend can't convincingly chide other leaders for corruption.

The Huffington Post makes a similar point. In short: "Already in a complicated position at the Bank, because of what he calls 'my previous job' -- he has guaranteed that no subsequent speech on his central topic, the evil of self-dealing, will ever be taken seriously by anyone he hopes to convince".

The Australian says. "As feared, he has used the bank to advance the Bush administration's policies. The World Bank is no place for an Iraq war architect".

The Brunei Times regrets that "With the focus on Wolfowitz, his girlfriend and her pay rise, yet another gathering of the most powerful decision-makers in the global economy passed without agreement on what the World Bank and the IMF are really for".

The Village Voice: "World Bank President Paul Wolfowitz spent the weekend desperately trying to keep his job, but e-mails flying around the bank's internal bulletin board show that he'll never quell the internal revolt". [Contains further lengthy extracts of WB staff views.]

Staff themselves have their say on Wolfowitzmustresign. A good headline: "Sweetheart deals not limited to sweethearts".

The Guardian newsblog argues that pressure continues to mount on Paul Wolfowitz, the president of the World Bank appointed by George Bush, over his role in approving pay increases and promotions for his girlfriend Shaha Riza, a bank employee.

Posted by Alex Wilks at 05:41 PM

A side battle in the US administration? It is clearly emerging that a parallel battle is going on between the US Treasury and the State Department on one side and the White House and Bush's elite on the fate of Wolfowitz at the head of World Bank. It always difficult for US politics to deal with World Bank issues, but which views exist on this in US Congress? Why Nancy Pelosi is not saying anything on this? Apart of Edwards, what other Presidential candidates think of the scandal? Do they believe that keeping Wolfowitz at the head of the Bank will help US international credibility? Too many scandals are going on in Washington at the moment, but also the World Bank one deserves a clear say.

Posted by Antonio Tricarico at 03:38 PM

Benn: It Simply Can't Continue. (Update 1). Hilary Benn, UK International Development Secretary, raised the pressure on Paul Wolfowitz on Saturday when he said 'the whole business... should not have happened.'

This morning in New York, responding to questions from a group of Perm Reps to the UN, he went a little further.

Benn repeated his call for the Board to be allowed time to work out what to do, but then came close to demanding a resignation.

"Let's be blunt," he said, "what's happened has been enormously damaging for the Bank, an institution that many people care about. It simply can't continue."

In fact it seems that Benn is even worried that his personal reputation might suffer if he's even pictured sitting next to Wolfowitz (see update below).

UPDATED 16 April 2007. 11.43 EST.
Now we've been told that a funny game of musical chairs took place on Saturday when Benn refused to be photographed alongside Wolfowitz. From a commentator in Washington who wants to remain anonymous:

"As a follow-up to your note about Hilary Benn, apparently at an event on water on Saturday, Benn refused to sit beside Wolfowitz, and the organizers tell me that they had to regroup the chairs so that there was absolutely no chance of their being photographed together.

But betting here is that PW will dig in and the Board does not have the balls to remove him. We'll see if that's true tomorrow, when Attorney General Gonzales faces the music on the Hill. The parallels between Wolfowitz and Gonzales are just too easy to not connect the dots: interference in HR matters, not being candid and truthful, documents come out, oops. Lotta 'splanin' to do..."

Posted by David Steven at 03:38 PM

Can Wolfowitz win the peace? This question is very premature while the board is considering whether to dismiss Wolfowitz. But how long will that take and, if he wins the battle to stay on as president, what then? A posting on the IHT blog reminded me that Wolfowitz wars tend to drag on longer than he predicts. And that he's not very good at winning the peace. The Tribune's Managing Globalization blog accuses the World Bank president of using the same (failing) strategy at the Bank that the US administration did with Ba'athist forces in Iraq.

Daniel Altman's neat argument: "Wolfowitz seems to have made the same mistake that the American-led coalition may have made when it took over the security forces in Iraq four years ago. As some veterans of those early days in Baghdad now say, the United States and its allies should have filtered unrepentant Ba’athist officers out of the forces, leaving the structure intact, rather than disbanding the forces entirely and filtering supposedly sympathetic officers back in. When Wolfowitz began his anti-corruption and reform drive at the World Bank, he began by trusting almost no one, creating a close-knit team of his own advisers that practically became a parallel executive. That move alienated his staff, and now they want him out".

A convincing point. The senior management departures and hirings under Wolfowitz (see previous posts '3 out of 5 Wolfowitz top appointments linked to Bush administration's Iraq strategy' and 'Broader allegations on pay deals for Wolfowitz's friends at the Bank') are in fact much more of a scandal than the Riza affair). The World Bank is, after all, supposed to be a multilateral institution operating in an even-handed, non-political manner.

Posted by Alex Wilks at 01:55 PM

Oh no. Someone has gone ahead and said the unsayable. In a comment for UK daily The Independent, columnist Bruce Anderson has called for Wolfowitz to be replaced with none other than UN-wrecker John Bolton.

Anderson, a self-proclaimed Wolfowitz backer when his name was first put forward in 2005, says Wolfowitz has lost the moral authority to lead in the fight against corruption: "A speech by Paul Wolfowitz on corruption. Imagine. Shuffling feet and downcast eyes while he was at the rostrum: as soon as he left the room, derisive laughter. He cannot stay on. Every African dictator will now be summoning his juju men to cast their spells to keep him in post, and impotence. His friends should work their magic to persuade him to depart with dignity."

Those who would like to see the institution truly go up in flames will surely cheer on his pick for Wolfowitz's replacement: "In the short run, there is an obvious candidate to succeed Mr Wolfowitz: another neo-con, the former UN Ambassador, John Bolton. No-one ever accused him of lacking grip. Nor is he overburdened with sentimentality. Confronted with obstruction or incompetence, he uses his temper as a bulldozer. Mr Bolton is the man the World Bank needs, and deserves."

Posted by Jeff Powell at 11:51 AM

Tony Blair for president? Chief economics correspondent for the Guardian, Larry Elliott, has - perhaps only half-jokingly - put Tony Blair forward as a candidate to run the Bank.

In an excellent piece capturing as much steak as sizzle over the content of this weekend's spring meetings in Washington, Elliott argues that the leadership selection process for the Bank and Fund must be fixed: "The Europeans should make it clear they would veto an unsuitable Bush nomination for the Bank, and to make things easier they should give up the right to nominate the next managing director of the IMF. That would give Bush the chance to nominate someone to the job who was non-American but who had a commitment to development and was liked by the White House. Tony Blair, perhaps?"

Word is he'll be looking for a job in a few weeks.

Posted by Jeff Powell at 11:37 AM

Here's an idea - why not evaluate his performance? Besides the farcical process by which Wolfowitz was anointed World Bank president, what this whole affair highlights is the absence of any systems at the Bank to evaluate the performance of its president.

European government officials have reportedly been running around trying to figure out what process there is to handle the incident. The simple answer - there is none. There are no transparent, objective systems in place at the Bank to evaluate the performance of its head (or its board for that matter).

A similar vacuum exists across the street at the Fund. The recent report of the high-level panel on IMF board accountability identified this gap as a key precursor to the effectiveness of any of the other governance reform proposals on the table at the IFIs.

And if a process had existed to evaluate the performance of the head of the Bank? We might have had an objective assessment of not only how Rizagate will affect Wolfowitz's ability to carry out his role but balanced against this would be an examination of whether he is cutting muster as a manager or a leader of the world's most important development institution. Instead we've been subjected to a sad weekend of political partisanship, where public statements in support of the embattled president were more about realpolitik than principle. Staff, member governments and the people the Bank is meant to serve deserve better.

Posted by Jeff Powell at 11:31 AM

Unprecedented rancor. U.S. newspapers are helping out with reading the diplomatic language employed in Sunday's Development Committee statement and press conference. Steven Weisman of the New York Times finds that "Bank and finance officials said they could not recall any time in the history of the bank when there was such an open and rancorous rift between its president and the people who are supposed to run the institution in cooperation with him."

Weisman interprets: "The rebuke of Mr. Wolfowitz came in the form of bureaucratic language in a series of sentences in the board’s communiqué that asserted 'the current situation is of great concern to all of us,' an unusually blunt statement for a circumspect institution. [...] Though the language was indirect, the message it sent was unmistakable, according to officials who have been meeting in Washington the last few days. 'Words like ‘concerned,’ ‘credibility’ and ‘reputation’ are pretty unprecedented for a communiqué from a place like the World Bank,' said an official involved in the drafting of the statement."

And if Wolfowitz is not so adept at hearing the intended message -- or refuses to acknowledge what he should see -- he may get some help from Europe. "European officials close to the bank said that if anything, Mr. Wolfowitz’s apparent dismissal of the criticism on Sunday would increase the determination of the wealthy European donor nations of the bank — especially Britain, France and Germany — that he needed to step aside for the good of the bank."

That effort may well involve Henry Paulson, U.S. Treasury Secretary, who is described as being at pains to look fair and neutral (even as he insisted the U.S. supports Wolfowitz in his first comments on Friday.) "Bank officials and others close to the executive board said they hoped that Mr. Paulson, who they said mostly listened to complaints about Mr. Wolfowitz over the past three days and counseled patience on his future, would play a crucial role in persuading him to step down. A senior European official in the meetings said this was possible because Mr. Paulson went along with a communiqué that criticized Mr. Wolfowitz."

Weisman also says that Wolfowitz's email to World Bank staff with links to a carefully-chosen selection of relevant documents (criticized by the WB staff association as misleading) has likely "backfired."

But the Washington Post says that the Staff Association's strategy itself may have backfired: "Sources close to the executive directors, speaking on the condition of anonymity while the matter remains undecided, said the board is reluctant to appear to cave to the staff and take the unprecedented step of firing a president."

But the Post, like the NYT, concludes that the consensus hope is that Wolfowitz will come to the right conclusion on his own: "But a majority believes it would be "best if he decided on his own" to resign, one source said."

Posted by Soren Ambrose at 10:48 AM

African civil society not amused. As the previous entry notes, stomachs are turning over the exploitation of African government officials by the Wolfowitz forces. The following statement was written last night by Njoki Njoroge Njehu, executive director of Daughters of Mumbi Global Resource Center in Nairobi, Kenya. It has been submitted to groups in Washington who will try to put out a press release later today. But any journalist reading this can get a scoop ...

“Don’t try to make Africa Wolfowitz's saving grace. The impact of the World Bank’s policy impositions of the last 20 years still devastates us every day. There are still kids out of school, hospitals without medicines, thousands of children dying before the age of five, and millions without safe water because of the Bank’s policies. Paul Wolfowitz has done nothing to change that; he is no true friend of Africa.

"African politicians do African peoples no favors by making excuses for corruption and for the corrupt. They claim Wolfowitz has been an ally in fighting corruption? Too bad they haven’t learned that fighting corruption means rejecting it in all its forms. Wolfowitz is a self-proclaimed slayer of corruption, he must be held to the highest standards. His corruption exposes him and the institution that he heads for their crass hypocrisy and complicity in the rot of corruption that pervades the global economic system. Corruption cannot be tolerated; Wolfowitz must resign.”

Ms. Njehu can take press calls on her mobile phone: +254-723-229-426.

Posted by Soren Ambrose at 10:14 AM

African governments "screwed to the mast" The trotting out of African finance ministers to make ostensibly spontaneous speeches in support of Wolfowitz is turning the stomachs of many observers. Africa, after all, is the region most vulnerable to the whims of the World Bank president ... it all seems rather unseemly. A correspondent (who apparently works at the Bank) summed up many of the concerns in a note to worldbankpresident.org:

Don't you think it's appalling that African governments were screwed to the mast on Saturday to support Paul Wolfowitz, as if he personally were their only hope? Rubbish. He deserves no special credit: any World Bank President would have to work on Africa and it's been long said that Africa--where the world's poor are--provides the World Bank's licence to operate.

Robert McNamara, after all, made his Nairobi speech in 1973 about the misery of Africa and what the world needed to do. Jim Wolfensohn was there all the time, too, and spoke with genuine empathy about the continent and its achievements and challenges.

By contrast, Wolfowitz's first trip to Africa was not when he was at SAIS, or when he was a diplomat, or when was at Defence, but only after he became World Bank President. His interest really got started with Chad-Cameroun, but let's not go there. It's obvious to anyone who thinks about this for an instant that that Mr. Wolfowitz wants to be Mr. Africa so he's no longer Mr. Iraq.

The Europeans aren't buying that: he can't run the Bank effectively and speak about corruption, cronyism and nepotism from the position he put himself in, and tried to hide. You have to walk the talk. Africans know that, and they should not have been so enthusiastic about him yesterday unless what some people say is true: they'd rather have Chinese money with no strings (and no employment for Africans, alas) than IDA funds, which may be just as well, because with Paul Wolfowitz heading the World Bank, there may be no IDA.

I'm imagine his people are saying "we've weathered worse before." That may be, but this time they are wrong. He has to go, and if he will not promptly resign, along with his cronies, he has to be fired.

Posted by Soren Ambrose at 10:08 AM

World Bank staff continue to insist that their president resigns. Dutch Development Minister (and former chair of the Parliamentarians Network on the World Bank) Bert Koenders told Reuters last night: "it has become clear ... that there is also a lack of trust at the moment in the leadership and in the management. A bank without a motivated staff cannot work on poverty eradication".

World Bank Staff Association chair Alison Cave made it abundantly clear in a new memo late yesterday (in full below) that the association is not satisfied with the results of this weekend. They insist Wolfowitz has not responded to the main charges and "must resign".


World Bank Group Staff Association

1818 H Street, N.W., Washington, D.C., 20433, U.S.A

Telephone (202) 473-9000, Fax (202) 522-2025, sassociation@worldbank.org

Statement of World Bank Group Staff Association Chair Alison Cave

April 15, 2007

“World Bank Group staff appreciate the concern shown by the Board of Governors in the Development Committee communiqué. We fully expect that the Board will continue to show the same careful deliberation in its decision on the next steps.”

“The Staff Association has not seen any indication of how Mr. Wolfowitz intends to address the concerns we expressed in our April 12 statement.”

“Mr. Wolfowitz has not addressed the issues at hand. He has apologized but he does not say how he would rectify the situation. Mr. Wolfowitz must act honourably and resign.”

The Development Committee emphasised yesterday the need for this issue not to jeopardise the Bank's work, but this seems inevitable if this affair is allowed to drag on.

Posted by Alex Wilks at 07:37 AM

Bring in the U.S. Congress? Now that it's clear the Wolfowitz debacle will not be resolved on the weekend, we can ponder what will happen during the working week.

Seems to me that concerned members of the U.S. Congress, who are rarely shy about investigating mismanagement at the World Bank, should be encouraged to consider hearings into the institution's personnel practices. Now that the Democrats are in charge of Congress, this may not be difficult.

And it would serve to underline the very real prospect that getting Congress to commit to funding IDA -- and it is Congress, not the President, which allocates U.S. budget dollars -- could be hopeless so long as Wolfowitz remains in the president's chair.

Posted by Soren Ambrose at 10:25 PM

WB Staff Association Detects Bias in WB web coverage The Financial Times reports that the World Bank staff association is pointing out that the presentation of excerpts from documents relating to the Wolfowitz/Riza scandal is misleading.

The documents, posted on the World Bank's main website, are presented in such a way that readers are led to think that Wolfowitz was given the option by the Board ethics committee to give Riza *both* a promotion and an "ad hoc" raise, when in fact the full context makes clear that these were presented as separate, exclusive options.

Posted by Soren Ambrose at 10:13 PM

Wolfowitz's press conference performance: some clues on the dynamics? I thought (via web streaming) that Wolfowitz looked quite unconfident in the press conference. He looked down frequently when responding to questions and seemed hesitant at times (before remembering he was just meant to parrot back the communique or duck the questions by talking about other issues*).

Many journalists asked good questions, though none tried to pin down when the board might finish its supposedly expeditious deliberations.

A couple of questions pushed him on whether he had the credibility to remain at the Bank, or if he wasn't harming both himself and the institution by remaining. Wolfowitz would not be drawn on that. So let me spell it out: the majority of questions concerned the Wolfowitz affair and not one question to the World Bank president was on the important issues the institution is supposed to tackle.

This means that the media at least have lost interest in Wolfowitz's views on the real agenda. And following the loss of confidence by several ministers, Bank staff, NGOs, think tank leaders, etc, it is clear that Wolfowitz is a liability not an asset for the Bank.

It was interesting that Wolfowitz seemed most caught of guard when a journalist asked whether he has had recent conversations with the White House or Secretary Paulson which might indicate a weakening of US government support. Wolfowitz started saying something then recalled his instructions and said he'd "stick to the words [of the communique]". Could that journalist have been onto something? Is there a reason Wolfowitz did not just deny further conversations/weakening of support? Or am I clutching at straws here?

*An analysis of many of the real issues raised and decided at the Spring Meetings - especially on aid quality and quantity, and on debt relief, will be on the Eurodad website within 48 hours. These issues are extremely important and are overshadowed by the Wolfowitz saga. But the only way to remove the shadow is to remove the man, it seems to me.

Posted by Alex Wilks at 10:02 PM

Wolfowitz expresses confidence he can continue Short wire agency reports are quoting Wolfowitz from the post-Development Committee press conference. The most explicit version I've seen is from Marketwatch, which quotes him as saying "I believe I can carry out" the mission of the World Bank. It looks like this will not be a 3-day skirmish, but a multi-day, or multi-week, battle. Fasten your seatbelts (hope that metaphor isn't too mixed).

Posted by Soren Ambrose at 09:57 PM

Broader allegations on pay deals for Wolfowitz's friends at the Bank. The Financial Times, which really has its claws out for Wolfowitz, comes up with further damaging points against Wolfowitz. They relate to very generous pay deals for Robin Cleveland and Kevin Kellems (for more on their appointments see my previous post).

The FT recounts:
"Two sources told the Financial Times that Xavier Coll, the Bank’s senior human resources officer, was not consulted over the terms and conditions offered to Robin Cleveland and Kevin Kellems, former Bush administration officials who Mr Wolfowitz brought with him to the Bank.

Ms Cleveland and Mr Kellems were given salaries of about $250,000 net of tax – the same amount paid to the highest ranked career Bank officials, who typically have 25 years of development experience

World Bank policy is that the president has the authority to make an appointment at any level, but it would be normal for the head of HR to be consulted over the terms of such appointments, two sources told the FT. It is understood that mid-ranking HR officials were consulted over the appointments.

The FT’s revelations are potentially damaging because they suggest that irregular processes over appointments under Mr Wolfowitz were not limited to his personal involvement Riza affair".

More for the Bank's board to consider, if it's serious about rescuing the Bank's internal governance.

Full FT story.

Posted by Alex Wilks at 09:30 PM

More details on government positions. The FT has just posted a piece giving worrying further details of the Development Committee talks today. It focusses in particular on where the Europeans stand.

"A senior European official told the Financial Times that unless the White House withdrew its support, European countries were not sufficiently united to succeed in an immediate attempt to force Mr Wolfowitz’s removal".

"A series of European ministers voiced sharp public criticism of Mr Wolfowitz over the weekend ... but Europe’s position was not united, according to the European official. Germany and the UK were leading the fight against Mr Wolfowitz with France and Spain more willing to sit on the sidelines, he said".

I'm going to check in with my colleagues in Eurodad network member organisations to dig for more detail on their governments' stances.

Posted by Alex Wilks at 09:26 PM

They fudged it! Development Committee chair Carstens just announced that the Committee is going to leave the decision to the board, as we predicted 20 minutes ago. His carefully-worded statement did refer to Bank staff concerns and risks to its credibility and to carrying out its mandate. He ended: "we expect the World Bank to adhere to high standards of governance".

The full quote from the Development Committee communique is "We have to ensure that the Bank can effectively carry out its mandate and maintain its credibility and reputation as well as the motivation of its staff. The current situation is of great concern to all of us. We endorse the Board's actions in looking into this matter and we asked it to complete its work. We expect the Bank to adhere to a high standard of internal governance".

Posted by Alex Wilks at 08:59 PM

Ministers can't leave the board to decide. A number of people I've spoken to today think the Development Committee will announce today that they will leave the Wolfowitz decision to the World Bank board. Trevor Manuel, former Development Committee chair, is among many who have said there should be no rush to judgement.

But the The Moscow Times nails this argument. "It would be absurd to leave the decision to the bank's executive directors. These mid-level bureaucrats are not going to reach such a decision on their own. In practice, national capitals will make the choice, unless Wolfowitz himself takes it out of their hands."

Long-standing readers of this blog will remember that in February/March 2005 George Bush went over the heads not only of executive directors, but of development and finance ministers by personally phoning prime ministers including Tony Blair and Silvio Berlusconi to get their support for the Wolfowitz nomination.

The ministers only gather on World Bank business twice a year. The officials they delegate to do day to day Bank business in Washington can't make this call. Ministers should not leave for home until they have sorted this out and announced their decision.

[15.40 EST]

Posted by Alex Wilks at 08:41 PM

Extra press conference today: WB Staff Association. The Staff Association has decided to hold its own news conference immediately after Wolfowitz's. They were not allowed to hold it in the Bank, so are doing so in a nearby shopping mall one block away. Full details below.

Alison Cave, Chair of the Staff Association, along with Moralina George, former chair of the association, will hold their conference at a small mall at 2000 Pennsylvania Ave. They will be inside the mall next to the Kinkead' Restaurant, This small mall falls outside of the security perimeter set up around the IMF and WB buildings.

Reporters can walk the distance between the IMF building where Wolfowitz will hold his press conference to Kinkead in less than 2 minutes. Its less than one block away.

If you have any questions or need more details, contact:
Read Scot Martin (cell) +1-202 -669-4932
Moralina George (cell) +1 301-661-2406.

Posted by Alex Wilks at 08:18 PM

The crucial press briefing: see it live on the web. If (like me in Brussels) you can't be at the Development Committee press briefing, why not watch it live on the web.

It is going to be streamed here. (Thanks to JT for the tip). Due to start 3.00PM EST (but running 15 minutes late as I write).

Posted by Alex Wilks at 08:14 PM

50% of Bank senior staff have left: how many more would stay?. This is not a tabloid encouragement that, if Wolfowitz wins, the last Bank staffer to resign should turn off the lights.* It's just a late (for me) recognition that Wolfowitz has not only been very clumsy in hiring people, but also in letting them go. Half of the Bank's senior management have left already in the 23 months since Wolfowitz joined. Can you imagine how many more would leave if he somehow finds a way to stay on?

Others, including Bloomberg, have been onto this for a while. They reported last December:
"Half of the bank's 29 highest-level executives have departed since Wolfowitz, the former U.S. deputy Defense secretary and an architect of President George W. Bush's invasion of Iraq, took office in June 2005. Among them is Christiaan Poortman, vice president for the Middle East and a 30-year World Bank veteran, who left in September after resisting pressure to speed up the pace of lending and adding staff in Iraq".

"Among those who left the bank after disagreements with Wolfowitz are Roberto Danino, general counsel and a former prime minister of Peru; Ian Goldin, vice president for external affairs; and Gobind Nankani, vice president for Africa. Of the 14 executives who left, three had reached mandatory retirement age, according to the staff association".

World Bank Staff Association Chair Alison Cave has previously expressed strong concerns about some of these departures from the Bank. She will be available to journalists this afternoon to give the perspectives of Bank staff. You can contact her on: (+1) 202 473-3952.

See also the very useful Wolfowitz Watch updates by the Bank Information Center, and articles from the Bretton Woods Update.

* Just before the 1992 general election in Britain, The Sun orchestrated a campaign against the Labour Party and its leader Neil Kinnock. On election day, its front page carried a photograph of Mr. Kinnock's head encased by a lightbulb. The headline read: "If Kinnock wins today will the last person to leave Britain please turn out the lights".

Posted by Alex Wilks at 07:21 PM

Development Committee meeting now: Europeans hardening their positions. The Development Committee of the World Bank is meeting over lunch to discuss the fate of wolfowitz. We are told by inside sources that the topic of Woflowitz is the number one topic on the lunch agenda. Europeans are said to be taking an ever tougher line.

The Development Committee is the ministerial body which meets twice yearly to discuss World Bank strategy. The Wolfowitz issue was not of course supposed to be on their plate this Spring.

European ministers seem to be hardening their position against him and now realizing that the only to salvage the Bank's integrity and reputation is by asking him to resign... privately at first, but publicly if need be.

The DevCom will be discussing what to say in their final communique on this issue. Let's hope they don't fudge it, and have also had some time to discuss the other issues they were supposed to.

The Development Committee communique will be released in less than three hours (at 3.00PM Washington time) at a press conference with Development Committee Chairman Agustín Carstens, World Bank President Paul Wolfowitz, and IMF Managing Director Rodrigo de Rato. I'm certain it will be a lively affair.

Posted by Alex Wilks at 06:19 PM

Who we are - Sameer Dossani Sameer Dossani is Director of 50 Years Is Enough: U.S. Network for Global Economic Justice in Washington, DC. He has been part of grassroots campaigns on global justice issues since 1994. Sameer has degrees in Philosophy, Religious Studies and Women's Studies and has studied in Canada and Australia. Prior to working with the 50 Years Is Enough Network, he was the director of the NGO Forum on the Asian Development Bank.

Posted by Sameer Dossani at 05:50 PM

Yesterday's demonstration Yesterday's demonstration which was scheduled to talk about justice and the theft of Congo's wealth ended up merging those issues with calls for Wolfowitz's resignation.

Yesterday's demonstration which was scheduled to talk about justice and the theft of Congo's wealth ended up merging those issues with calls for Wolfowitz's resignation. For some time, we thought that the World Bank staff association would actually march with us, as they had called for a demonstration at exactly the same time as ours. As it turns out, the Staff Association itself distanced itself from the protest but there were definitely members of the staff association present. They did not want it known, though. When asked where they were coming from, they sort of squirmed and looked uncomfortable. If any of you are reading this, please don't be shy and feel free to come out to future events :-).

The WB staff association folks also had nicely printed out signs saying "resign!" and "Board act now: Fire Wolfowitz". In addition to the fantastic Congolese singing, some of the favourite chants were "Wolfowitz/World Bank, get out of the Congo" and "Down with corruption, down with Wolfowitz". dc.indymedia.org should have audio of the event in a few hours (it's not been posted as yet).

Posted by Sameer Dossani at 02:30 PM

Civil Society points to double standards Of course civil society groups critical of the World Bank have not been silent. The release below highlights the question of the double standard: if a high-ranking African government official had behaved the way Wolfowitz has done, what would the Bank have said?

April, 13 2007

Contact: Sameer Dossani (202) 340 0216
Lidy Nacpil (281) 236 9474

As Wolfowitz Feels Pressure to Resign,
Critics Call for Accountability, Transparency and Democratization of
the IFI's

Institutions' Edges Fraying as Finance Ministers Gather
for Semi-Annual Meetings April 14-15

The annual spring meetings of the World Bank and the International
Monetary Fund (IMF) are scheduled to take place in Washington, DC on
April 14-15. These meetings are overshadowed by allegations that the
World Bank president, Paul Wolfowitz, ensured that his longtime
partner Shah Riza was given a promotion and pay rise prior to her
leaving the World Bank to work at the U.S. State Department. Riza
currently earns close to $200,000 per year, more than the head of the
State Department, Condaleeza Rice.

"The alleged nepotism here shows the double standard when it comes to
corruption," said Sameer Dossani of the 50 Years Is Enough Network.
"Wolfowitz, like his neoconservative allies in the White House and
elsewhere, has advanced his agenda by promoting his allies and
friends. If this were taking place in an African government, we would
hear the usual lines about corruption standing in the way of
development. Where is the accountability here? If the World Bank is
serious about good governance it will have to first give itself a
dose of its own medicine: fire Wolfowitz, end the dubious practice of
letting the U.S. administration of the day appoint the World Bank
president, and take measures to ensure meaningful transparency,
accountability and democracy within the institutions themselves."

Critics have linked this debacle to the ongoing crisis of relevance
within the World Bank and the IMF. In Europe, some countries are
starting to break from following the institutions' lead on the
question of economic conditions. "In response to our campaigns, the
government of Norway has announced that it will not tie its aid to
economic conditions," said John Jones of Networkers South-North
"While there is still a long way to go, actions like those of Norway
and the UK are a logical outcome of reports that have been coming
from the Bank for years. These reports state that the policies have
been a failure for poverty reduction and economic growth. It is time
to allow space for countries to determine their own destinies."

Well known Philippine activist and International Coordinator of
Jubilee South, Lidy Nacpil went one step further. "It is true that
the conditions don't make sense, but it is also true that these
policies have been the cause of untold suffering in the Global South.
There must be some accountability, some form of reparations,
especially for the most egregious of the IMF's and World Bank's sins.
Millions of the most oppressed and impoverished people have been made
to pay for their suffering twice. First, through the vital support
these institutions gave to keep dictatorships in power such as Marcos
in my own country, Mobutu in Zaire/Congo, Somoza in Nicaragua and,
the apartheid regime in South Africa, and second, through debts that
have prevented governments from providing basic social services for


Posted by Soren Ambrose at 02:23 PM

Pick of the World Bank president editorials. Many papers have had editiorials today or yesterday on the Wolfowitz issue. Here are a few. No time to wrap them up in detail, but have listed some key ones below (without repeating ones already linked elsewhere in this blog - i.e. the FT, WSJ, etc).

Jamaica Gleaner. The Wolfowitz scandal is compared to scandals involving third world kleptocrats.

Investors' Business Daily. Biggest US financial newspaper after WSJ and FT weighs in, says wolfowitz is corrupt and must go.

International Herald Tribune. He should resign because he made clean governance his main cause at the bank, and he has fallen far short of his own standards.

Le Monde. Calls for Wolfowitz resignation - Le départ de Wolfowitz.

The Moscow Times. "Should Paul Wolfowitz leave the World Bank? The answer to that question is yes. Will Wolfowitz leave? The answer to that question is murkier. It would be absurd to leave the decision to the bank's executive directors. These mid-level bureaucrats are not going to reach such a decision on their own".

Village Voice. "The very idea that Paul Wolfowitz had the 'moral authority' in the first place to take over the World Bank is preposterous.

The BBC says "Mr Wolfowitz is hanging on, but his position is looking very weak, with the White House the only player coming out squarely in his favour".

The Star-Ledger. "The World Bank should be a model of the values it promotes. If the bank's president is an advocate for clean governance, he should be able to meet those standards himself. Wolfowitz fell far short of his own exacting ideals".

I'm sure there are many many more editorials. Thanks to those who've sent in these tips: please anyone tell me major ones I've missed and I'll add them later.

Posted by Alex Wilks at 02:15 PM

Wolfowitz issues memo 'to fill vacuum'. (Update 3) The World Bank president's office released late yesterday, aiming to highlight the sections most favourable to Wolfowitz. Quick as a flash World Bank staff have responded with a rebuttal.

3 updates below (comments from readers, FT analysis and Staff Association memo).

Wolfowitz circulated the favourable document extracts (available here) to all Bank staff at 7.26PM Washington time yesterday with a cover note: "Out of respect for the Board review process that has been underway, I have said little. I feel, however, that this has left a vacuum which has been largely filled by misleading information. The recently released documents, together, are quite lengthy; it's a lot to wade through looking for significant facts so I'd like to call your attention to a number of them".

Many Bank staff have already been perusing the documents very carefully. Within minutes of the president's memo the Bank's intranet was full of comments. Among them: "The latest note from the President and his little cover-up documents is too pathetic! Who advises him? Does he truly believe Bank staff are that simpl ... The latest note from the President and his little cover-up documents is too pathetic! Who advises him? Does he truly believe Bank staff are that simple? Besides, why didn't he submit all these documents to the Board? And there's nothing new in them...". I hear there's a more formal memo from Bank staff, too, which I'm trying to obtain**.

The Financial Times - the first to get some of the key memos in this affair - has also published it's own dismissal of the Wolfowitz extracts. It's major point: "the ethics committee talked about an ad hoc pay rise as an alternative to a promotion, not as an additional benefit". I.e. Riza should not have had both.

I think Wolfowitz may be getting a bit paranoid (though with some provocation). I don't see any vacuum that he needed to fill. There is plenty of commentary in all directions, and some of it clearly based on briefings by Wolfowitz or his people.

2 examples:

Fox News had a piece yesterday with spookily similar argumentation based on the 100 pages of internal bank documents. Their key point? That "the bank’s own ethics committee had known the terms of the settlement with Riza for at least a year". And, "while Wolfowitz did indeed dictate the lucrative terms of Riza’s salary to the bank’s human resources chief, he also took steps to try and determine if what he was doing was right – seemingly trying to navigate his way through an arcane bureaucracy with a maze of unusual rules and procedures". (Note this piece by Richard Behar follows a series of recent pieces by him for Fox News based on leaks from the World Bank board, or perhaps from the President's office).

The WSJ's on-line Opinion Journal has a piece arguing that Wolfowitz is being attacked by the "hide-bound bureaucracy". They say that they made a "private prediction" of this when he was appointed. This is bizarre: what's the point of working on WSJ print and on-line editorials if you keep your predictions to yourself?

www.worldbankpresident.org is working hard to prevent any vacuums in coverage of this important issue. Write to us at contact@worldbankpresident.org if you have insights or reactions to share.

UPDATE 1. Sunday 13.00 EST
A 'a World Bank retiree' writes in (thanks) to add his own punchy rebuttal.

"In his email of April 14, Wolfowitz draws our attention to his 'significant facts.' The 'significant facts' he omits are:

1) The Board was willing to accept his recusal but had to back down because apparently after subsequent advice from his attorney he had a change of heart and refused to recuse himself on "professional relationship" with his girlfriend. So his offer of recusal was a farce (and the Board saw it as such).
2) Contrary to his assertion that he was only looking after the interests of the Bank, the documents make it abundantly clear that he was only interested in safeguarding Riza's interests. It was he who devised the package (with Ms. Riza's help?) rather than HR.
3) Contrary to what he says, he was actively involved in devising the package for Riza, overruling the considerably less generous (and more reasonable) package proposed by HR. He cleverly directs Coll to give Riza an option between the two packages. One has to be stupid to elect to choose the vastly inferior package.
4) He was clearly both negotiating for Riza and turning around and acting like the 'decider'.

If this is not corruption, I don't know what is."

UPDATE 2. Sunday 13.20 EST.
Another correspondent, who wants to remain anonymous, has contributed the following cogent addition on both the link between Wolfowitz, Fox and the WSJ, and the rationale for the Riza pay increases.

"In your blog you speculated about Wolfowitz dictating some of the exculpatory editorials and Fox News documents. I firmly think that that's the case. Wolf has long had a cozy relationship with the Journal's editorial board, since at least 1998 during the Asian crisis when he had plenty of opinions. I recall they printed his early attack-iraq articles, too, before anyone else was talking about it. He's nothing if not a suckup. Not only has the journal given him two favorable editorials - the second one seemed to attack the IBD editorial focusing on his ethics, using its phraseology like 'pad her pay' in its rebuttal. They also gave Wolfo a soapbox late last week, probably thursday for his anticorruption program, that was exactly when he was trying to change the subject on his ethics. Nobody else did and nobody cares, because it's not newsworthy, but Paul needed some help with spin control so they obliged. The first WSJ editorial was clearly dictated by him, the journal did no actual reporting on the matter like the FT did and could not have known all those inside details they cited.

There is one interesting point to make about the two times the WSJ defended Riza - they kept saying she went over to the state department to a substantial job. Number one, it wasn't more substantial than Condi Rice's, that is for sure. But if it was so substantial, then why was it 'punishment' to her career that required an extra $60,000 compensation plus promised high-level no-competition promotions once Wolfowitz left? If it was such a terrible career-killer to be in the presence of the Bush inner circle on Iraq, why was she LITERALLY in bed with Paul Wolfowitz? She only got into this situation based on her own personal choices. If her career was that important, she could have recused herself from Wolfowitz, her domestic partner. But she seemed to think that she should be free to interact with her lover at the workplace with no one allowed to point to the obvious conflict of interest! What other employee gets to dictate the terms of her employment and if anything doesn't go according to her wishes, can say she's had her career ruined and her human rights violated? Riza seemed to think her job was her property and any assignment she didn't like was theft from her. She wanted to have it both ways, Paul and work and Paul at home. Plus the hefty salary increase. I think she's worse than he is. She sounds like she's got him blackmailed".

Thanks for this. Keep them coming. contact@worldbankpresident.org is the e-dress.

UPDATE 3. 15th April 15.45 EST.
Staff Association memo on this.

"Staff Association Update

April 15, 2007

President's Message to Staff of April 14th

Yesterday, Mr. Wolfowitz put out a message to staff drawing their attention to certain sections of the documents released by the Board on Friday, relating to their investigation of the terms of the external assignment in question. These same sections were made available to journalists covering the Spring Meetings in a web document entitled, " For the record - Direct quotes contained in documents released by the Board of Executive Directors, April 12. "

We recommend that staff consider all of the information made available by the Board of Directors and not just select passages. The highlighted sections, taken alone, do not present a full picture of the case and are, indeed, misleading. We could provide several examples of this, but leave staff to do their own due diligence and come to their own conclusions.

Alison Cave
Chair, Staff Association"

Posted by Alex Wilks at 01:18 PM

Combined take home pay: $654,410 (Update 2). I have not seen it elsewhere so have calculated the combined earnings of Paul Wolfowitz and his partner Shaha Riza. The answer: $654,510 (€484,125; £330,092).

Meanwhile the Washington Post has details of Wolfowitz's tough contract negotiation for his post as president.

I'm not one of those who insist that everyone working on poverty issues must get poverty wages. But there are limits, and many people - including me - think that this particular couple are really beyond them. Did Riza really need to bid up her salary to that level? Does the World Bank president really need to be paid that much? I don't think so.

A Washington Post story today has some juicy details of Paul Wolfowitz's contract negotiations when he joined the Bank. Wolfowitz got personal lawyer, Robert Barnett to push for "more than a dozen amendments to the standard contract that had served the institution for decades". The Post summarises "These included special dispensation for the books he would write and the paid speeches he planned to deliver, and a salary on par with that of the managing director of the International Monetary Fund, who was traditionally more highly paid".

BREAK-DOWN (all in US $).
World Bank president salary: 391,440
World Bank president 'supplemental allowance': 70,070
Shaha Riza salary: 193,000.

The salaries of Bank staff are tax free, like those of employees of many international organisations*.

World Bank salary figures are here.

The Riza figures are all over the internet and in the documents released by the Bank's board late on Thursday.

* My co-blogger Soren adds that the tax arrangements are more complicated than they seem, at least for US citizens working at the Bank (i.e. Wolfowitz, not Riza).
"Actually US citizens working at the WB do pay tax. But just to be fair to them, their salaries are raised by a commensurate amount so that they end up taking home what they would have taken home if they had been citizens of another country. Don't know which figure is quoted for Wolfo salary. But of course since it's the one position that is de facto reserved for a US citizen, maybe it should be exempt from that special arrangement."

Posted by Alex Wilks at 01:17 PM

African government views: being pushed by Wolfowitz? The New York Times has a very interesting piece analysing why some African governments may be publicly supporting the beleaguered World Bank president. It cites "several bank officials, asking not to be identified in order to avoid reprisals, charged that Mr. Wolfowitz was seeking backing from Africa as a kind of political base to counter the growing resentment among European leaders over his policies, particularly his anticorruption campaign".

The article cites Liberian and Mauritian ministers coming out with positive remarks about Paul Wolfowitz's management of the Bank.

I don't know these ministers, nor their views, but we should remember that endebted countries such as Liberia and Mauritius depend on the World Bank for a substantial amount of their annual cash flow so are not in a position to challenge the powers that be as much as they might like. (A Eurodad piece on Liberia's debt situation explains).

The World Bank's chief spin doctor, former Jordanian Foreign Minister Marwan al-Muasher (see our post from yesterday) may be behind these moves, according to a related story on Inter-Press Service. This also covers well a number of other elements of Wolfowitz's allies' attempts to regroup.

The attempt to cajole African countries to support the US government position has strong echoes of the attempts in early 2003 to get developing country Security Council members to give UN authorisation for the invasion of Iraq. Wolfowitz's team (some of whom have since transferred to the Bank) were unsuccessful then, will it be the same now?

Posted by Alex Wilks at 09:38 AM

Hot blogging on the World Bank president. Our blog has been the subject of a Reuters piece, and the Guardian's news blog has kindly also linked into us in their top story. Some World Bank staff have also set up their own blog. Fellow bloggers will be outraged at its stories of censorship and editing of postings to a weblog established by Bank staff on Thursday (though placing the blog on the Bank's intranet may not have been wise).

Other blogs are digging further into what Shaha Riza is actually doing with that high World Bank salary (Huffington Post, Daily Kos, while 'Evil Queen' has an acid headline: 'Foundation for the Enrichment of Neocon Girlfriends').

More blog round-up to come here soon, when I get time. You can of course help yourself using Google or Technorati.

We're very happy for more people to link into us to get the breaking news on this issue. And happy to link back.

Posted by Alex Wilks at 09:27 AM

Help wanted! Read the timely and humorous job description for a new World Bank President that's been circulating today...

Posted by The BIC blogger at 06:07 AM

An Overlooked Angle in Wolfowitz Scandal? Isn't it odd that there are no questions being asked about a "secondment" arrangement in which international public funds are used to pay the exorbitant salary of a U.S. State Department staffer (and most recently director of a U.S. State Dept. front group) whose mission is to improve the U.S.'s image in the Muslim world?

I've seen nothing about a balancing of the secondment -- e.g., the State Dept. sends four of its staff to the Bank to balance out Shaha Riza's salary. And a five-year secondment must be rather unusually long.

But the key issue should be: why should international taxpayers be supporting efforts to popularize U.S. policy in the Middle East? Are we all really so cynical about the Bank's supposed status as a U.S. puppet that we don't even blink at such an arrangement?

The idea of a "non-political" World Bank was always a fantasy, but this seems to be pushing it a bit far.

Posted by Soren Ambrose at 11:28 PM

Funding for the Bank: rumours fly. The LA Times has a piece which claims that European governments are making tough threats. It mentions "a leaked report that European governments had decided to cut off contributions to the bank's loan funds if Wolfowitz did not resign".

This is certainly intriguing. A number of Europeans were already likely to be much harder than usual on the Bank's replenishment discussions, which started in Paris on 7 March. After this damaging scandal you can imagine it would be that much harder for European ministers to justify putting ever more taxpayers' aid money through the Bank.

Meanwhile a friend in Washington has picked up a counter-rumour. That the US government is threatening to withhold its funding for the Bank during the replenishment if the Europeans don't calm down about Wolfowitz. When he came in as Bank president Wolfowitz pledged to help cajole Congress and the Administration to provide more money for the Bank. He'll undoubtedly be trying to restate that case now.

In the LA Times piece a former Treasury Department official said "I believe we could block an effort to remove Wolfowitz. That said, if there were an overwhelming mood against him, he would cease trying to stay".

The mood is hard to judge right now, especially with rumours of deals being cut behind the scenes. Tomorrow is a big day though, with the Development Committee and press conference.

Posted by Alex Wilks at 10:42 PM

1st Republican breaks ranks on World Bank issue. (Update 1) Now, Wolfowitz faces influential Republicans coming out against him.

'As a Republican, I do not think we should have to carry the burden of Wolfowitz in 2008. It is time to start cleaning up all of the ethical barnacles of the past several years. Wolfowitz' ‘modified limited hang-out' does not cut it with me and it will cut against Republicans in 2008. He ruined Iraq and now he is ruining the World bank. Enough is enough."

The words of Andy Martin, writing on Contrarian Commentary.

He writes that "Wolfowitz has run the institution much like a Chicago ward boss or mayor, employing patronage and intimidation to manage the institution. The result has been another round of professional failure for Mr. W. Now Wolfowitz risks becoming a continuing embarrassment to President Bush, the Republican Party and, of course, to himself. It is time for Wolfowitz to go".

According to his site "Chicago-based Internet journalist, broadcaster and media critic. Martin covers regional, national and world politics with forty years of personal experience". People writing into this blog assure me that Martin's word is highly regarded in Republican circles. Let's certainly hope so (on this issue at least, I've not had a chance to see his other opinions).

Update 1. 15 April, 13.30 EST.

Martin has penned another savage piece. Extracts:
"Mr. Wolfowitz’ 'war on corruption' at the Bank has proven to be a one-way street, Wolfowitz Way. Corruption only exists where he wants to see it. Billions have disappeared in countries where Wolfowitz perceives a vital American interest".
"Wolfowitz is caught in a similar downward spiral to that of Attorney General Alberto Gonzales. Both men sought to minimize “personnel matters” at their agencies. Both men were less than candid with their initial disclosures, and both men are now suffering from the blowback".
"During the Clinton years Republicans claimed a low tolerance for self-dealing and dissembling. Those standards should also apply to Republicans caught in flagrante delicto. High standards of public morality benefit Republicans."

Posted by Alex Wilks at 09:41 PM

More conflicts of interest: Riza 'worked in Iraq without Bank permission'. One of our energetic correspondents in Washington is tearing their hair out wondering why nobody is reporting on a very interesting angle opened by GAP International. It's a saga about Riza working for a defense and intelligence contractor in Iraq without World Bank permission (and while in its employ).

The GAP press release from 6 April sets out the story:
"According to an article published in Vanity Fair in March, Riza was a “subject matter expert” for the Middle East during the Iraq War run-up at Science Applications International Corporation (SAIC), a firm focused on defense capabilities and intelligence gathering. At that time, Paul Wolfowitz was the Deputy Secretary of Defense.

Inside sources at the Bank have verified to GAP that Riza never applied for nor received permission to provide these consultant services to SAIC. This is a gross violation of World Bank staff rules, which require Bank employees to clear extracurricular professional activities with the Outside Interests Committee in order to prevent conflicts of interest. Such undisclosed parallel employment, GAP sources say, would never have been tolerated by the Bank and are grounds for dismissal".

“Considering that Riza was reportedly romantically involved with Wolfowitz at the time, that the Iraq War was imminent, that SAIC was a defense contractor, and that the World Bank had active projects in Iraq, multiple conflicts of interest probably existed,” said GAP International Program Director Bea Edwards.

I couldn't agree more.

Posted by Alex Wilks at 07:05 PM

Biting comments from German and French ministers. The tone is slightly different but the direction of the comments from the German and French ministers is the same: Wolfowitz is harming the Bank's credibility and should go. Other Europeans are also clarifying their positions.

Reuters quotes German development minister Heidemarie Wieczorek-Zeul saying "For me the most important thing is that the moral authority and the financial stability of the World Bank must not be harmed". She does not spell out that this means Wolfowitz must go, but says diplomatically that "He himself has to decide whether he still has the credibility to represent the position of the World Bank".

Yesterday French Finance Minister Thierry Breton said the World Bank is "an institution whose governance and ethics must obviously be impeccable. I fully trust the governing board to draw the consequences it must draw and I have no further comment."

Colleagues in DC say that the Nordic governments are clearly against Wolfowitz now and the Brits, too (though with some questions over whether the Blair-Bush 'special relationship' might trump everyone else's views in the end). The Italians are perhaps still in the mood for some compromise or other, while other European governments are playing cards close to their chests.

Meanwhile the Brazilian finance minister Guido Mantega was very lukewarm: "we'll have to see if Wolfowitz will be able to retain the moral authority necessary to fulfil his duties".

Posted by Alex Wilks at 06:37 PM

Wolfowitz's alienating style Three quotes from a long round-up piece in the American Chronicle. It reports that Wolfowitz's style has alienated many. Extra material from Maureen Dowd in the New York Times.

"'Mortally' wounded with little credibility and lost moral stature Wolfowitz like rest of the world awaits his own exit".

"Reportedly, Wolfowitz has failed to garner support for his future and reportedly the number of those distancing themselves from him is growing by the hours".

"Wolfowitz’s working style has more to do with his likely departure than the scandal itself. Unlike Kofi Anan who despite all efforts survived the corruption allegations involving his son because UN as whole backed him. In case of Wolfowitz that is missing. His over reliance on inner circle of two aides and ignoring of bank’s policies are equally responsible for his current condition".

Maureen Down in the New York Times has some extremely acid comments in her Saturday opinion piece.

"He has yet to admit any real mistakes with the hellish war that claimed five more American soldiers ... but he admitted on Thursday that he’d made a mistake when he got his sweetheart, Shaha Ali Riza, an Arab feminist who shares his passion for democratizing the Middle East, a raise to $193,590 — more than the taxpaying (and taxing) Condi Rice makes".

"Wolfie also alienated the bank by bringing two highhanded aides with him from Bushworld, aides who had helped him with Iraq. One was the abrasive Robin Cleveland, called Wolfie’s Rottweiler. The other was Kevin Kellems, known as Keeper of the Comb after his star turn in “Fahrenheit 9/11,” where he handed his boss a comb so Wolfie could slick it with spittle for TV. (Maybe his girlfriend didn’t get enough of a raise.)"


Posted by Alex Wilks at 06:14 PM

UPDATED. 3 out of 5 Wolfowitz top appointments linked to Bush administration's Iraq strategy. Emad Mekay and Jim Lobe of Inter-Press Service, who've tracked the Bank for a while now, have dug deeper on Wolfowitz's appointments record. They write that of the top five outside international appointments made by World Bank president Paul Wolfowitz "three were senior political appointees of right-wing governments that provided strong backing for U.S. policy in Iraq". A commentator has just written to worldbankpresident.org adding to the list of similar appointments.

The latest appointment was last month when former Jordanian Deputy Prime Minister Marwan Muasher was named senior vice president for external affairs. In that post he must be a very busy man. In 2002 Muasher served as King Abdullah of Jordan's ambassador in Washington in the run-up to the Iraq war and reportedly played a key role in ensuring Amman's co-operation in the March 2003 invasion.

The other appointments explored by Mekay and Lobe in their piece are those of former Spanish foreign minister Ana Palacio (as the Bank's senior vice president and general counsel) and former Salvadoran Finance Minister Juan Jose Daboub (as one of the Bank's two managing directors).

Many people may feel that these types of political appointments are potentially more serious abuses of power than the Riza affair that is at the centre of the current controversy.

For Wolfowitz's appointments of Kevin Kellems and Robin Cleveland, see my previous post.

UPDATE, Saturday 13.45 EST
Someone has written in from Washington (thanks) to tell me: "Actually Mekay and Lobe missed a few... Wolfowitz appointed the Senior VP for Finance, Vincenzo La Via - an Italian. In addition, even those who were selected from within the Bank to senior positions, such as the new VP for Middle East North Africa, who is also Italian, all have this common denominator. In short, all senior Bank positions have been going to people from countries who were either members of the Coalition of the Willing, or strong supporters (as in the case of Jordan)".

And a separate writer has pointed to the appointment of Suzanne Folsom, who was named Director of the Department of Institutional Integrity by World Bank President Paul Wolfowitz on January 17. She is the wife of George Folsom, President of the International Republican Institute, Ms. Folsom's main responsibility as head of the World Bank's anti-corruption unit will be the investigation of allegations of fraud and corruption associated with World Bank projects. See more.

Posted by Alex Wilks at 03:12 PM

Who we are - Jeff Powell Jeff Powell is a researcher and activist on development issues. As coordinator of the London-based NGO, the Bretton Woods Project, he focuses on the policies and programmes of the World Bank and IMF. Jeff has studied political science and business administration in his native Canada and development studies in the Netherlands. He has worked extensively with community economic development in Southeast Asia and Latin America.

Posted by Jeff Powell at 02:00 PM

Lack of trust all round: more Bank staff views. François Bourguignon, the World Bank's chief economist, told the FT that the future "efficiency and efficacy of the bank may be damaged, may be hurt, by what is going on today. We have to hope for a quick resolution." Other Bank staff, who's comments on the Bank's bulletin board have been passed to me, are harsher. In the words of one: "At this point, it's not about the technalities. It's not about which rule was broken, according to which memo. It's about a profound distrust in you, your advisers, your policies... Our clients do not trust you, our partners do not trust you, staff does not trust you".

Here are two entries, kindly supplied to worldbankpresident.org by a Bank staffmember who wishes to remain anonymous. As, incidentally, did the original posters of the below comments on the Bank's intranet system.

Posted By Anonymous Fri, Apr 13, 2007, 21:17
I whole heartedly agree with poster 21:10. Please resign to spare this organization and yourself from humiliation . I know that the board will unlikely have the collective courage and wisdom to ask you to leave, but self respect and dignity demands of you to step down on your own. As Alison said yesterday please do the honorable thing and resign.

Posted By Anonymous Fri, Apr 13, 2007, 21:10
Mr. Wolfowitz. At this point, it's not about the technalities. It's not about which rule was broken, according to which memo. It's about a profound distrust in you, your advisers, your policies. As Nancy Birdsall puts it, we need a strong world bank now and you are a distraction. You leaving will certainly not solve all of the problems faced by the institution but judging from the commitment, passion and will to change things expressed in these comments over the past few days, I have no doubt that staff is ready to do things differently and better. Our clients do not trust you, our partners do not trust you, staff does not trust you. The only one who as expressed support is GW bush and we all know his shortcomings. So my plea is: dont be like that. Dont hang on to the last bit of power until you are kicked out, by the board or by the staff. Act with dignity. You must leave now. If you dont, you will be booed at townhall, people will mock your opeds, clients will turn to others, and not only will you not be effective, you will contribute to bringing this institution further down the lines of irrelevance and obscurity. Leave now.

Thanks to my correspondent for this inside info: please keep it coming.

Posted by Alex Wilks at 01:26 PM | TrackBack

As examplar of US anti-multilateralism, Wolfowitz has few friends to call on David Sanger of the New York Times does a good job of providing some of the essential context underlying the quiet battle going on behind closed doors this weekend over Wolfowitz’s future. It’s about Bush and his sabotage of multilateralism, a complaint European officials, and many others, had long before the perverse idea of moving Wolfowitz to the World Bank occurred to anyone.

“At its core,” writes Sanger, “the fight about whether Mr. Wolfowitz should stay on at the bank is a debate about Mr. Bush and his tumultuous relationship with the rest of the world, particularly the bank, the United Nations and the International Atomic Energy Agency.” Bush’s contempt for world opinion was evident not only in his choice of Wolfowitz, but in his insistence on making John Bolton, one of the world’s leading bashers of the UN, the U.S.’s ambassador to the UN, and in his vindictive attempt to force Nobel Peace Prize winner Mohammed El-Baradei out of his job leading the IAEA after he declared there were no “weapons of mass destruction” to be found in Iraq (the Bush administration’s main argument for invading Iraq in the first place).

Sanger reports that Wolfowitz’s management style was widely seen as a microcosm of the Bush White House’s (“Members of the bank’s board from around the world began comparing what they called the murky way in which the bank made some policy decisions to the secretive habits of the Bush administration”).

He also notes that many have commented on the Bush-esque hypocrisy that infects Wolfowitz’s charge against corruption at the World Bank: “In foreign capitals, and among the bank’s staff members, it has been noted that Mr. Wolfowitz’s passion for fighting corruption, which he has said saps economic life from the world’s poorest nations, seemed to evaporate when it came to reviewing lending to Iraq, Pakistan and Afghanistan, three countries that the United States considers strategically vital.”

Sanger concludes by noting that the White House defenses of Wolfowitz have lacked “vigor” – true enough, given that Bush has left it to his standard spokespeople, while the Treasury Department officials, Secretary Henry Paulson and Deputy Tim Adams, have emphasized that the process (with the board) should take its course. He quotes one of the delegates to the spring meetings: “`There is a sense that we’re finally at a moment when Bush needs the world more than the world needs Bush,’ said a senior foreign official who flew into Washington recently for the annual meeting of the bank and the International Monetary Fund. ‘And there’s more than a little of that mixed in this whole argument over Wolfowitz’s fate.’”

Finally, it might be worth commenting on the competition between the different media outlets in covering this story. The New York Times has offered intensive coverage, going well beyond the Washington Post which has been quite lackluster. This is a reversal of the usual situation, given that the NYT, since the departure of Joseph Kahn in 2000, usually makes the international financial institutions an afterthought in carving up its beat assignments, while the Post always has reporters monitoring the situation on 19th Street. Not surprisingly, the UK papers – the Financial Times, The Times, and the Guardian, which presumably have a full compliment of reporters in Washington for the spring meetings, are also very much on top of the story. David Sanger, who used to write about international economics regularly, is also going some distance to recuperating himself after his long stint as a White House correspondent, when he was one of those referred to, justifiably, as court stenographers during the Iraq invasion and its aftermath.

Posted by Soren Ambrose at 01:23 PM

Chickens coming home to roost in the Bank’s boardroom Richard Adams writes in the Guardian that the hesitation by the World Bank’s board in pushing Wolfowitz over the edge might well be rooted in their guilty consciences. Several European board members, and some others, did, after all stage “a brief flutter of mutiny” when Bush nominated the man to be their president.

“Yet they eventually waved through the appointment with barely a flicker,” writes Adams, “being more concerned with protecting the cosy agreement that allows Europe to pick the head of the International Monetary Fund, while the US gets its choice in the World Bank.”

Adams says “the sound haunting the bank's executive board and their government masters is that of chickens coming home to roost.” Now, he says, they are “suffering the consequences: a lame duck president in the World Bank, appointed by a lame duck president in the White House.” This analysis, however, ignores the plausible argument some have made that some of those board members may relish the prospect of a weakened Bank president – meaning they will have more latitude to determine policy themselves.

Posted by Soren Ambrose at 01:09 PM

Paulson & Manuel keep their distance The New York Times’s Steven Weisman notes how toxic Wolfowitz has become, with his known friends publicly keeping their distance. Both Henry Paulson, U.S. Treasury Secretary, who insists the U.S. supports Wolfowitz, and Trevor Manuel, South African Finance Minister, have declined to explicitly say they think he will keep his job, referring only to the board process that Wolfowitz himself has said will decide his fate.

Pressed for further comment, Paulson would only say, “I said what I said.” In addition, “Mr. Manuel is close to Mr. Wolfowitz, and the failure to praise him was significant,” writes Weisman.

(That the former rabble-rouser Manuel could be considered a friend of the architect of the Iraq war is sad testament to the hollowness of the ANC government in South Africa, and seems in keeping with Manuel’s well-deserved reputation as one of the most insupportably arrogant figures in international finance, who takes special delight in running down his erstwhile allies.)

Weisman also quotes “one [Bush] administration official” in saying what would seem to most observers to be the bleeding obvious: “He could decide that his relationship with the staff and the board is so soured that he doesn’t have the trust he needs to go forward.” But the same source said he doesn’t think the White House is considering advocating for that.

Posted by Soren Ambrose at 01:01 PM

You can take the man from the Defense Department, but you can't take the Defense Department from the man. Fascinating extra elements are added by Steven C. Clemons in his Washington Note blog. Clemons extends the jobs and corruption allegations against Wolfowitz, and adds intriguing evidence that Wolfowitz has continued to ride his Iraq hobby-horse (surely war horse) while in his new role as Bank president. Clemons provides a very interesting story showing that "Wolfowitz -- as recently as one year ago -- was still manically obsessed with the connection between Saddam Hussein and al Qaeda".

The post is well-worth reading in full.

The current saga is all about Wolfowitz's partner Riza. But Clemons reminds his readers about the two other Wolfowitz postings that raised similar concerns.

1) "Wolfowitz also ran afoul of senior bank staff in the past by elevating inappropriately Bush administration political appointee Kevin Kellems, who used to be Vice President Cheney's spokesman, in ways that violated the merit-based rules that had been adopted at the World Bank".

2) "Wolfowitz also hired Mitch McConnell national security aide Robin Cleveland to help spearhead an internal anti-corruption campaign at the Bank when there was speculation about her own role in trying to trade favorable treatment in the Boeing Air Tanker matter in exchange for potential employment opportunities for her brother. Cleveland resigned the Senate and escaped further scrutiny for her involvement in the Boeing scandal, but her Wolfowitz-assigned task bore some irony then -- and is even more ironic now". More on these stories in a previous Clemons post. See also the Bank Information Center's Wolfowitz Watch page, in particular this piece.

But his real bombshell (pardon the metaphor) is on Iraq.

"Wolfowitz and Kevin Kellems had dinner at the Aquarelle Restaurant at the Watergate Hotel last year with a very prominent member of Washington's journalistic community. The journalist in question had not met Wolfowitz previously and Kellems played a 'relationship-brokering' role. What is interesting about this particular meeting -- as far as I understand the details of it -- is that the journalist in question, who I cannot name but can attest for his solid reputation as a serious writer, assumed that the topic of discussion at dinner would be Wolfowitz's global economic development agenda, his view of how to make the World Bank relevant to 21st century security and economic challenges, and so on.

Instead, Wolfowitz -- as recently as one year ago -- was still manically obsessed with the connection between Saddam Hussein and al Qaeda. Wolfowitz reportedly brought with him to dinner an enormous binder of materials, articles, essays, reports, intelligence, etc. -- arguing that the connection between Hussein and bin Laden's operation was real and robust".

Amazing for someone who pledged formally in 2005 to leave his previous geopolitics at the door of the World Bank. And again very dumb judgement to do such a thing. It's ironic that throughout this week Wolfowitz has been saying it would have been better to trust his instinct on the Riza affair, not his considered judgement which has led to the current mess. It seems to me that both instinct and judgement are very suspect.

Clemons also has a useful list of World Bank e-mail addresses people may want to use to express their views.

Posted by Alex Wilks at 09:16 AM

Leading thinktank joins in Now the head of the leading US think tank on development issue has added its voice to the calls for Wolfowitz to step down. Nancy Birdsall (bio), who was a senior researcher in the World Bank and now heads the Center for Global Development wrote on her blog "In 2005 as Paul Wolfowitz began his presidency of the World Bank, I and others set out an agenda for him --- to rescue the World Bank from slow decline into irrelevane and obscurity ... One of those five tasks was reform of the governance of the World Bank itself -- to be more representative and thus more legitimate".

She continues: "By resigning now, Mr. Wolfowitz can rescue for himself a lasting legacy. He can do so by linking his own resignation to a clarion call for a transparent and openly competitive process in the selection of his successor, in which it is merit not politics and power that matter".

This story is also picked up by the FT's Krishna Guha, who concludes: "The comments from Ms Birdsall will not be ignored by Mr Wolfowitz, who respects Ms Birdsall and has regular contact with her. They demonstrate how hard it will be at a personal level for Mr Wolfowitz to continue in his role, in which he would have to deal with many people who have now publically called for his resignation".

Posted by Alex Wilks at 09:01 AM

Sympathy for the ... As those of us outside Washington (I write from Nairobi ...) anxiously await news of whether the rumored 6 pm "resignation" press conference has happened, the beleagured president is finally getting some sympathetic treatment in the press. Gabriel Rozenberg of the Times Online writes that after reviewing the 100+ pages of documents released by the Bank today, "his woes stem far more from confusion and error on the bank President’s part than from any corrupt motive." His citations of different memos from the Bank's Ethics Committee do suggest some bureaucratic obfuscations. But do they add up to the basis for acquittal?

Fox News, perhaps unsurprisingly, also rallies to Wolfowitz's defense. It argues, based on extracts from the 100 pages of official documents released late Thursday, that "while Wolfowitz did indeed dictate the lucrative terms of Riza’s salary to the bank’s human resources chief, he also took steps to try and determine if what he was doing was right – seemingly trying to navigate his way through an arcane bureaucracy with a maze of unusual rules and procedures" and cast doubt on the role played by the Bank's Ethics Committee.

If you want to see the above arguments taken apart, by a journalist who's also read the 100 pages of documents, take a look at another Krishna Guha piece in the FT. He finds "there is no ambiguity as to who has decided which terms to offer Ms Riza".

Posted by Soren Ambrose at 12:37 AM | TrackBack

Economist gives thumbs down, but hints at leniency "That Mr Wolfowitz should have been involved in setting the terms [of Riza's pay], especially when they seem so generous, is astonishing", The Economist writes. It's analysis of the current politics is interesting.

"But a World Bank president, appointed by the White House with the acquiescence of the big European shareholders, is not an easy figure to replace. And the directors may show leniency, if only because they themselves may feel a few pangs of self-reproach."

"As soon as Mr Wolfowitz told them about his relationship with Ms Riza, they should have removed the matter from his hands and settled it by some other means. Instead, they advised him to post her outside the bank and give her a promotion. That advice, it now seems, gave Mr Wolfowitz far more discretion than he knew how to use".

Always hot on figures, the newspaper says: "much more than one man’s reputation is at stake. There’s a real danger that a $60,000 pay hike could jeopardise the bank’s efforts to raise $24.5 billion this year for its aid efforts in 2008-2011". For some strong NGO views on the Bank's fund-raising drive, see also the World Bank campaign Europe website.

One government already coming out publicly to be lenient is Canada's. In the last few minutes a piece appeared on 570 News indicating that "Finance Minister Jim Flaherty says in Washington he's satisfied that World Bank president Paul Wolfowitz followed the right process in arranging a job for his girlfriend. Flaherty says there has been 'selective leaks' of documents that have coloured the situation". Has he not heard about the 100 pages of documents released by the Bank board last night (after initial US objections were overruled). If you like the full picture, see the documents here and here.

Posted by Alex Wilks at 10:33 PM | TrackBack

Innovative protest planned outside the Bank tomorrow. (Update 2). A friendly person inside the Bank has just let me know that there's to be another historical first for the world bank staff: a joint protest with activists outside their own institution!

The message reads "World Bank Staff and NGOs will demonstrate tomorrow - calling on Wolfowitz to resign - at 3:00 PM in front of the bank's headquarters in Washington DC" (not 11:00 AM as some have rumoured). Permits have been obtained. Now all that is needed are some placards and chants. Happy to post readers' suggestions here tomorrow morning. Send to contact@worldbankpresident.org with 'demonstration ideas' in subject line.

We'll get some photos and other insights on this up tomorrow, too, once the protest has happenned.

UPDATE 1. 14 April, 10.00 EST.

WB staff association has cancelled this protest. Either due to pressure applied, or something else. Not clear.

UPDATE 2. 15 April, 13.30 EST.

The World Bank Staff Association have sent their memo clarifying that they never planned an official protest. Read it in full below. Note that the idea of an official SA protest is not ruled out. Just not 'at this time'.

"Staff Association Update

April 13, 2007

Dear Colleagues,

There is a false rumor that the Staff Association is organizing a demonstration tomorrow (Saturday) at 3:00 p.m. We would like to clarify that the Staff Association is NOT organizing a protest at this time.

We have called upon the President and the Board to safeguard the integrity and effectiveness of this
institution. The Board has issued the conclusions of its investigation and we ask that staff give them time and space to consider the implications.

The Staff Association will keep staff informed as events unfold.

Alison Cave
Chair, Staff Association

Posted by Alex Wilks at 10:26 PM

Thunderous comments Venerable British daily The Times, known as The Thunderer, opined today in an editorial that "to safeguard the credibility of the reforms for which he fought, Mr Wolfowitz must hold himself to those same standards."

But it's been heavily out-thundered by Joseph A. Palermo, on the Huffington Post.

Palermo's summarises Wolfowitz's errors, then concludes: "Wolfowitz is ruthless and corrupt, and he has disgraced the military, the World Bank, and his alma mater, Cornell University, where his father was a math professor. Wolfowitz represents everything that is wrong with the Bush Era: people who screw-up are promoted because of their ideological purity rather than their abilities; there is no accountability for lies and misguided policies.

Bush thinks he's a king, and Cheney is running the country like a CEO from Enron. Wolfowitz has been one of their key players ever since his days as Cheney's assistant when he was Defense Secretary under Bush I, and his time with the Project for a New American Century. It is time for Wolfowitz to be relieved of his post at the World Bank before he can do even more damage".

Less thunderous, but more melodic: New Pairodimes signs off saying that this episode reminds him/her of a song: Lovers in a Dangerous Time (and adds in a YouTube video of that song for good measure).

Posted by Alex Wilks at 10:07 PM

Speculation on the next WB President No, I don't have any special knowledge about if or when the resignation is coming. But Alex has given me a platform, so I thought I'd be the first to start speculation about the successor to Wolfowitz, and how it will be done. Never too early to start having some fun.

Civil society organizations have been emphasizing what they were saying back when Wolfowitz was appointed: if it wasn’t obvious that the process for choosing the World Bank president was anachronistic and corrupt, the fruits of that process this time around should suffice to convince just about anyone.

The existing process at least has the merit of simplicity: the president of the United States chooses whoever he likes. It’s not written down anywhere, so it’s not official – it’s just a convention that the Bank’s board has been willing to observe since the founding of the institution.

I want to suggest one possible scenario, which I think would be the smartest move for the U.S. administration now. That’s no reason to think they’ll actually do it, but they have in the past shown willingness to be both radical and opportunistic when it comes to the World Bank and international finance. Development is not a core issue for Bush or his constituency, so it is most useful as a field for symbolic gestures. (Or, in the case of Wolfowitz, a handy place to shift a valued friend who was becoming a liability.)

Even if they don’t care much about the Bank, there would certainly be some indignity in being the administration that gave up the historical prerogative of choosing the World Bank president. If next week they end up with a disgraced former close adviser to the president, (Wolfowitz), and a clamoring for a new process for choosing his successor, they will have a tough time in prevailing when they offer up the next old, white, male, Republican American to take over the Bank. It will be a public relations problem when what they could really use right now is a public relations coup, especially in something to do with international affairs.

If they’re smart, they’ll cut the loss – give up on putting one of their own into the president’s seat, this time around, but preserve the prerogative for choosing the person who sits there. They could get enormous credit for choosing a non-American, and someone from the Global South at that, to head the World Bank. It would be unprecedented, and it would shut up those troublesome critics (well, no, it wouldn’t, or shouldn’t, but it might at least distract the reporters and columnists).

So, if they’re smart, they’ll immediately start cultivating their nominee, and cultivating support from some of the nominee’s constituencies. The most obvious candidate, in my estimation, would be Ngozi Okonjo-Iweala, the former finance minister of Nigeria. She is a former high-ranking World Bank official, she got tremendous publicity for her anti-corruption drive in Nigeria, as well as her budgets and work on debt reduction, and she’s, well, an African woman. She managed to get out of the Obasanjo government in Nigeria before being tarred by its recent machinations to determine the outcome of next week’s election. She’s feisty, she’s neo-liberal, and she’s conveniently in Washington, taking refuge at the Brookings Institution while pondering her next move. She would be an immediate media darling, and Bush would get a nice bump from appearing at a podium with her as he nominates the next World Bank president, all without even mentioning the travails of his old friend “Wolfie.” They could try to get African ambassadors and others on board early, in an effort to discourage calls for a better process.

Needless to say, I hope, the imperative for civil society in any scenario like this would be to object loudly and insist on a democratic and open process. We should not allow ourselves to be drawn into the “Albright syndrome,” where some of our allies were blind to the policies advocated by Madeline Albright, when President Clinton made her the first woman to serve as Secretary of State. No one who is allowed to become president of the World Bank is going to be our ally, unless Dennis Kucinich is elected president of the United States (does Obama have a strong position on these issues?). For those who monitor, critique, and advocate, a transparent and democratic process is more promising than the status quo. We’re still far away from actual accountability, but depriving the White House of this imperial mandate would be a start.

Posted by Soren Ambrose at 09:53 PM

More US voices call for Wolfowitz to go The White House statement in favour of Wolfowitz is described by the FT as "more nuanced" than it suggests. And it cites US voices calling for the Bank president to go. Ken Rogoff, former IMF chief economist, told the FT: “President Wolfowitz’s credibility is so badly compromised that the board is ... going to have to force him to resign.”

One the FT missed is Democratic presidential candidate and former senator John Edwards.

The Hill quotes him saying “Wolfowitz’s tenure at the World Bank has been marked by some of the [same] failures as his term managing the war in Iraq — cronyism and rhetoric that does not match reality — and now serious questions of financial integrity that have alarmed our allies,” Edwards said.

Unfortunately Edwards did not lay out his views on whether the US government would waive its right to appoint the World Bank president next time.

Wolfowitz has apparently been avoiding reporters today, according to Bloomberg. We're still assuming he's coming out to say something in about one hour's time though.

Posted by Alex Wilks at 09:45 PM

A quick petition: please sign The excellent new campaign site Avaaz has a Wolfowitz petition. Short and sweet: just 3 words long. No, not "I love you" (that's what's got W into trouble). But "Sack Paul Wolfowitz."

See it and sign it here. And suggest others to do so.

Posted by Alex Wilks at 09:24 PM

White House weighs in on Wolfowitz's side The White House has recently backed their man in the World Bank.

"The president has full confidence in Paul Wolfowitz," White House spokeswoman Dana Perino told a news briefing. "We expect him to remain as World Bank president." Reuters was first with the story.

Didn't the White House also support Rumsfeld for a long time, until his position became untenable. Will Wolfowitz follow his former boss more quickly? Quite possible given how weak is the administration these days.

Posted by Alex Wilks at 08:07 PM

Results-focussed aid? Not on W's watch In the World Bank a lot of store is supposedly set by 'managing for results'. Sounds techie, but it's meant to mean that aid money is allocated where it will be most useful. As if the fuss about the World Bank paying Wolfowitz's partner Riza more than Condoleeza Rice was not bad enough, it now emerges she has hardly achieved anything in her job. Following a brief stint at the State Department she's been supposed to be setting up an organisation called Foundation for the Future. But the Wall Street Journal's Washington Wire blog reported just now that the organisation "remains very much a shell".

The WSJ continues that it has no permanent headquarters and has yet to issue any grants. Its Web site lists no phone number or address.

How long has she had to get results? Since September 2005. The WSJ has dug out a State Department letter from Sept. 16, 2005 (PDF) which said that Riza would be made “senior adviser in charge of establishing” the new foundation, helping pick its board of directors and supervising its launch.

Wolfowitz knows very well that the Middle East is a difficult region to get things done. But giving exorbitant payrises to someone who has yet to do more than hold a board and committee meeting, launch a logo competition and discuss a possible conference (all according to the WSJ's sleuths) is hard for anyone to comprehend.

Posted by Alex Wilks at 08:02 PM

Tide turning fast against Wolfowitz A Eurodad network member in Washington has heard rapidly building rumours that Wolfowitz is poised to make a resignation announcement at 6PM Washington time. In the Spring Meetings press room anticipation is growing keenly.

We are trying to get a read on the positions of different governments (hard because some officials may not be speaking for the government as a whole). But many seem to be hardening their lines. And the statement by government representatives at the Bank put out very late last night US time (after press deadlines) seems to demolish Wolfowitz's flimsy defence. (Though be warned it's written in officialese).

It finds that "the Ethics Committee, including its Chairman, had not been involved in the discussions with the concerned staff member. Neither did it find that the terms and conditions of the agreement had been commented on, reviewed or approved by the Ethics Committee, its Chairman or the Board. The Executive Directors will move expeditiously to reach a conclusion on possible actions to take. In their consideration of the matter the Executive Directors will focus on all relevant governance implications for the Bank".

It all sounds very bad for Wolfowitz now. I don't know if he's superstitious, but Friday 13th looks like being his last day in charge at the Bank.

This angle is also picked up on Air America Radio. Meanwhile readers may want to post comments on the BBC. On the BBC World Service website you can also give your views right now on the World Have Your Say programme. A quick skim shows 100% of the many posters there are urging Wolfowitz to step down or be fired. Sri Ram Aiyer, for example accuses the World Bank president of "abuse of authority in the extreme to show egregious favoritism to his partner, and two cronies from the Pentaton(K.Kellems and R.Cleveland) given Vice President salaries". Or how about this from Haider Meghjee? "An anti corruption drive cannot be led by a corrupt person.he was morally corrupt to begin with (Iraq war). He should have never been given this role. I hope bush does not nominate Rummy or Cheney for this position once wolfie is gone".

This blog will be on hand to chart the process for finding a successor if and when Wolfowitz falls on his sword. This really might be the moment when the US government sees sense and accepts reform of the Bank's anachronistic governance arrangements.

Posted by Alex Wilks at 06:26 PM

Another Cheney angle A lot of the commentary has been about cronyism, one example of corruption (defined by the World Bank as abuse of public power for private gain). It's been well-known for ages that Wolfowitz was a Cheney protege. But I had not realised until this New York Times piece that Riza (the woman W with whom Wolfowitz is 'romantically linked') was working for Elizabeth Cheney, daugher of Vice President Dick Cheney, when she first transferred to the State Department.

Posted by Alex Wilks at 04:20 PM

Calls grow for Wolfowitz to go Many more people are gradually joining calls for Wolfowitz to resign. Dr. Frithjof Schmidt MEP, Vice-Chair of the Development Committee has just given an interview to German radio along these lines.

The blogs are very hot on this. I have not read all, but have not seen one which supports him staying. Many emphasise the corruption and hypocisy angle. See Anupam Chander, Da Weaz, and Development Crossing, among others.

Bretton Woods Project broadens the debate to another scandal, in danger of getting overlooked. As they put it: "In another damaging blow to Wolfowitz's leadership, US NGO Government Accountability Project (GAP) has revealed an email trail in which recent Wolfowitz-appointee Juan José Daboub pressures Bank staff to delete any reference to family planning in both the Madagascar country assistance strategy and in the Bank's health strategy". Another example of his lack of judgement, and lack of distance from the US administration where he previously served.

Roberto Bissio, who runs the Instituto Tercer Mundo out of Uruguay, calls for the whole Wolfowitz saga not to overshadow the real issues. In his words "The countries that control the bank have committed themselves to be accountable for the effectiviness of ther aid both to their taxpayers and to the poor majority of the world population that receives (or should receive) that aid".

Posted by Alex Wilks at 02:37 PM

Europeans come out against Wolfowitz Well, European NGOs anyway. Eurodad has just released a press statement backing the calls for Wolfowitz's resignation.

Worryingly our sources in Washington tell us that well-placed European officials there are leaning towards striking some deal with Wolfowitz. To let him stay, in return for certain concessions on issues close to European government's hearts.

The last thing we need now is more shady deals. We'll bring you more on this throughout the day - a number of colleagues are meeting a whole batch of European Executive Directors in DC this morning.

Posted by Alex Wilks at 01:41 PM

The FT puts the boot in Following their blistering editorial yesterday the Financial Times has a lead story on its front page with much further evidence and information. The comment piece by Krishna Guha is also well worth a read.

Choice extracts:
"If the president stays, it risks becoming an object not of respect, but of scorn, and its campaign in favour of good governance not a believable struggle, but blatant hypocrisy."

"Paul Wolfowitz was under pressure to resign as president of the World Bank on Thursday after admitting he was personally involved in securing a large pay rise and promotion for a Bank official with whom he was romantically involved."

"The president of the World Bank has one asset: his credibility. The Bank’s capacity to make a difference lies not in its money and ideas but in its ability to be the world’s voice for development. This includes, as Paul Wolfowitz, the current president, has insisted, being the voice for good governance. Recent revelations have, however, demonstrated such serious failures that the Bank’s moral authority is endangered".

If the World Bank president has totally lost the confidence of the FT then imagine how hard it will be for him to retain the confidence of many others. Impossible.

Those with long memories on this issue will remember that it was the FT that first broke the story that Wolfowitz might be the US government's candidate for World Bank president. Back on 1 March 2005. At the time this was widely suspected to be a bit of kite flying to make the real candidate look good by comparison.

Posted by Alex Wilks at 11:02 AM

World Bank Staff Association memo in full We are pleased to bring you the complete memo sent yesterday by the body representing the World Bank's 10,000 staff. Their killer point? They have lost faith in Wolfowitz as World Bank president and have been told by some Bank board members that the board's enquiry is not being properly conducted. They say: "it therefore seems impossible for the institution to move forward with any sense of purpose under the present leadership, especially in our endeavor to assist governments and their people in improving their own governance". Staff Association Memo (PDF).

They demand a list of documents and testimony given to the board. If any readers have these, feel free to send them along.

Yesterday, the Washington Post reported that "Wolfowitz attempted to address about 200 staffers gathered in the bank's central atrium but left after some began hissing, booing, and chanting 'Resign. . . . Resign.' He had gone past the staff gathering after a news conference where he said, "I made a mistake for which I am sorry."

This is fighting stuff from the Bank's Staff Association and not something that they would undertake lightly. But, for the record, the Staff Association - under the same leadership as now (Alison Cave) did contest aspects of the original Wolfowitz nomination. See our posts from that time: results of Bank Staff Association survey. Staff Association demands a say. Further Bank staff rumblings. Once Wolfowitz was confirmed, however, they backed down. Until now, that is.

See also a great post by Obsidian Wings explaining how public figures should act and how Wolfowitz got it wrong.

Posted by Alex Wilks at 09:08 AM

Inputs welcome As before, when we sparked a swarm of e-mails from World Bank staff, journalists, activists, etc, your inputs are welcome. Just e-mail contact@worldbankpresident.org. Two of my Eurodad colleagues are in DC, and many of our network members also. So watch this space for their insights on a proposed civil society statement, what was said to Wolfowitz at a reception this evening in DC, and what goes on at a press conference organised tomorrow (13th April), with Danny Glover providing star power. The latter is at at the Hotel Lombardy, 2019 Pennsylvania Avenue NW

The press conference aims to raise concerns about economic policy conditionality and climate change, but these issues as others may be overtaken by the Wolfowitz scandal. For more on the deeper issues, see the IFIwatchnet site which pools documents, meeting dates etc from NGOs across the world.

Posted by Alex Wilks at 11:50 PM | TrackBack

Where you heard it first Two years ago we closed this blog after an intensive web campaign to expose the World Bank president process, and the Wolfowitz nomination. Now we're back, at least for a while. Why? Because Wolfowitz is all over the news again, and is in deep trouble. But above all because this blog was among the first to publish on the potential conflict of interest with Wolfowitz and Shaha Ali Riza. See also this post with Bank Staff Association views at that time.

In other words the issue was known about and should have been avoided. The Bank's board, Staff Association and many NGOs are again either considering or making strong statements about Wolfowitz, including calls for his resignation. Don't want to tell anyone we told you so, but we did say that Wolfowitz's relationships (political and otherwise) would bring trouble.

More very soon: just wanted the blogosphere to know we're back, and urge you to consult this site for background.

Posted by Alex Wilks at 11:33 PM | TrackBack


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