Ted Olson: Olson personally represented Bush in the 2000 Supreme Court case, and was then awarded the position of Solicitor General. Olson also provided “assistance” to the Paula Jones legal team in her case against former President Clinton, and “was a public supporter of his longtime friend, Kenneth Starr” during Whitewater.

Posted by The Beaver at 02:32 PM

Food fights at the White House. The FT reports that the Bush administration is divided into three Wolfowitz camps. Predictably, Cheney and Rove are reported to be leading the who-cares-what-rest-of-the-world-thinks posse, arguing that loyalty should win the day. If only those Europeans would just get over Iraq already...

Paulson and a select few are apparently focused on long-term US interests (including handpicking the next president) at the Bank. Wolfowitz is a liability and should be sacrificed.

The third team of "non-ideological conservatives" appears to have recruited Rice. They argue that Wolfowitz needs to go to prevent more damage to Bush. With Bush's approval ratings hovering below 30%, team Condi's position seems irrelevant at best.

This "internal dysfunction" is aggravated by a general ignorance of what the Bank is, a lack of vision regarding what it means to the US, and a knee-jerk disdain for multilateral institutions. A Paulson camp member concludes: “From a strategic point of view we could not have played this any worse.”

Sounds familiar.

Posted by Shannon Lawrence at 01:36 PM

Washington Post speaks of months to wait. I've been scouring the net this morning to look for new elements on the deal to get Paul Wolfowitz out of the Bank. There are few to be had. A mention of the possible timetable in the Washington Post caught my eye, however. A senior White House aide told the Post that Wolfowitz might negotiate to stay at the Bank "for a few months" once the agreement is reached.

It's not clear what he will do there if so - his staff, board and others look very unlikely to be prepared to work with him, whatever is stated about shared responsibility in the settlement that is being hashed out behind closed doors.

The Post describes yesterday as "a day full of rumors, counter-rumors and closed-door meetings, the Wolfowitz saga turned into an only-in-Washington standoff". It continues "The Bush administration, navigating the currents of international diplomacy, remained sympathetic to Wolfowitz's plight but has appeared less willing by the day to spend political capital on him. Officials were eager to wrap up the unpleasantries and move on".

It then quotes a White House aide saying that whatever is decided it is not as if "Paul would resign eight minutes later". Well we have all seen what a thick skin the guy has.

But no paper this morning seems to remind readers of the rumoured 400,000 dollar bonus that Wolfowitz is said to be entitled to if he stays in office for two years from his start date. That would mean he needs to hold on until 2 June, just a couple of weeks away. As far as I know this rumour has not been denied since it first surfaced about two weeks ago.

Posted by Alex Wilks at 11:49 AM | Comments (20)

Broken Systems. Devesh Kapur, co-author of the Bank's official history, pins the blame on the World Bank's Board and shareholders for "sleeping at the switch" and ignoring Wolfowitz's management failings for so long.

"The fact that this problem arose in the first case and continued for so long is a severe indictment not just of Wolfowitz but of the bank's Executive Board, and by extension its principals, the member countries of the bank. And therein rests a disquieting foretaste of a deeper malaise facing not just the World Bank, but international organizations in general."

Kapur goes on to argue that the "entitlement of the US" to appoint the Bank's president is the real issue, coupled with the obligatory "strategic morality" of developing countries.

"Industrialized countries have not given up their privileges and the rising powers are unwilling to exercise leadership. The outcome of the mismatch between a global institutional architecture set up six decades ago and subsequent fundamental shifts in power is a growing indifference toward international organizations set up in the post-war era."

And when he's not being blamed for destroying global insitutions, Wolfowitz faces charges in the AP that he's yet another indicator of Washington's moral bankruptcy.

"Alberto Gonzales and Paul Wolfowitz could be poster boys for what's wrong with politics today _ cronyism, incompetence and a brazen lack of accountability that has voters craving change."

While Wolfowitz and Gonzales will eventually go, "the system in which these two men flourished will still be broken."

Posted by Shannon Lawrence at 07:45 AM

Wolfowitz Deathwatch Continues Paul Wolfowitz continues the role as the Generalissimo Franco of the World Bank, clinging on without any scrap of integrity, and now with not just one, but two obdurate lawyers (the voluble Bob Bennett and, it seems, new US Executive Director Eli Whitney Debevoise II.)

Steve Weisman reports in the NYT that Wolfowitz is pushing for a deal to save his integrity (!?!), while AP is a bit more optimistic, rather than exoneration—the very idea—a finding of shared blame. While this might be easier for Wolfowitz and his cronies to swallow, it would require the Board to admit that its predecessors were not exactly alert and diligent in the two previous opportunities they had to deal with Wolfowitz and his girlfriend.

Not obvious they’d want to do that, though this is an area where some compromise would not be a bad thing. This would involve admitting that it was OK that Shaha's situation drag on until after Wolfowitz's contract was signed, that the Ethics Committee was right not to inquire into what her honey had directed, and that John Smith the whistleblower could, of course, be blown off when he came forward in early 2006, twice, to denounce the sweetheart deals for Shaha and the cronies. (Sounds like a indy rock group)

Meanwhile, it is rumored in the corridors that the erratic and attention-seeking Canadian ED, Samy Watson, was defending Wolfowitz in the Board, and apparently supporting the obstructive Americans, while Finance Minister Jim Flaherty, his boss, was back in Canada taking credit for having pushed Wolfowitz into such negotiations. This is typical of the Harper government, playing both sides against the middle as it attempts to curry favor with anyone who they think will be fooled.

Get a good night’s sleep, iron your blue outfits and get back to the deathwatch today.

Posted by Deep Insider at 05:21 AM

Wolfowitz to Board: I'll Only Quit When You Admit I've done Nothing Wrong. (Update). I'd hate to be a World Bank board member just now. According to this piece in the New York Times, Wolfowitz wants to be officially cleared of all wrongdoing before he steps down.

The report continues:

"At the same time, talks took place between emissaries of Mr. Wolfowitz and bank officials with backing from board members who favored easing him out without provoking a confrontation with the Bush administration. Bank officials said the negotiations were aimed at finding a way for the board to accept the findings of the bank committee, while also declaring that Mr. Wolfowitz had acted in good faith and that mistakes were made by all sides."

And on the claims that he's going to continue to hold out (Bennett asking for a vote): "a last-minute appeal by Mr. Wolfowitz to deny the charges against him and to demand a fair process in which he could stay on the job seemed to backfire."

Further details and quotes are added by the LA Times this morning. They include the following from a Bank board member. "We're in the endgame. He may be denying it, but he is resigning."

The LA Times says Wolfowitz still may attend the G7 finance ministers meeting in Potsdam tomorrow. This despite the German minister's comment yesterday that he was not welcome to attend events in their country.

Posted by Sameer Dossani at 03:33 AM | Comments (18)

Wolfowitz must have had a busy day This interesting anecdote from a reporter from CNN says a lot about the state of mind of Wolfowitz and his high-priced attorney on this very "depressing" day

In summary as reported in the story highlights on the CNN website:
• Reporter tries to reach embattled World Bank chief's attorney
• He gets hold of lawyer, but call goes through two others first including someone who says abruptly, "This is Paul Wolfowitz."
• Attorney says Wolfowitz will not resign "under a cloud"

and "he will rather put this matter to a full vote" as reported in various newspapers.

I guess it is "All or Naught".
Well tomorrow is another day and someone has managed to survive for one more day!

Posted by The Beaver at 01:34 AM

Still fighting? You pay your legal team to back you when everyone else has given up. True to form, Robert Bennett is still fighting: "Mr. Wolfowitz will not resign under this cloud and he will rather put this matter to a full vote."

Posted by David Steven at 11:27 PM

Board adjourns for the night. Those of us/you who thought we were going to see some resolution tonight look like we are going to be disappointed. I have just been told that the World Bank board has issued the following statement: "The Executive Directors of the World Bank Group continued their deliberations on issues raised by the report of the Ad Hoc Group and in their meetings with Mr Wolfowitz yesterday. They will continue their deliberations tomorrow morning (Thursday May 17)".

The vacuum left by this very terse board statement is being filled by Wolfowitz's lawyer, Robert Bennett. He has told Reuters that his client won't resign and that the board will need to vote if they want him to go.

I imagine this is just more Bennett sabre-rattling because the negotations were going badly.

However one board member denied the speculation here and in many outlets (see for example Voice of America and the New York Times) that detailed exit negotiations were under way in the Bank today. "We spent the entire afternoon discussing the report. We did not talk about exit terms or deals for Wolfowitz," said a Board member who had been present.

More as we get it.

Posted by Alex Wilks at 11:23 PM

This site subject to attack, but now we're back. Many readers have contacted us in the last four hours wanting to know what has happenned to our blog. It seems we were targeted by a coordinated internet attack wanting to take us off air at this crucial time in the Wolfowitz saga. Our hosting company says that the connections pattern seems to indicate a 'denial of service attack causing load spikes on the server'.

Our first priority was to get the site back up (compromising on the graphics - sorry). The next will be to get you all the information about this evening's negotiations on Wolfowitz's exit. The third will be to pin down who has been causing our site to go dead just as this story was reaching its endgame.

This afternoon, within minutes of worldbankpresident.org posting a story detailing the strong rumours that Wolfowitz’s resignation is to be announced this week, the site went down (at around around 13.45 EST). The site’s hosting company says that the logs are suspicious, almost certainly indicating a coordinated internet bombardment aiming to take down the site.

We are asking ourselves of course whether this could be one of the final acts of aggression carried out by friends of Wolfowitz while he is in public office?

Either way we are now hear again to publish the full low-down on the deal which is likely to accompany the Wolfowitz departure. And of course to track the process and outcome of who will succeed him. There is still lots of work to do, and we will play our part.

Posted by Alex Wilks at 11:14 PM

Exit this afternoon for Wolfie According to ABC News, World Bank officials say the bank's board is completing an "exit strategy" that will allow World Bank President Paul Wolfowitz to resign this afternoon and "still save some face" over the issue of his efforts to seek a promotion and pay raise for his girlfriend at the bank.

The report was filled in @ 12:42 but according to Reuters, the meeting was adjourned at that time at the request of the US ED.

Is it because WH has realized that " not all options are acceptable" and that they have to "throw in the towel" so that they do not appear to have the upper hand in this whole saga? the Board was requested to adjourn so that back-room discussions could happen and the WH could review its options

UPDATE:May 16 @ 15:30/17:45
According to WaPo ,the proposal from the WH was for the Board to reprimand the Prez for favoritism BUT NOT to give him the axe- in other words-just a slap on the wrist for being a naughty boy!
Well, unfortunately the US does not carry its weight these days and the Board whose members were offended by such a request decided to reject it.

The Guardian is saying to expect an announcement soon (currently 17:45 EST):
Mr Wolfowitz is deep in discussion with bank officials and members of the US administration, to broker a deal allowing him to step down before the bank's governing board passes a resolution condemning him for ethical violations and directly calling for him to step down.
An announcement on Mr Wolfowitz is likely to be published within the next few hours, sources suggest - although the wrangling over the terms of his departure could delay it. Mr Wolfowitz is demanding the bank publically accept some of the responsibility for the conflicts of interest that he was accused of by an internal investigation.

Posted by The Beaver at 06:32 PM

Voices of World Bank women. A friend inside the bank has just emailed me the following comments from two women staff members posted on a bank internal bulletin board earlier today.

The first one comes from someone calling herself: "Angry Muslim Woman"

Posted By Angry Muslim Woman Wed, May 16, 2007, 12:25

I do not know Riza except through her personal statement and the transcript from the Ad Hoc Committee Report which show her to be completely solipsistic. As Muslim woman I find it offensive she keeps using Islam as defense for her sense of entitlement. But I find it even more offensive that Wolfowitz and his supporters are portraying her as an angry MUSLIM Woman---this is disgusting. If anything, this type of comments reflects very badly on Wolfowtiz, his character, his judgment and his ability to lead. It is very disturbing to see that he is willing to sacrifice anyone and everyone to hold on to power. He is no leader and should never have been in position to be one.

another one, few minutes later, comes from "An Asian Woman"

Posted By To Angry Muslim Woman Wed, May 16, 2007, 12:29

Bravo! As an Asian Woman I have been feeling extremely disgusted by Riza's continuous whining amount her religon and her race. I am glad you have spoken out. Solipsistic is definitely the word for her!!!!!!!!

If you are a woman working in the bank, here is a chance for you to tell us what do you think about Ms. Riza and her argument that she was discriminated against because she was a Muslim, an Arab, and a Woman?

Posted by A Washington source at 05:44 PM | Comments (6)

Tide finally turns against Wolfowitz As the Board has apparently adjourned for lunch. everyone is holding their breath. "How can he stay?" "Whatever is he thinking?" "Surely they'll not pay him to leave!" "Maybe he won't go, oh no." Fortunately the fix seems to be in.

Although no less than six members of his security detail are scheduled to fly out tonight to Germany, where the Development Minister has withdrawn his invitation, Paul Wolfowitz remains beleaguered in his office. Perhaps he is reading the transcripts, too.

Maybe from the Robin Cleveland interview, where when asked why Shaha couldn't have moved to an independent group, even an ED's office, Robin said: "after you meet with her this afternoon, you see if you would like her to come work for you" Pulling up the drawbridge.

Canada no longer supports the US position of delay, now that the process is over. The Europeans are falling in together. Michael Goldfarb in Huffington Post summarizes why Paul Wolfowitz's (dwindling) US supporters don't get it.

"The Bush Administration and its enablers in the think-tanks and the press are so far gone in their inability to recognize that American power is wildly diminished that the orderly functioning of the world is now jeopardized. By forcing Wolfowitz's resignation the partners hope to rescue the Bank's reputation but also rescue Washington from itself. Not out of a sense of altruism, but because the international order cannot function so long as the most important country on earth is led by people blind to reality in the way drug addicts are blind to reality." Meanwhile, Wolfowitz's supporters inside the Bank are recycling links to old WSJ op-ed pieces. INT staff are allegedly behind that, but who knows?

And even the Washington Post gives a Wolfowitz a grudging push, finally, in an editorial Wednesday morning. Like so much of their news coverage, which has been lazy and lacks the insight and depth of the FT and the NYT, the editors are making this a local bit of scandal, and give only passing reference at the end to what should be a newspaper-of-record's perspective.

But the bank still matters as an institution that helps the world's poor. Bush administration officials so far have fought for Mr. Wolfowitz to keep his job. That's no longer in the bank's best interest.

They've got that right, as Sebastian Mallaby pointed out. And they are right that the whole affair makes you want to go out and wash your hands. The old Board did not do its job, so let's not blame the current Board for trying to make amends.

Posted by Voice of Reason at 05:38 PM

Board adjourns meeting At the request of the US, the 24-member Board deliberating Wolfowitz discipline options has adjourned until 2:30 p.m. (1830 GMT) reports Reuters. It mentions also that the US has withheld its endorsement of the Report from the Ad Hoc Panel

This is a bit surprising when the Board has issued a statement that the "US needs to take responsibility for their man" according to Wolfowitzmustresign Blog:
"World Bank board members expressed their irritation today at attempts by the White House to cut a back room deal yesterday in the Wolfowitz debacle and said that the Bush administration needed to step up and take responsibility for their appointee."

Is it because the WH is shifting again in its support for their boy?
"This has certainly been a bruising episode for the bank, and what you have to do is figure out a way forward to maintain the integrity of the institution," White House press secretary Tony Snow said. "And, therefore, when you do it, you're going to discuss everything. That's what you would normally do," he added.

May be it would be worth their while to read the following article by Michael Goldfarb: Wolfowitz: A View From the Other Side of the Atlantic

But no matter what the apologists say, the hot-air inflating the scandal and the pressure for Wolfowitz to resign are not about payback for Iraq. It is about something they - the Washington crowd - just don't get.

You can't preach anti-corruption and be seen not to practice what you preach. You can't look at African leaders with wives, children, cousins and their children, and families of key cronies all on the payroll and be making special arrangements for your domestic partner and hiring political hacks whose sole qualification for the work seems to be loyalty to President Bush. It's called hypocrisy, and while "hypocrisy" isn't an indictable crime, it makes reforming an institution like the World Bank and insisting on better governance to the recipients of its loans virtually impossible.

Posted by The Beaver at 04:45 PM

`C'est la Vie'. South African Finance Minister Trevor Manuel is quoted as saying: "there should be a parting of the ways'' between the bank and Wolfowitz.

In this Bloomberg report , Mr. Manuel goes on to say

``I think we must live with the decision by the executive board,'' Manuel said in an interview in Shanghai, where he is attending the annual general meeting of the African Development Bank. ``It's unfortunate but c'est la vie.''

Posted by A Washington source at 03:26 PM

Wolfowitz not welcome anywhere. Few countries want to have Wolfowitz come knocking on their doors these days and less are willing to even offer him token support.

First, Egypt and Saudi Arabia refused to accept to play hosts to Wolfowitz and canceled plans to receive him last week. Then came news that he will not be going to an international development conference in Slovenia scheduled for this week. Now, Heidemarie Wieczorek-Zeul, Germany's development minister has uninvited him outright, saying Wolfowitz is not welcome at an Africa forum the bank is holding in Berlin next week if he is still in his post .

He is still welcome ,however, in the US and probably Japan, if not by the people, at least by the government.

Posted by A Washington source at 02:34 PM

Wolfowitz's defence: what's the outlook? Wolfowitz's statement yesterday really repays careful reading. Posted here (PDF) late yesterday, you can see many comments already from site visitors. But what amazes me most about it is the way that Wolfowitz says he did nothing wrong on Riza, skips over several other issues in the Ad Hoc Group's report, then proceeds to admit that his overall management at the Bank has been a disaster.

Meanwhile there are hints of a new deal being offered by the US government, that the Canadian government has swung against Wolfowitz, and that the Europeans are not softening their positions.

Wolfowitz's defence
In short it's this:
a) I was right (enough) on Riza.
b) what this fuss is really about is his 'leadership and management style'
c) on the latter there are 'many significant things I need to change'
d) I have nothing to say about the aggressive and misleading public announcements and press briefings by my advisers and lawyer.

In other words he is trying to wriggle off on the Riza charge, is silent on the dodgy messaging which has helped bring the Bank into disrepute. He admits that his relations with staff have long been in the dust and that he has made many mistakes that are surely much more serious than the conflicts of interest around his 'girlfriend'. His most telling admission is his over-reliance on advisers from outside, and failure to talk to Bank staff.

As many have argued this morning on our comments board this is too little, too late, and many many questions remain unanswered by Wolfowitz's defence.

U.S. government strategy
The Bush administration seems to be shifting strategy in the face of mounting opposition to Paul D. Wolfowitz. On ABC News a White House official told ABC's Jonathan Karl that 'all options are on the table' regarding world bank president Paul Wolfowitz, and 'it is an open question' whether he should remain as president of world bank. The New York Times has picked this up, saying the White House has "shifted course" and opened the door today to him resigning voluntarily as World Bank president if the bank board drops its drive to declare him unfit to remain in office. This offer has been made in a teleconference between finance ministries in the USA, Europe and Japan. Apparently, the offer was rejected.

A Bank official explaints to the NYT: “The odds of this flying are very, very low,” said a senior bank official, speaking anonymously about sensitive internal discussions. “It is too little, too late. It might have been possible a day or two ago, but not after he was found guilty as charged of a whole slew of violations.”

I agree. As I argued in an article on Eurodad's website earlier today the Europeans should toughen their position, and demand that the anti-corruption crusader falls on his sword. In return, as negotiation will be required the Europeans should offer to forego appointing the next head of the IMF.

A devastating Guardian editorial today reminds readers of Europe's complicity in the gentleman's agreement which stitches up the heads of the Bank and Fund respectively. The Guardian leader points out that "Europe has resisted any change of this cosy arrangement for retiring politicians." Now is the time.

Posted by Alex Wilks at 11:47 AM

Another investigation of Wolfowitz and Riza starts at the State Department. The FT is reporting that the US State Department, where Riza went (or did not, depending on who you believe) for her external assignment, has launched a new probe on Wolfowitz and his role in Riza's career.

"The department is reviewing anomalies in security vetting and legal complications in the transfer of Shaha Riza from the bank to its Middle East section, said two officials." the FT reported.

The article goes on to say:

"The inquiry underlines how the leadership crisis threatening Mr Wolfowitz’s presidency of the bank could further entangle his allies in the Bush administration."

and furthermore

Inquiries by the bank helped trigger the department inquiry along with a separate disclosure about a Pentagon investigation that linked the two Middle East staff (Scott Carpenter and Elizabeth Cheney) to Mr Wolfowitz and Ms Riza

Mr Wolfowitz told investigators probing the possible conflicts of interest that Mr Carpenter and Ms Cheney had also recommended Ms Riza for the contract and that the matter was subsequently closed, according to a copy of the inspector general’s report. The department is reviewing that claim by Mr Wolfowitz along with irregularities in Ms Riza’s transfer, an official in the department said.

Posted by A Washington source at 03:16 AM

Statement of Paul Wolfowitz Here is a copy of what Paul Wolfowitz said to the board of executive directors this afternoon in his opening statement.

After a quick read of the statement , I say, he had nothing new to offer. He - delusional as this sounds - seems to think that by voting him out the board will damage the bank more. Not much different from the argument that if US troops leave Iraq now - after they have destroyed it- Iraq will be - well how should I say this, destroyed !

Posted by A Washington source at 02:09 AM | Comments (38)

Wolfie pleads for his job but may resign Just saw this: Adelaide now
"World Bank President Paul Wolfowitz implored the lender's board today to let him stay in his job, promising changes in his management style in the wake of a damaging scandal over favouritism, according to a hearing transcript."

Update:
This is the full story

Posted by The Beaver at 12:52 AM

Wolfowitz Lifeline Shortens and John Briscoe Speaks. Lots was going on at the Bank today. Internal Communications, whose courage is keeping the bulletin boards going strong, had a busy day deleting inappropriate posts, caught in the crossfire between those who thought he should go and those who thought it was inappropriate to think he should go. You had to be quick to see anything objectionable ("not compatible with the code of conduct") and it turned out that 2 of IC's 7 staff were engaged 24/7 in the purging. If that ratio is true elsewhere in the Bank, then The Current Situation is burning through $2 million a day.

Speaking of unnecessary expense, Paul Wolfowitz, two bodyguards and "an advisor" made plans to crash the G7 meeting of finance ministers. In another part of the Bank, Brazil Country Director John Briscoe circulated a note about why he had not joined 35 of his 37 colleagues in signing a joint letter sent earlier Tuesday. His text, sent to the "extended Brazil team" (which meant that everyone else in the Bank got two blind copies from friends), is below

Dear ___

John

It's obvious John Briscoe is "disappointed" in Wolfowitz. But he does not see giving your girlfriend a raise, a promotion and moving her outside, or taking advice so bad you don't build up any capital and demonstrate an utter lack of strategic leadership, to the point that the Bank's reputation suffers, as firing offences.

Most would disagree with John.

Posted by Deep Insider at 11:44 PM

Media Round Up It's been a busy day for news (and we haven't even heard the results of the 5pm discussion between Wolfowitz and the Board). Here are a few of the more interesting tidbits:

1) Bush Dilutes Support for Embattled Wolfowitz. Britain's Daily Telegraph is taking the "Wolfowitz losing support" view on today's White House press briefings, quoting Tony Snow as saying "Again we support him, but we also know, and he has said that he is willing to be sitting down with members of the World Bank to try to figure out the proper way to serve the best interests of the institution," which may involve Wolfowitz going, presumably. The best line: Asked whether the White House was sending mixed messages, he said: "We're not trying to send a wink, wink, nudge, nudge signal."

But it sounded very much like that.

2) On the lighter side of things, Tom Burka.com has a piece entitled Wolfowitz Barricades Self In World Bank Office. Good political satire here referring to Wolfowitz claiming "squatter's rights", ordering Shaha Riza to barricade herself in Lynn Cheney's office, and Alberto Gonzales following suit with a couple of filing cabinets worth of subpoenaed documents.

3) Referring to the White House line that this is not a "firing offense", Daily Kos points out that A minimum wage worker can get fired for a nine dollar discrepancy over the course of 3 months. Why should Wolfowitz be excused for a $60,000 conflict of interest?

4) For those of you who read French (et je sais que vous etes la) Le Monde has an opinion piece calling for the end of the Gentleman's agreement system whereby the U.S. appoints the head of the World Bank. Truthout has the English translation here. Unfortunately, with lines like "at present, the Europeans are hiding behind the White House", this will only give credence to those who argue that this whole thing is just a conspiracy to allow Europe to appoint the head of the World Bank. But good that they're at least asking the deeper questions.

Posted by Sameer Dossani at 11:06 PM

Canada on Board, Whither Japan? An anonymous source has written the following open letter, urging Japan to renounce its support for Wolfowitz.

Open Letter To:

The Hon. Koji Omi
Minister of Finance

The Hon. Taro Aso
Minister of Foreign Affairs

Dear Mr Omi and Aso

It has been over 60 years since World War II ended. Three generations have now grown up since the ruinous war that resulted in Japan's defeat and the unusual status of having a constitution that prohibited offensive forces.

Japan, while possessing a large 'Self-Defense Force', is unable to fully function as a member of the international community under this constitution.

Hence, Japan tries to ' make up' by making other contributions like outsized financial contributions to international organizations.

Japan has a longstanding goal to become seated as a member of the UN security council and in the past decades, have expended considerable political and economic capital toward that goal.

While Japan's aspirations to put the past behind it and become a normal country are opposed by some nations, there is a compelling need by the international community to, no matter how difficult, forgive and forget Japan's past and welcome Japan's increased participation by carrying the burden of international governance.

From the standpoint of the international community, Japan has been a valuable financial contributor to multilateral organizations and certainly merits a status and stature concomitant with its contributions.

However, in order for Japan to be truly recognized as a legitimate member of the international community, it has to be seen as upholding the highest standards of international governance in the organizations it participates in like the World Bank Group.

Indeed, Japan's record in responsible governance is a necessary condition for the international community to accede to Japan playing a larger role in areas like global security.

However, Japan's recent behavior in the "Rizagate" scandal at the World Bank have raised fresh questions about the maturity and suitability of Japan's international citizenship.

After the release of the Ad Hoc Group's report yesterday, there cannot be any doubt that the behavior of Paul Wolfowitz during the Rizagate scandal and his subsequent behavior during the investigation has damaged the World Bank Group.

Wolfowitz has also demonstrated no remorse, refused to accept any responsibility, or put forward no credible plan to restore the World Bank Group's credibility and stature in the development community.

Japan, as the second largest shareholder of the Bank, have substantial interests in the integrity of the institution.

Yet, for whatever reason, Japan has elected to maintain its support for Wolfowitz despite compelling evidence that his leadership has harmed, and will continue to harm the Bank.

Loyalty to allies, especially crucial ones like the United States, is a laudable trait, and therefore, Japan's stance can be understandable up to a point.

However, those who are truly loyal subjects of the Emperor, or King, sometimes have to disagree with the powers that be regardless of the short term consequences to the relationship.

If Japan is truly loyal to the United States, Japan must be occasionally bold enough to tell the Emperor what is best for them.

Do you think it might be possible for Japan to summon up the courage to do the right thing at the World Bank?

Sincerely,

Doctor No

Posted by Sameer Dossani at 10:27 PM

Elementary my dear Watson. The FT reports that Canada has sided with the Europeans in refusing the US request for more time in dealing with the crisis. This leaves only Japan that continues to blindly toe the US line - supporting US calls to separate discussion of ethics violations by Wolfowitz from the broader question of whether he should remain in his post.

The FT says there are divisions among the 27-strong bloc of countries 'calling for a quick resolution to the crisis' about whether at this point to threaten to withhold funds if Wolfowitz holds on. Heidemarie Wieczorek-Zeul, German development minister said the Bank would find it hard to raise finance for its soft lending programmes with Wolfowitz at the helm. But her Dutch counterpart Bert Koenders said it was too early to discuss such measures.

Posted by Jeff Powell at 09:13 PM

More invective about Palacio. Worldbankpresident.org received the following about Wolfowitz-appointee general legal counsel Ana Palacio from someone who claims to be a World Bank staffer - "sent anonymously for fear of reprisal".

She is known to be overbearing and yell on a regular basis even at the
"charming young spanish woman" as you succintly called her on your website, Elena Segura. She is known to intimidate people by mentioning her proximity to the President. Her conduct can only be characterized as unprofessional. Since the time she has been holding the position, two members of her inmediate staff have left after very short periods on the basis of "untenable working conditions".

It would be interesting for you to find out what has she done in substance since she assumed her position last August. Chances are you'll find out not much except destroying people's careers without due process and belittling the former General Counsel's accomplishments. Throughout the Bank, staff find her absent, incoherent, rude and simply not fitted for the job.

Does this account fit with your experience? Comment below or send your comments anonymously to contact@worldbankpresident.org

[Note: Thanks to 'Hector Oliden' for commenting on a previous posting on Ana Palacio, asserting that Palacio's senior legal counsel Elena Segura graduated in 1998. While we have been unable to verify this against earlier evidence which suggested she finished her law studies in 2005, we appreciate all information in getting to the bottom of the actions of Wolfowitz appointees. Perhaps Ms Segura would like to put the matter to rest?]

Posted by Jeff Powell at 09:00 PM | Comments (15)

Rizagate whistleblower speaks. US NGO Government Accountability Project (GAP), which broke the story about Wolfowitz' interventions on behalf of his partner, has posted a letter sent today from the Bank staffer who leaked the original Shaha Riza payroll records. The staffer says the whole ugly affair has exposed "the underlying inadequacy of the Bank's governance framework", calling for a drastic overhaul of whistleblower protections and the leadership selection process.

Posted by Jeff Powell at 08:44 PM

It's unanimous. The great and the good (OK, I'm on there so it's not exactly an exclusive club) from NGOs, academia and development thinktanks have signed on to the call from the Brookings Institution that the "outdated convention should be abandoned and replaced with selection procedures that reflect two key principles: transparency of process, and competence of prospective leadership without regard to national origin." Just do it.

Posted by Jeff Powell at 08:37 PM

UPDATE:White House: Turning of the tide? A senior White House official has told ABC News that "all options are on the table" regarding Paul Wolfowitz's future and "it is an open question" whether he should should remain as President of the World Bank.

Verbatim quotes from the site:
________________________________________________________________
"If you don't have board support and you don't have staff support, it is hard to get anything done," the official told ABC News.

"There are really two questions," the official said. The first question is Wolfowitz's handing of his girlfriend Shaha Riza's payraise. The second is whether he should remain president of the World Bank.

On the first issue, White House press secretary Tony Snow told reporters Tuesday morning that Wolfowitz may have made some mistakes on that matter but that's "not a firing offense."

On the second issue, the senior official told ABC News "it is an open question" whether Wolfowitz can remain an effective president of the World Bank.
________________________________________________________________
This is the first time that we see some shift from the usual rhetoric of support or full confidence.
Is it the pressure from the Europeans or some realist in the WH has concluded that Wolfie has already dug his hole and no one can help him out ?
I don't believe that Wolfie has requested that the WH stopped backing him so that Riza can continue her career at the World Bank- something that they should have realized two years ago. Anyway, based on the arguments that Wolfie has provided to the Panel, I think that Riza is on "her way out" too. She has been challenging the customary sequence of procedures and working environment too many times and is seen as a nuisance.
UPDATE: May 15 @ 21:00
According to the Guardian, " the bank's executive board decided that its final decision on Mr Wolfowitz would be made without its 24 members consulting their home governments - a move that makes it harder for the US administration to apply pressure."
That's the reason the WH is backing out of its support

Posted by The Beaver at 06:15 PM

Background Reading OK, so it looks like I can't do real work for more than five minutes today without getting a call from the media or an anonymous tipster trying to pass me some bit of gossip. So, here are some background materials that newcomers to the story may find interesting.

1) BBC Q&A. So there's lots missing here (Riza's work for the DoD/State Department in 2003, Kellems resignation, Coll's testimony and other details of the recently released report, etc.) but in terms of the events at issue, this is a good place to start.

2) Alex Wilks' post of April 14 listing some talking points is still extremely relevant. Though details are emerging every day, the basic stories are all in that post.

3) The board laid out a chronology of events from their point of view that is helpful.

Hope this is useful. If others know of good background reading, feel free to post in the comments section.

Posted by Sameer Dossani at 05:43 PM | Comments (2)

A strong indictment of Wolfowitz These are the words that David Corn uses to qualify the report from the Ad Hoc Panel on his blog on the topic: How Wolfowitz and Riza Gamed the Bank

He points out two interesting segments of the report which, to him, should raise the question of his survival.
1.Had Wolfowitz indeed proceeded with a deal after he was warned it was "outside the rules"--a deal that was rather lucrative for his girlfriend--that ought to be a firing offense.
2. Instruction from Wolfie to VP of HR to bypass the General Counsel

As far as Riza is concerned, his take on her Machiavellian travails reflects those that were presented HERE
"It seems she was trying to turn lemons into champagne--that is, using the opportunity to settle old scores and award herself the money she believed she deserved. And Wolfowitz went along with his gal-pal".
He goes on with the following statement:"One doesn't have to read far between the lines to see that panel members believe that Riza tried to pull a fast one and that Wolfowitz enabled her, even cutting out other Bank officials who might have questioned the deal."
And he does have some questions (that we are all asking also):
1. what will the board do in response to the report?
His Answer: It can vote to reprimand or remove Wolfowitz. A reprimand might not be enough for many board members. But the board may not want to pull the trigger. It can issue a vote of no confidence, hoping Wolfowitz will resign.
2. But does Wolfowitz want to put up a fight? So far we have the answer but ...
this may become handy Note: lower the sound level if viewing in the office
3. Is the White House willing to stick with him, as it has done (so far) with Attorney General Alberto Gonzales? George W. Bush can be a stubborn fellow.
(we already have the answer)
He concludes with the following:
"If Wolfowitz manages to stay on after the release of the report, it will be quite an accomplishment for the accountability's-not-us Bush administration."

Posted by The Beaver at 04:32 PM

Wolfowitz mistakes "not a firing offense" "The White House acknowledged on Tuesday that World Bank president Paul Wolfowitz erred in the handling of a pay raise and promotion for his companion but said that was not cause for him to be removed from his job.
"We've made clear that we support Paul Wolfowitz. Furthermore, he has said -- and we agree -- that certainly a lot of mistakes were made in the personnel process. But it's not a firing offense," White House spokesman Tony Snow told reporters." according to Reuters

and he wants the recipients of the WB loans to toe the line on corruption.
"Do like I say not like I do" goes the saying.
Is the word " OXYMORON" applicable in this case?
When Wolfowitz took the helm of the bank, he vowed to uproot corruption and to focus "on a Calvinist obsession with good behavior."

This administration is spiraling downwards as far as ethics and conduct are concerned.
Whew these are "good standards" to abide to for some privileged ones who know that they can't be touched because rules DO NOT apply to them.

Posted by The Beaver at 03:54 PM

All but two World Bank Country Directors Sign Letter Urging "Rapid Resolution" 37 of 39 World Bank Country Directors (CDs) have signed a letter urging a "rapid resolution" to the scandal (i.e.: Wolf out now). One of the two who did not sign is John Briscoe. Those of us involved in water and the World Bank will remember that Briscoe was the World Bank's man in charge of derailing the World Commission on Dams. When he failed to water down the commissions recommendations, Briscoe successfully argued that the Board should effectively take no action (pdf 5 pages).

Well, Briscoe has moved on from the water sector. One tipster writes:

37 out of 39 CDs just signed the hardhitting letter urging rapid resolution of TCS. One of the two who did not sign is John Briscoe, CD in Brazil. Briscoe’s appointment was one Wolfowitz’ first moves to overturn a selection decision at the CD level. Although Briscoe speaks Portuguese, he was found to be otherwise unqualified to be CD. He was one of the Bank's top water specialists, based in India, and had written a capable memo to Wolfowitz on the water sector when he, Wolfowitz, was appointed. This was enough to impress the new president, and Wolfowitz told the Latin America regional VP to select Briscoe even though he had not been a candidate, and was definitely not the region's selection. Briscoe lacked the necessary background qualification. The Brazilian Government was not amused.

The other non-signature was Ms. Naoko Ishii, the Bank's CD in Nepal [correction: Sri Lanka], who was subject to heavy pressure from the Japanese Government.

Posted by Sameer Dossani at 03:35 PM

Wolfowitz--Shock & Awe (UPDATED) As the world turned this morning, printers in World Bank offices around the world got busy with the Ad Hoc Committee's riveting report. First in Beijing and Hanoi, then in Delhi and Islamabad. Then the hapless consultants in lovely Baghdad. Yemen, whose President told Wolfowitz last week "Iraq was a lovely country, until you invaded it." Africa, and the meetings in Europe and parts of the former Soviet Union where cronyism and gangsterism were part of the history, some not so distant.

And, now, at Headquarters. Complaints about the print quality creep into the internal website. But nothing is getting pulled down from the discussion board this morning, as staff and managers settle in to reading potty language, extravagant entitlement mentality, disdain for women colleagues, and even more venal and implausible excuses for breaking every rule in the book.

Para. 102 is being widely quoted: crisis of leadership. This is a model in direct speech, and unambigous conclusion: He must go.

One of my favorite lines is from the Board's interview of Robin Cleveland, who helped Paul Wolfowitz arrange his girlfriend's posting to State. When asked by the ad hoc committee why Shaha couldn't have moved to an independent group, like IEG or even an ED's office, RC said: "after you meet with her this afternoon, you see if you would like her to come work for you..." Guess Robin and Shaha aren't on best girlfriend terms like Ana and Shaha, who text each other little notes on their cellphones.

As managers discuss OPEs (the Bank's extravagant and ill-considered annual performance assessments), the arguments are: "but surely I've been here long enough to be a VP (like Shaha)"; "what do you mean I can't have an outstanding salary increase (like Shaha)?"; "how dare you use language like that to me (like Wolfowitz and Shaha)!" Xavier Coll kept good notes, right down to the four-letter words hurled at him.

Paul Wolfowitz keeps calling the Paris Office to find out where his invitation is to the G7 Finance Ministers' meeting this week. He'll not need a travel request for the ABCDE in Bled (sparing some poor student the embarrassment of receiving an award for the best essay on anticorruption from the man who found new ways) or Potsdam. And, after this afternoon, who would approve it?

Betting is 70% that he will go, but 2:1 odds aren't good enough for Bank staff and stakeholders, who've had enough of behaving like he's in his old job.

Will the last crony to leave please turn out the lights?

Posted by Deep Insider at 03:26 PM

If they f*** with me, I'll f*** with them too [update with pic] In the documents that came out last night, some startling revelations into how Wolfowitz's mind works. When Xavier Coll advised him that the ethics committee may not look kindly on him giving Riza a raise just as she was leaving, Wolfowitz reportedly said:

As Richard Adams tells it amusingly in the Guardian newsblog today:

Sounding more like a cast member of the Sopranos than an international leader, in testimony by one key witness Mr Wolfowitz declares: "If they fuck with me or Shaha, I have enough on them to fuck them too."

Charming, isn't he?

Adams digs out several other juicy titbits from the Board committee report, including the immortal line: "the interpretation given by Mr Wolfowitz ... simply turns logic on its head".

(update: Pic added from the Roadical Left blog just for fun.)

Posted by Sameer Dossani at 11:47 AM

World Bank Country Directors Weigh in on Wolfowitz. Now that the ad hoc committee has reported, most (but not all) of the Bank's Country Directors have asked the Board to get on with it. The following letter was sent today by 37 Country Directors to the Dean of the World Bank board and the World Bank president.

Eckhard Karl Deutscher, Dean of the Executive Board
Paul D. Wolfowitz, President of the World Bank

Theodore Ahlers, Country Director, Algeria, Libya, Malto, Morocco, Tunisia
Pedro Alba, Country Director, Burundi, Democratic Republic of Congo, Republic of Congo, Rwanda
Caroline Anstey, Country Director, the Caribbean
Jane Armitage, Country Director, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama
Michael Baxter, Country Director, Angola, Mozambique, Malawi, Zambia, Zimbabwe
Paul Bermingham, Country Director, Belarus, Moldova, Ukraine
James Bond, Country Director, Benin, Cote d?Ivoire, Mali, Mauritania, Togo
Colin Bruce, Country Director, Eritrea, Kenya, Somalia
David Craig, Country Director, West Bank and Gaza
Yusupha Crookes, Country Director, Pakistan
Ishac Diwan, Country Director, Ethiopia, Sudan
Annette Dixon, Country Director, Kazakhstan, Kyrgyz Republic, Tajikistan,Turkmenistan, Uzbekistan
David Dollar, Country Director, China, Mongolia
Donna Dowsett-Coirolo, Country Director, Armenia, Azerbaijan, Georgia
Hafez Ghanem, Country Director, Nigeria
Marcelo Giugale, Country Director, Bolivia, Ecuador, Perú, Venezuela
Susan Goldmark, Country Director designate, Nepal (from July 1)
Isabel Guerrero, Country Director, India
Carlos Felipe Jaramillo, Country Director designate, Bolivia, Ecuador, Peru, Venezuela (from July 1)
Orsalia Kalantzopoulos, Country Director, Albania, Bosnia & Herzegovina, Kosovo,Macedonia, Serbia & Montenegro
Mats Karlsson, Country Director, Burkina Faso, Ghana, Liberia, Sierra Leone
Emmanuel Mbi, Country Director, Djibouti, Egypt, Yemen
Alastair McKechnie, Afghanistan, Bhutan, Maldives
Judy O'Connor, Country Director, Tanzania, Uganda
Kenichi Ohashi, Country Director, Nepal
Ian Porter, Country Director, Cambodia, Lao PDR, Malaysia, Myanmar, Thailand
Hossein Razavi, Country Director, Gulf States TA Program
Ritva Reinikka, Country Director, Botswana, Lesotho, Madagascar, Mauritius, Namibia, South Africa, Swaziland
Klaus Rohland, Country Director, Russian Federation
Nigel Roberts, Country Director, Papua New Guinea, Timor-Leste, the Pacific Islands
Joseph Saba, Country Director, Iran, Iraq, Jordan, Syria
Madani Tall, Country Director, Cape Verde, The Gambia, Guinea-Bissau, Niger, Senegal
Mark Tomlinson, Director, Africa Regional Integration
Axel van Trotsenburg, Country Director, Argentina, Chile, Paraguay, Uruguay
Joachim von Amsberg, Country Director, Philippines
Zhu Xian, Country Director, Bangladesh
Ulrich Zachau, Country Director, Cyprus, Turkey

Posted by Voice of Reason at 04:01 AM

Wolfowitz broke Bank rules. Bloomberg is reporting that the Panel has found that "Wolfowitz violated the terms of his contract and showed a "disregard for the interests of the institution'' when he ordered a pay raise and promotion for his companion," according to the report released today.

The special panel recommended that the full 24-member board determine whether Wolfowitz "will be able to provide the leadership" to ensure that the bank achieves its mission of fighting poverty around the world.

The report also found that the 36 percent pay increase for Shaha Riza, along with promises of future raises, violated staff rules and that Wolfowitz "placed himself in a conflict-of- interest situation.''

As usual his lawyer is whining about " the rush judgement" whilst Paulson is backing him:Treasury Secretary Henry Paulson today defended Wolfowitz and said he should keep his job, citing missteps "on all sides'' and a breakdown in communications. The U.S. is the largest shareholder in the World Bank.

Paulson "spoke to some of his colleagues today from other countries and expressed that he does not think the facts merit dismissal,'' Treasury spokeswoman Brookly Mclaughlin said in a statement.

Posted by The Beaver at 01:37 AM

World Bank Board of directors releases its report (updated, news links). The board has just released the report by the ad hoc committee investigating the Wolfowitz-Shaha affair.

Happy reading :

May 14 Communication from the Executive Directors

May 14, 2007—The Executive Directors have this afternoon received the second report of the ad hoc group. In the interests of transparency they are publishing immediately the report and all the associated documentation. They will meet with Mr. Wolfowitz at 5:00 p.m. on Tuesday as part of their deliberations on the report.

Annexes to follow.

Please Note: More documentation will follow as noted in the statement above.

Update by Alex Wilks, 15 May - 2.38 EST.
There are several analyses of the above reports in our readers' comments below, and also in today's media.

Reuters
One board official said member countries will make another effort to resolve their differences and Wolfowitz still had a chance of rescuing himself, depending on whether he could present a clear plan for how he could rebuild his credibility.

"Mr. Wolfowitz's contract requiring that he adhere to the Code of Conduct for board officials and that he avoid any conflict of interest, real or apparent, were violated," the panel said.

International Herald Tribune
The committee said Wolfowitz: "did not accept the bank's policy on conflict of interest, so he sought to negotiate for himself a resolution different from that which would be applied to the staff he was selected to head.". This was "a manifestation of an attitude in which Mr. Wolfowitz saw himself as the outsider to whom the established rules and standards did not apply." "It evidences questionable judgment and a preoccupation with self-interest over institutional best interest," the report said.

The committee's report acknowledged that the instructions conveyed to him were "not a model of clarity" and subject to "the possibility of misinterpretation."
Nevertheless, the report concluded, "Mr. Wolfowitz has taken the position that there were no rules that applied to the situation and therefore no rules could have been broken in resolving the matters as he did."

In a gesture to critics of the bank who say that the entire episode showed a flawed governance system, the committee recommended a full review of governance procedures in the future.

BBC
The BBC's James Westhead, in Washington, says the signs do not look good for the World Bank head, with the tone of the panel's comments suggesting he will face at least some kind of censure.

Village Voice
Best extracts:
"Mr. Wolfowitz has taken the position that there were no rules that applied to the situation, and therefore no rules could have been broken in resolving the matter as he did".

"On the contrary, the Ad Hoc Group is of the view that the situation was governed by specific provisions in the President's contract, the Code of Conduct for Board Officials, the Principles of Staff Employment, and Staff Rules as well as the other standards set forth in the Legal Framework described in Section III, above, and discussed in the following sections".

Posted by A Washington source at 01:34 AM | Comments (20)

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

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

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

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

This later came back to haunt her.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted by Voice of Reason at 11:15 PM

Will Wolfowitz do the Attali? Far from without precedent, in 1993, president of the European Bank for Reconstruction and Development, Jacques Attali, faced allegations of personal impropriety and scathing reviews of his performance. He did the honorable thing and resigned.

Posted by Jeff Powell at 11:11 PM

George W. Bush attempts to delay Wolfowitz decision. The White House has apparently launched "an extraordinary last minute effort to save Paul Wolfowitz". They tried to "prevent the distribution" of the Bank board committee report. Despite the U.S. government's previous protestations that the Bank's process must play itself out Bush apparently preferred to talk the issue through man to man with G7 finance ministers. But they refused to take his conference call. Dick Cheney has also gone on the record just now directly saying Wolfowitz should stay.

Cheney's view is simple, if delusional:
"I think he's a very good president of the World Bank, and I hope he will be able to continue."

According to the Wolfowitz Resign blog the Bank board process is no longer good enough for the US government:
"Eli Whitney Debevoise, the U.S. Executive Director, asked Monday morning that the report not be circulated to Board members this morning as planned, in order that President George Bush might reach G7 Finance Ministers by telephone to discuss the matter".

Sadly for him (not the rest of us, however,) "Bush was rebuffed in his requests for a teleconference and instead had White House staff call members of the Bank's Executive Board in a desperate attempt to secure their support for Wolfowitz, prior to their seeing the full report".

The FT has a new story saying that the White House is not taking no for an answer and is still trying to convene this call before the board meets to decide Wolfowitz's fate.

Long-term readers of this blog will remember that George W. had to work the phones hard two years ago to get Mr Wolfowitz appointed.

So, having evaded this last minute spanner in the works, the Ad Hoc Committee was finally able to transmit its report to Board members at 1pm today Washington time (about three hours ago). The board is understood to be meeting later Monday evening. A number of Board chairs are said to be pressing for full disclosure of the report later tonight.

The rest of the known timetable:
- Wolfowitz's lawyer, Robert Bennett, will be providing journalists with copies of Wolfowitz's response to the report this afternoon.
- Wolfowitz is due to address the board Tuesday afternoon. The release of his response ahead of time ensures that his arguments will dominate Tuesday's headlines as the Ad Hoc Committee's report, with Coll's testimony and notes, is not available.

Luckily, however, several journalists are still writing about the known contents of the Bank board report. The best articles I've seen on this is again by Steven Weisman.

Another titbit from the WR blog is that U.S. Treasury Secretary Hank Paulson is not planning on attending the G7 Finance Ministers meeting starting this Friday in Potsdam Germany on May 18-19.

Posted by Alex Wilks at 09:26 PM | Comments (2)

White House playing games:UPDATED Like I have predicted in this update, the White House is at it again with its shenanigans. It is reported in the Wolfowitzmust resign.blog that the White House, through U.S. ED Eli Whitney Debevoise, "this morning launched an extraordinary last minute effort to save Paul Wolfowitz by attempting to prevent the distribution of the long-awaited report of the Ad Hoc Committee."

Junior President wanted to discuss the affair with the G7 countries- Finance Ministers before the 24-member Board could peruse the final report which contained the notes and damaging report from the VP of HR. As reported in the blog: "The report was finally transmitted to Board members at 1pm today. The board is understood to be meeting later Monday evening. A number of Board chairs are said to be pressing for full disclosure of the report later tonight.

Meanwhile, Wolfowitz's lawyer, Robert Bennett, will be providing journalists with copies of Wolfowitz's response this afternoon. Wolfowitz is due to address the board Tuesday afternoon. The release of his testimony ahead of time ensures that his arguments will dominate Tuesday's news cycle as the Ad Hoc Committee's report, with Coll's testimony and notes, is not available."

UPDATE:May 14 @ 19:45
The US is still trying to arrange a call with the G7 countries for Tuesday according to Agence France Press to persuade them to let Wolfie keep his job. Citing The Financial Times ( Note: can't get the FT article yet, except for this one), "US officials want to reach over the heads of (World Bank) hostile board members and development ministers, to finance ministers, foreign ministers and even heads of government, in the hope they can be persuaded to over-rule their colleagues and agree to let Mr Wolfowitz stay," AFP got the confirmation of the set-up of the conference call also from an US official but couldn't get the verification that Wolfie is the main topic of the agenda of said conference call.

Darth Veder is at it again- needs the "smart" Neo-Con to use his position to bring down non- collaborators !!!

Posted by The Beaver at 09:17 PM

More Corruption? Wolfowitz and Nazarbayev? More allegations of corruption are rearing their head, and some more serious than petty cronyism. While we already know that the World Bank has increased lending to some pro-U.S. corrupt governments, documents are coming to light which indicate that Wolfowitz has allowed the World Bank to be involved in covering up shady dealings between a U.S. businessman (James Giffen) and the President of Kazakhstan, Nursultan Nazarbayev. If confirmed, this would have implications far beyond Wolfowitz keeping his job: the Bank, the U.S. government, and the government of Nazarbayev could all be in hot water. Details below the fold.

For those unfamiliar with Kazakhgate, Giffen (an investment banker on Wall Street) was charged with creating Swiss bank accounts to pay for things like boarding school tuitions and expensive jewelry. The money apparently came from oil companies that wanted access to Kazakhstan's oil and gas reserves. Giffen was charged under the Foreign Corrupt Practices Act and his trial is still up in the air. Giffen's defense is that he was in constant communication with the CIA, so for the Department of Justice to prosecute now is absurd. In a notice of forfeiture the DoJ claims that the $84 million will be returned to Kazakhstan through an NGO (chosen through a competitive WB bidding process) and the whole process will be overseen by the WB. In other words, let's not air our dirty laundry in public by bringing this man to trial, let's have the World Bank cover this up and quietly return the money to Kazakhstan's citizens.

In a letter to WB VP Shingeo Katsu the Government Accountability Project is asking some basic questions (like "is it usually World Bank procedure to smooth over potentially explosive bribery material?") As more documents come to light, there will certainly be more such questions.

The March 2003 DoJ indictment can be found here.
The April 2003 DoJ indictment can be found here.

Posted by Sameer Dossani at 08:01 PM | Comments (4)

Former Bank board member blogs his views. Fulsome apologies to Mr Per Kurowski. He is a former Executive Director to the World Bank (for the governments of several Latin American countries). He has been blogging on this issue, but till now I missed it. He has it in for both the Bank board Ethics Committee, and Wolfowitz.

Here is his latest post in full.

The World Bank deserves more than a political row

The Ethics Committee proposed a solution to Mr. Wolfowitz' "conflict of interest" that could have the poverty fighting World Bank paying out US$1.950.000 over the ten years of what could be his presidency (US$ 130.000 plus 50% benefits per year), while receiving absolutely no services at all. No matter how delicately you phrase it as a secondment, this sure must be a crazy and an unethical proposal. How come they did not just help her (or Wolfowitz) find another job for which the Bank did not have to pay? Should that have been so difficult?