who will be next World Bank President What will they do


Wolfowitz resigns! Notice on the Bank website: The World Bank's Board of Directors and Paul Wolfowitz announced Thursday Wolfowitz would resign as president of the World Bank, saying the Bank's mission should be "carried forward under new leadership." Read the statement

Posted by The BIC blogger at 11:34 PM

The Staff Association expresses its impatience with the delay. The impatience of the staff of the World Bank with the long drown out process of the board of directors and their wobbling came to the surface this afternoon.

In a message to all staff, the executive committee of the staff association said:

May 17, 2007

Dear Colleagues,

The staff of the World Bank have waited, patiently and sometimes impatiently, while the Board has conducted its inquiry into matters relating to the President. We have allowed space for due process and time for all of the facts to come out. These facts, as reflected in the Ad Hoc Group's report and Mr. Wolfowitz's responses, are clear. The outcome should not be in doubt.

The World Bank's Staff Rules are its law and their enforcement is the responsibility of the Board of Directors. When staff members violate the law they are entitled to due process. The President has certainly been accorded a lengthy and even elaborate process. On May 12th, he said he would accept the Board's decision, a decision we urge the Board to reach today and the President to accept forthwith.

The next President should be selected based only on merit and qualifications, after full consultation of all shareholders.

Staff Association Executive Committee

Posted by A Washington source at 09:11 PM

Wrong date on the resignation letter! The following is reproduced from the site Wolfowitz Resign. Apparently, Wolfie has drafted his resignation letter with an effective date of mid-June. I guess he needs that bonus of $400K. Chevy Chase und Berlin

Word from the board....

....he's got the wrong date on his resignation letter.

It appears Mr. Wolfowitz has drafted his resignation letter but it has the wrong date. It seems he has dated the resignation letter mid June. Apparently he believes this will give him time for that nasty cloud to shift. The Board is not at all impressed.

"The letter should obviously be dated today, May 17. Can he not even date a letter correctly?" asked one board member in despair.

Robert Bennett, Wolfowitz's lawyer said yesterday that "Mr. Wolfowitz will not resign under this cloud". It's not a cloud, it's a maelstrom.

Word is that the Board is looking at a list of possible acting presidents to take over once Wolfowitz goes. The candidates for filling those shoes, hopefully wearing better socks, include Graeme Wheeler, Lars Thunell, and Vincenzo la Via. Juan Jose Daboub is not on the list. Strange.

Posted by The Beaver at 09:06 PM | Comments (18)

Exoneration for Wolfie's resignation. That's the wish of Wolfowitz but the Bank Board is not giving in, reports WaPo, which continues with:"for another day, the leadership crisis at the World Bank went on with no clear end in sight and much speculation about how and under what circumstances Wolfowitz might eventually depart."

The German and British EDs together with the Canadian ED, who represents his country, the Caribbean and Ireland, have taken the lead to reach a compromise that will avoid a vote for his removal.

Germany and Britain have been strongly pushing for Wolfowitz to resign and it is suprising to see Samy Watson (Canadian ED) in the picture since we know how the Harper Govt has been sitting on the fence for the past month because the neighbour from the White North didn't want to cause trouble with Bush as appropriately described HERE.

I guess Flaherty realized that he won't have to face Paulson when he is at Posdam since Paulson won't be there and Harper would like to have some world recognition @ the upcoming G8 because he is still an unknown even after his first attendance last year.

Posted by The Beaver at 08:35 PM

Wolfowitz, SAIS, CIA, SAIC This item, a rescue from one of our comments threads, calls attention to a White House cover-up of Wolfowitz's ethical lapses (explaining why the WH does not want the Board to confirm the Ad Hoc Committee report) and calls attention to another aspect of the World Bank scandal involving Wolfowitz-Riza-Cleveland and Anwar Ibrahim. The Three Strikes:

Strike One: In late 2000 the administration of Johns Hopkins University had determined to take significant action against Paul Wolfowitz, then Dean of the School of Advanced International Studies (SAIS), for an improper sexual relationship with a SAIS subordinate. University action was interrupted when Wolfowitz informed the University he was leaving to take a position with the Bush Administration.

Strike Two: In early 2001 the Bush Administration was preparing to nominate Wolfowitz to be Director of the CIA. Wolfowitz’s wife, Clare, wrote the President and detailed her husband’s extramarital affairs at SAIS and with Shaha Ali Riza, whom he had met while Dean at SAIS and Riza was at NED (before she joined the Bank as an employee in 1999). Clare pointed out that her husband had a sexual relationship with a non-American citizen and that he was seeking to keep these relationships "non-disclosed." Scooter Libby intercepted Clare’s letter which terminated the CIA appointment but the Administration then nominated him to be DOD Dep Sec. In retaliation, Wolfowitz unleashed his lawyers on his wife and forced her to sign a non-disclosure agreement or forego financial support (also see Wolfowitz’s May 3 rebuttal reference to non-disclosure agreements). Clare Wolfowitz signed. At this point, the White House was fully cognizant of Wolfowitz’s personal habits and chose to cover-up his activities. In other, similar cases, individuals are denied a national security clearance not due to the extramarital activities, but due to the possibility of blackmail stemming from “non-disclosure.” In Wolfowitz’s case, Riza was seen in his company at official Administration events (he was still married).

Strike Three: 2003 (SAIC contract), 2005 (“assignment, not “seconded or detailed” to State Department), 2006 (Foundation for the Future). On the latter, World Bank staff need to focus more carefully on the May 2006 $21,000 World Bank contract and November 2006 speaking contract to Anwar Ibrahim--who informed Robin Cleveland in October 2006 that he was selecting Shaha Ali Riza as Director of the Foundation (while retaining her G-4 tax-free income at an ineligible organization). Ibrahim, close Friend of Wolfowitz, became Chairman of the Foundation in July 2006 after his World Bank contract ended.

Posted by Sameer Dossani at 07:35 PM

What Happened to Wolfowitz the Strategist? Is the question that Steve Clemons is asking today on The Washington Note, his blogspot.

Paul Wolfowitz has all but conceded that he is leaving his perch as CEO of the World Bank. The only question that remains is what gets scribbled in the last paragraph of the story on whether the "blame" for his departure is shared -- and whether he resigned under his own steam or was actually, formally fired.

What is odd about this entire encounter is that "Wolfowitz the strategist" seems to be missing -- and that may have been the problem all along.

I guess he was/is a follower of Sun Tzu whenever there was/is a need to impose the US ' definition of Democracy in the rest of the world (ROW) BUT he never expected to land in an institution for International economic development where his boss is not the US Administration but representatives of shareholders from nations from that R.O.W.

Posted by The Beaver at 06:47 PM

Reuters: Challenges to U.S. Leadership? Reuters has an opinion piece questioning the U.S. control over the appointment of WB presidents.

The article quotes Kenneth Rogoff as saying that "There is growing discomfort with this idea that the United States should hand pick the World Bank president with no consultation."

Author Ivo Daalder adds, "It is a subplot in a much larger novel about Europe versus the U.S. in the Bush era."

Posted by Sameer Dossani at 06:30 PM

Two possible African candidates. The Globe and mail is the first paper to mention two possible African candidates for the presidency of a post- Wolfowitz World Bank.

The article says:

"Some World Bank critics want a more radical leadership change, proposing candidates such as South African Finance Minister Trevor Manuel and Nigeria's former finance minister, Ngozi Okonjo-Iweala."

I am not sure I would call that a radical leadership change, and I am not a World Bank critic by the way. Its more of a credible and smart leadership change. I doubt any of the American names mentioned as possible replacements to Wolfowitz can match someone like Ingozi's experience and record on the key issues of aid to Africa, Anti-Corruption, and the credibility needed to raise the IDA funds. Dr. Ngozi Okonjo-Iweala is now a Distinguished Fellow at the Brookings Institution in Washington DC

Her experience, both as a secretary to the board of executive directors and as a long time bank career member that rose through the ranks to the level of VP, also put her way ahead on both the question of building trust with the staff of the bank and also rebuilding the relationship with the board of directors.

The only questions about her chances have to do with whether the President of the US , who has the power to do this, is smart enough to name the first woman, the first African, and the first non-American as the head of the World Bank?.

Posted by A Washington source at 05:38 PM

Wolfowitz and Bush have same law firm. Lawyers Representing Bush In 2000 Election Case Signed Off On Wolfowitz’s Compensation Package for Riza, according to Think Progress organisation , which referenced a report from Law.com that has the following quote on the law firm Gibson, Dunn & Crutcher, hired by Wolfie to review Riza's "sweet deal" transfer contract:

Documents released by the bank show that Wolfowitz asked Gibson to review the deal in the summer of 2005. A Gibson Dunn team, including Theodore Olson and Eugene Scalia, concluded that the contract was "a reasonable resolution of the perceived underlying conflict of interest." But on Monday a special committee of the bank charged with investigating the scandal concluded that the limited and after-the-fact review by Gibson "is squarely at odds with the high degree of ... concern for the interests of" the World Bank, which is required by the institution's rules. Gibson Dunn declined to comment.

Interesting connections.
It is mentioned by Think Progress that both lawyers, Olson and Scalia are Bush loyalists who defended his administration:
Eugene Scalia: Facing rejection from the Senate, in Jan. 2002, Bush gave Scalia a controversial recess appoint to become solicitor at the Department of Labor. Gibson, Scalia’s law firm, also represented Bush in the 2000 Supreme Court case that gave Bush the presidency. Even though Scalia benefited from the case, his father refused to recuse himself, as federal statute requires.

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

At the time Mr Wolfowitz’s move to the bank was announced, the Pentagon’s inspector general opened a classified investigation into an order by him at the start of the war for Ms Riza to be included in a military contract to go to Iraq.

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."

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 ___

Many thanks for your note and the draft of the letter, which ____ l called me about. I have just had a chance to read the letter.

As I understand from your cover note, the letter is basically final, and I am being asked if I want to sign THIS letter.

The answer is that I do not want to sign THIS letter. I want to explain why.....

My personal assessment of this situation is as follows:

The issue with Shaha:
• It is clear to me that PDW did make a good faith effort to deal with this situation properly.
• It is clear that he hoped that the Ethics Committee would decide it and take it out of his hands.
• It is clear that he was not comfortable when it was turned back to him.
• It is also, in my mind, reasonable that he would not have understood all of the implications of the ways in which the deal was excessive in terms of standard practice at the Bank.
• It is also reasonable, in my mind, that he might have expected to have been told by the VP for HR if the proposal was unreasonable in terms of standard Bank practice. I have seen nothing that suggests that this was done.

The bottom line on this, in my mind, is thus:
1. that PDW made a mistake by dictating the terms of her contract
2. that the culpability of the Board in instructing him to do this, approving it, reviewing it and approving it, was a serious error
3. that HR, by apparently not alerting him to the unreasonableness of the solution and by not refusing to agree to the beyond-the-pale elements, also committed a serious error.
• Her contract showed, in my mind, that he did not make a good decision on an issue which he knew was important. It certainly showed poor judgment. But it was, in my mind, a venal sin on PDW's part, with two at-least-equally-guilty other parties, namely the Board and HR.

The underlying issues:

I believe the underlying issues can be divided in two.

Issue 1 -- Could "the architect of Iraq" ever be accepted by staff? The answer is probably no. I thought (before I ever met PDW) that the Staff Association vote on "do you want him to be President", with 92% voting "no" is evidence of this and evidence of an organized hostility that it would be very difficult to overcome.

Issue 2 -- It was (and is) my belief that PDW could nevertheless have overcome this start by being a good leader and manager. But to my mind he has not lived up to this, on three major counts:

• He needed to bring new blood and new ideas into high levels of Bank management. Instead of finding the world class development leaders who he could have mobilized, he brought with him a few people who knew (and know) nothing about the Bank's business, who did not show any commitment to it, and who treated those who did know and did care and could contribute with disdain. In a substantial number of cases those around him treated our borrowers, too, with disrespect and behaved in ways that are not acceptable for Bank staff. PDW knew that this was the case a long time ago, and he did nothing to change this.
• He needed to articulate a vision for the Bank which would make it the partner which our borrowers need. He did not do this. Instead he waded into the crusade against corruption without a game plan and did not show any willingness to change course as he heard from people who wished him well that this should not be THE mission of the Bank.
• It would appear that the "line of defense" raised by some areas of the media -- "the corrupt officials of the World Bank are rejecting him because he is against corruption" -- has been stimulated by PDW’s media machine. PDW has done nothing to say publicly that this is not his view.

The bottom line is that in his two years as President of the Bank he has not built any capital, either on policy or through people, on which to call when the road got bumpy. This has left him hugely exposed to the inevitable "exposure" (which would have been something else if it had not been Shaha).

All of which brings me to the draft letter which you sent.

I do not like the letter, for several reasons.

First, because it seems to me to add nothing to the substance, but simply looks like "piling on". This is something I did not like in high school, I did not like it in the IEG letter and I do not like it in this letter.

Second, because I think the draft CD letter falls into a trap of making THE issue the contract with Shaha. As I have outlined above, in my mind the evidence on that (as I know it) is that culpability rests at least as much with the Board and HR as it does with PDW. And if we want him to resign over it, then what about the others who are implicated? And if he "beats this rap", then what? Do we, the CDs, then believe that we can go back to doing our business? The answer is obviously "no".

If there were to be a CD letter, then, it seems to me that it needs to be able to meet three tests:
1. does it add anything of substance to what has already been laid out?
2. does it address the real underlying issues (of strategic and human leadership)?
3. does it propose practical measures to be taken should the immediate issue (of Shaha’s contract) be "resolved"?

I believe that the CD letter passes none of these tests.

Finally, let me add a personal note. I had never met PDW before he came to the Bank. From the initial email correspondence I had with him when I was in Delhi, through the subsequent two years, I am left with the following impressions:
1. I thought a President of intelligence, commitment and experience could take the Bank to a higher level. I have been disappointed by his lack of strategic leadership, and the poor quality of most of his personnel and management decisions.
2. I have had explicit personal conversations and exchanges with PDW of emails on virtually all of the issues above (with the exception of Shaha’s contract!). He has always treated those opinions respectfully (although he seldom chose to act in ways that were consistent with my suggestions.)
3. Finally, I have talked with him about personal integrity a number of times and have always been impressed by the high importance he gave this. I believe he has been a poor leader of the Bank, but I do not believe that he is a corrupt person, and I think it is wrong to "hang" him for alleged corruption.


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?


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

May 14, 2007

As World Bank Country Directors we are acutely aware that the Board, management and staff of the Bank face an internal crisis that has damaged our reputation and jeopardizes our effectiveness as a development institution. Bank colleagues working on governance and anti-corruption and in the Independent Evaluation Group have shared their serious concerns, and we echo them. If we do not maintain high standards of integrity ourselves, we cannot speak effectively on the governance issues that lie at the heart of our development mandate.

This crisis goes beyond the governance and anti-corruption agenda and affects our ability to deliver across the entire development spectrum. Our country programs are built on trust, mutual respect and partnership. These assets will be compromised unless this episode is brought to a swift and satisfactory conclusion. If donors are not convinced that the institution and its top officials merit their full support, future IDA funding may be endangered--at great cost to our ability to assist low-income countries, particularly in Africa. The Bank must practice what it preaches on governance and accountability for us to be credible in our partner countries.

These are strong assertions, and we do not make them lightly. They are based on numerous interactions with our clients in recent weeks. In country after country, government counterparts, civil society, international development agencies, the private sector, parliamentarians and the media are waiting to see how the Bank will resolve its problems. We respect our Board's deliberations and see the Bank's commitment to a process that follows sound ethical and governance principles as a major strength. We also look forward to an outcome consistent with the standards we advocate to others, and believe that a credible resolution will enable the Bank to emerge with its reputation enhanced. Failure to act credibly, on the other hand, risks both the reputation and the mission of the institution. We therefore call on the Board and the President to resolve the crisis quickly in a way that demonstrates the Bank's commitment to the highest standards of integrity and accountability.

This message is signed by 37 of the Bank's Country Directors, working in all regions of the world. We refrained from expressing our views while the ad hoc committee of the Board was pursuing its investigation. Now that it has submitted its report, we encourage the Board to act quickly to resolve the issue.


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.

Second Report of the Ad Hoc Group

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.

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.

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.

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

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

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?

Mr. Wolfowitz, who as President should know that something is not right just because an Ethics Committee proposes it; then went on influencing so as to raise the potential cost of this proposal for the Bank to US$2.700.000. For this Wolfowitz should resign; and most seem quite clear about that.

It is hard though for me to understand why there has been so little discussion about the Ethics Committee's initial proposal. Although I was an Executive Director at the World Bank, 2002-2004, I came there from the private sector, and so I might not possess sufficient intimate knowledge of all the nuances of diplomatic affairs… (which could perhaps just be lucky me).

I sincerely believe that the overwhelmingly good staff, management, board members and presidents, present or past of the World Bank, as well as a world that needs a respected multilateral institution where global challenges can be discussed, they all deserve that this affair is handled correctly, on the basis of what is right or wrong, and not just as a banal political row, of a for or against Wolfowitz.

For more on the World Bank saga from Mr Kurowski, see his View from the Radical Middle blog.

Posted by Alex Wilks at 06:06 PM

Mallaby makes it plain: anti-corruption yes, Wolfowitz no. Sebastian Mallaby - former Economist writer and author of a book on previous World Bank president James Wolfensohn - has a clear position in today's Washington Post. In a detailed article he spells out the case for Wolfowitz's departure this week. The Wall Street Journal also has its own prescription for the World Bank's anti-corruption work.

Mallaby argues:

"The World Bank's customers are the poor; and their interests ought to trump the hair-splitting over whether the bank's president, Paul Wolfowitz, overpaid his girlfriend. What matters is that Wolfowitz has lost the confidence of the bank's shareholders, borrowers and staff -- including the support of those who initially welcomed him despite his record on Iraq. He has brought about a collapse in the World Bank's external prestige and internal morale, and he should go quickly".

"The endgame may come this week, at a meeting of the World Bank's board on Wednesday. If Wolfowitz manages to hold on to his job, it will reveal the hypocrisy of the governments to which the bank's board answers".

He knocks down some wrong ideas that have been put about by the Wolfowitz camp. Including that it was the current World Bank president who thought to do something on corruption.

"the biggest misconception about the bank is that it needs the goading force of Wolfowitz to fight graft in poor countries. Even before Wolfowitz arrived in 2005, the bank was trying to plug leaks in government budgets, reform civil services and back new anti-fraud units: From 2000 to 2004 the bank's lending to improve public-sector governance grew 11 percent annually. Wolfowitz's goal was to take these anti-corruption efforts to the next level. The instinct was noble; the implementation horrible".

The bigger question is what level of anti-corruption agenda can the World Bank deal with and implement, given its limited mandate and disfunctional governance.

This is a question tackled by the Wall Street Journal in a feature today. It argues that "anticorruption efforts are here [at the Bank] to stay, and now to some degree institutionalized". Neil King Jr. and Greg Hitt argue that progress is being made on reducing the amount of Bank money lost to graft, including in Kenya. They quote an economist at the Petersen Institute "whoever follows Wolfowitz will have no choice but to keep this anticorruption drive going." I'm sure plenty of people will be sure to let the new president know that anti-corruption begins at home.

Posted by Alex Wilks at 06:00 PM

Washington Post on Wolfowitz's Marital Status Wa Po's Al Kamen has been doing his best to find out whether Wolfowitz is married or divorced (follow link at bottom to go to page 2). Interestingly, Wolfowitz's (current or former) wife, Clare Wolfowitz, refuses to answer questions regarding her (and by implication his) marital status. Also, the Washington Post has this opinion piece by Sebastian Mallaby, who has made a reputation around defending the Bank from attacks by its critics, often using dubious data.

Mallaby argues that the institution is (or should be) doing a good job and that therefore Wolfowitz has to go as he's hindering its chances of doing good. A quote:

Wolfowitz seemed oblivious to research finding that corruption projects often fail; he didn't explain how a greater investment in this field would produce value for money. He brushed off the evidence that corruption is not the overarching blockage to development but merely one blockage among many; some corrupt countries manage to fight poverty effectively. And he mishandled the inevitable recriminations from the World Bank's board. If the bank's president cuts off a country on grounds of corruption, he better be able to show that it was really more corrupt than other places where the bank does business.

The scandal over his girlfriend's pay is the final nail in Wolfowitz's anti-corruption efforts.

Posted by Sameer Dossani at 05:53 PM

A friend in Ouagoudougu, but odds are against him. As judgment day approaches for Wolfowitz in Washington, Reuters and The Nation Nairobi highlight some views from Africa. And while the Wolfie crisis is just one of the Bank's worries, it's a big one. Apparently even Gonzales has more staying power.

Three years ago this week, Wolfowitz faced a different jury and tough Iraq questions. Will he get off as easy this time around?

Posted by Shannon Lawrence at 03:45 PM

Another push for Blair as World Bank president. Tony Blair should have the job. After standing down as British prime minister in late June he should take up the reins of power at the World Bank. This according to Edward Mortimer writing in today's FT. Mortimer weighs some of the arguments for and against but somehow he and the FT's editors fail to mention that this idea was first proposed a month ago by Larry Elliot writing in rival UK paper The Guardian.

Again we urge journalists to check worldbankpresident.org as a matter of due diligence before filing their pieces.

Anyway on Blair Mortimer lists the following pros and cons.

Blair is "still at the height of his powers and is a familiar figure on the world stage. He has also proved, far beyond the call of duty, his affection for the US and his loyalty as an ally".

"For many people - not least in his own country - that loyalty counts against him. Many who objected toMr Wolfowitz's appointment as inappropriate, because of his involvement in advocating and planning the Iraq war, might see giving the job to Mr Blair as a repetition of the same mistake. Yet I suspect this objection would not be pressed hard. Before he went to the bank, Mr Wolfowitz was not well-known for any strong interest in economic development or the welfare of the world's poor. Mr Blair is".

Some colleagues in UK-based NGOs are doubtful that Blair is the man for this job. But they would certainly agree with Mortimer that Blair is a more serious candidate than many of those from the other side of the Atlantic whose names have started to be bandied about.

And with Mortimer's conclusion that: "by making this imaginative proposal, Mr Bush would do something to redeem his own international reputation and take the wind from the sails of his European critics. He would be breaking with a bad tradition, according to which leading international officials are chosen for their nationality".

Posted by Alex Wilks at 12:44 PM

UPDATE:Will the crisis be over before G8 FM meeting? This is what Germany is asking for? According to the Financial Times, Germany "wants the matter settled before the Group of Eight finance ministers meeting on Friday in Potsdam, which Mr Wolfowitz is scheduled to attend."However quite a few scenarios come into play:

1. The Panel is submitting its final report to the full Board tomorrow and, based on the response(s) given by Wolfowitz on Friday, we don't know whether the initial finding that he breached the ethics rules still stands.
"The report is expected to ask the board, in effect, to consider whether Mr Wolfowitz can continue to be effective in his job in the light of its findings."
2. Will the WH go along with the Board's ruling or "will the administration play for time, in a bid both to slow momentum for the bank president’s removal and to open up alternatives."
3. or will the WH play tough because Junior President wants his Wolfie to stick around and "the administration will repeat the tactic it used to get Mr Wolfowitz appointed to the bank in 2005 – going over the heads of hostile board members and development ministries to finance ministry, foreign ministry and head of government level."

FT concludes that "the belief is firming that only the clear threat of a vote against Mr Wolfowitz this week will enable voices within the administration to persuade Mr Bush that Mr Wolfowitz must go"
UPDATE:May 14, 7:30 EST
According to the International Herald Tribune, notes and testimony provided by the VP of HR have weakened Wolfowitz's defense and have become central to the charges Wolfowitz is fighting.
"One of the bank officials who spoke Sunday said that one document appeared to suggest that Coll had told Melkert and Daniño that he was told by Wolfowitz not to tell them about the details of the compensation package for Riza."
In addition,Riza and her lawyers also want this crisis to be over as soon as possible and are putting "pressure" on Wolfowitz.

So it may be "Sayonara" for the president tomorrow after his presentation to the Board unless Cheney (via the WH) and Rove pull another trick to coerce some EDs to keep their boy in his seat.
Asked during an interview in Jordan whether Wolfowitz should remain, Cheney told Fox News television: "I do".

"I think Paul is one of the most faithful public servants I've ever known -- I've worked with him a lot over the years -- I think he's a very good president of the World Bank and I hope he will be able to continue," said Cheney, who was wrapping up a week-long visit to the Middle East.

Posted by The Beaver at 09:58 PM

Modernization or Westernization?. Many in the world see the World Bank as a tool of the West, in general and the US in particular, to Westernize the developing world under the slogan of modernization and development.

The "technical Assistance" of the bank , or as George Will put it: " the euphemism for being required to adopt the social agendas of the rich nations' governments that fund the bank", is the sweetener or bait to get developing countries , especially middle income countries, to apply for loans from the World Bank to fund projects that the private sector may not be willing to finance.

The question however, does modernization mean westernization?. Can non-western countries develop along different paths and according to different social and political tracks than the west? Or must they become westernized to achieve economic and human development?. Could the failures and corruption that plagues world bank projects be a result of this ideological and cultural bias?

Is there one model of development for all? Or can a society be developed, and even modern, but not westernized?

what are your thoughts

Posted by A Washington source at 04:57 PM | Comments (8)

Another Take on the Wolfowitz Mess (UDPATED) from a group of current and retired World Bank staff. They find it hard to imagine what defense PW can put forward in his 11th hour rebuttal, that the Board is now scrutinizing after a meeting Friday that went late into the evening. Let's go over what he might say.

He did not realize there was a conflict of interest:

Hardly credible, given Roberto Danino's testimony and the written evidence of the discussions that PW had with the Ethics Committee and others. He did realize that there was a conflict of interest and offered to recuse himself from personnel decisions but that was rejected by the Board's Ethics Committee so he had to do something else.

Alas, the facts here are pretty clear. Wolfowitz knew he was in a conflict of interest under Bank rules: Danino told that to his lawyers in writing. They proposed recusal with ongoing professional contact as the way to handle it. The Ethics Committee told him, also in writing, that his relationship constituted a de facto conflict of interest under Staff Rules. The Ethics Committee never rejected his recusal from personnel actions. I t rejected his demand to keep ongoing professional contact with SR despite Bank rules. The EC told him recusal was insufficient. By the way, his recusal was also unnecessary because, being in a conflict situation, he was precluded from taking any actions with regard to the other party in conflict. So the conclusion is pretty clear: NOT CREDIBLE

He did not realize that directly negotiating her "settlement/secondment" was a conflict of interest:

Not credible. He already had offered to recuse himself from personnel matters regarding Shaha, so it it not credible the he did not realize that directly negotiating the terms of her arrangement was, de facto and de jure, conflict of interest. Also, his own admission at the Spring Meetings opening press conference (nearly a month ago now) that he "made a mistake" and should have followed his own gut instinct and not been involved in the decisions affecting Shaha is the most damning evidence that he knew it was wrong.

The Bank's rules on this are unclear so in the absence of further instructions from the Ethics Committee he thought he was doing the right thing/acting in good faith:

Well yes maybe but not when you think about it. Sure, the Bank's code of conduct doesn't tell managers exactly what to do when. There is a certain element of common sense. But the principle is clear: if there is a conflict of interest then the manager should not be involved in any decisions affecting the other person. PW was told this from the very beginning.

In the absence of very specific instructions from the Ethics Committee, PW had no one to turn to and had to make the arrangements himself despite the fact that he knew that there was a conflict of interest:

Hold on there! What does he have the Board, MDs, VPs, advisors, etc., for? The bottom line is that he did not trust any of the Bank staff/VP-HR for example, to handle this issue. One can imagine that an unhappy Shaha might have been tough to live with. And Robin certainly was not one who had a keen nose for conflicts of interest, having gotten Secretary Roche to dash off a quick email to a large defense contractor putting in a good word for her job-seeking brother. But that is why this is a case of conflict of interest--the intention of the Bank's policy is precisely to have someone dispassionate/not involved/with no stake in the outcome come up with and negotiate a fair settlement.

He only did what the Bank would likely have done anyway, so there was no real extra cost to the Bank.

Oh my. Let's look at what would have been a fair settlement: Shaha is a 50+ year old woman in the Bank: how many of those get promoted each year? What was the probability of her being promoted? (From G to H to I to J in 10 years, which was the substance of her deal.) It is very likely that she would have stayed where she was for the rest of her career, especially since she did not qualify for a promotion in the communications stream (lack of experience, no specialized degree, lack of knowledge outside the Middle East, etc). There is only one very senior gender specialist in the Bank. Guaranteed outstanding merit increases: well, what have been her past merit raises? Has she been in the top category before? If so, then yes, one might be more optimistic about her chances of getting more than average raises in the future. Every year, though? These are things that could have been looked at objectively by a dispassionate person. He clearly was not: m he was new to the Bank and didn't really understand the Bank's personnel and compensation system so he may have gone overboard but he did it in good faith. And then there's the impact on her pension, virtually doubling it to over $100,000 per year, by some calculations

Sure, and what other mistakes did he make in his first few months at the job? Do we forgive him for those too? If he was not competent enough to understand the Bank's compensation system--or seek out the right advice-- why was he in the job in the first place? Hardly a good defense to say that you didn't know what you were doing, and didn't know who to ask. But how would he, cosseted in his office with his ex-USG and SAIS cronies (Robin Cleveland, Kevin Kellums, Karl Jackson and, soon, Suzanne Rich Folsom--"ethics lawyer" and wife to George Folsom at IRI--and one of his deputies from the Pentagon, Ray DuBois) as well as a Bank staff member who was one of Shaha's former bosses.

End game: PW is damaged goods and he has no credible defense that leaves him in a position to be able to lead the Bank. He is any combination of excessively willful, blinded by his personal relations, stupid and/or incompetent. And, of course, corrupt, as NYU Professor Paul Light argued brilliantly on NPR.

Take your pick.

Posted by Deep Insider at 06:46 AM

Small windows into the World Bank - Updated. Many see the world bank as a closed, almost secret organization working behind a formidable wall of complex bureaucratic rules and procedures . That impression is to a great extend quite true, but in recent years, the multilateral organization has taken some baby steps (or actually been pushed by NGOs) to open some windows to the outside world and move towards more transparency and disclosure.

It is too bad that these steps towards openness don't include the work and debates taking place at the top of the organization, i.e. the board of executive directors. But transparency is a first step towards democracy. So the hope is that as the bank takes more strides towards openness and inclusion, the better the chances to democratize it .

Since there seems to be little news about the Wolfowitz saga this quite week-end, I decided to go surfing on the, complicated and not well organized, World Bank's web site - using keywords like public, documents, information etc - exploring the question of how open is the Bank to the outside World, in terms of both making its work accessible to the public , and how open is it to voices and contributions from the outside to its work and governance structure?.

With that in mind , here are few places I found where people can find more information, data, research results, and even be included in debates about the work of the world bank and have a chance to discuss and question issues of substance with senior officials of the organization:

If you are looking for information and details about World Bank projects, here is a good database of project documents. Unfortunately, the database does not include everything, some of the documents are still not public. But it is a good start.

For Bank research, data, and all kinds of reports and publications relating to the work of the bank , look here and here.

To see video recordings of various seminars and workshops held by different departments of the bank , you can check out the webcasting service of the World Bank, known as B-Span.

The World Bank's public information center , which is strangely called the infoshop, has also been organizing book launches , panel discussions, lectures, and other types of events at the Bank's headquarters . These events, which I was pleasantly surprised to find out , also include outside experts and even critics of the bank, are open to the public and include some voices from academia, think tanks, NGO's, governments, the private setor, and of course , senior World Bank officials

The biggest example of openess of course, is the current Wolfowitz-Shaha affair and the extraordinary public disclosure of information related to it and the position taken by the majority of the staff of the bank.

I'm sure there are many other examples of openness, and probably even more examples of how closed and inaccessible the organization still is. But one thing is for sure, its a far more open place than 10 years ago, thanks to the pressure from NGOs.

It will be nice to have a database of the minutes of the bank's board of directors meetings, or even better; video recording of the meetings themselves. I hope it will not take another decade to get that online.

Posted by A Washington source at 06:18 PM

Wolfowitz has nothing new to report but Bob Bennett seems to think otherwise. Steve Weisman reports in the IHT that Paul Wolfowitz and his unkempt (and expensive) spokesman have "worked up a point-by-point counterattack to the ethics charges against him."

That's what expensive lawyers hired to seize the news cycle do, of course. Bennett is hampered by not being able to leak Wolfowitz's paper, delivered in a flurry of activity to the Board around 6 Friday evening, because it refutes (sic) the ad hoc committee's latest deliverable, which has not been leaked.

(So much for the terrible unfairness his client suffers with the deluge of facts about the "the world apart" of Wolfowitz at the Bank as well as his behavior and that of his venal and incompetent inner circle.)

Maybe Bennett, and even Paul Wolfowitz, have now realized how distasteful US legal theatrics, "trial by spokesman on the sidewalk", is to the Board, to the Bank's owners, and to most Bank staff. Hope remains eternal among staff--that's their business, to help do difficult things in difficult places, after all--but everyone wishes it would end and he would go. Perusal of the Board's chronology of the ad hoc committee's work confirms that HR Vice President Xavier Coll has met several times with the committee, and offered new material. So has Pauline Ramprasad: as HR Manager for the executive offices and INT, she would have seen first hand the Regime's appointment practices and salary demands as they burrowed themselves in, surrounded by cronies from the Bush administration, various Republican bodies, and Shaha's friends. And like Xavier, she is about to retire, so she has nothing to lose by telling the truth.

Talk has now turned to who leaves with Paul Wolfowitz. A long list.

Posted by Deep Insider at 10:59 AM

A busy month at worldbankpresident.org. In the interests of transparency - and because we feel like doing some self-promotion - here are the stats for this blog. In the month since we restarted it - after putting it on ice for two years - there have been 32 million hits and around 90,000 unique visitors. A huge number of journalists are using the site as a source (a priority original aim), and roles have become interestingly reversed. Normally I have to work hard to persuade media outlets to publish my NGO's material. In recent days, however, TV channels, major newspapers and others have been lobbying us to ensure worldbankpresident.org covers their output - and fast.

There was even a funny episode on Thursday when I told the Wall Street Journal I was not going to link to one of their pieces because it was behind their subscription firewall. Within 5 minutes they'd made it open access!

People who like web stats can take a look at the following for themselves.

The growing team of worldbankpresident.org bloggers can be very satisfied with this. Of course the site is just a means to an end, not an objective in itself, but it's nonetheless satisfying that blogpower seems to be playing a part in exercising accountability with regards to a powerful set of individuals in a powerful global institution.

Please do continue to send your invaluable tips and inputs, your encouragement (via e-mail and the comments), and also of course to spread the word re the issue and the site via e-mail, weblinks, etc.

Posted by Alex Wilks at 08:50 AM

More on team Wolfowitz behaviour. I received this from a well-placed named individual. More depressing stories on the actions of Paul Wolfowitz and his team of close supporters in the Bank. Especially two stories about foreign travel while on Bank duty. Make up your own minds on whether they ring true.

Our correspondent, who prefers to remain anonymous, contributed the following. Some of it summarises material seen on this site before, other parts are new:

You may be interested in the following tittle tattle about Paul Wolfowitz and his inner circle team, Robin Cleveland, Kevin Kellems and the good lady from INT, Suzanne Rich Folsom.

A well connected source tells me that:

1. Shortly after Wolfowitz joined the World Bank, British Airways wrote to the Bank to complain about PW’s behaviour when flying first class from London Heathrow to Washington DC. Apparently, PW had spread his personal papers out on the aisle floor and on the adjacent seats. When the flight attendant approached and requested that he keep his papers within his seated area because the other first class passengers were complaining and that he was in breach of BA’s in-flight rules, PW lost his temper; launched into a tirade and verbally abused the attendant. In complaining to the Bank, BA asserted that PW’s behaviour had bordered on “air rage” and that he would be expelled from its frequent flyer’s club.

2. On this or another occasion (I’m not sure whether it was the same trip), Robin Cleveland was travelling with PW from London to DC. While checking-in at the airline counter, Cleveland demanded an upgrade to accompany PW in first class. The check-in clerk politely replied that an upgrade to first class was not possible. Apparently Cleveland would not take “no” for an answer and argued the toss, claiming her status as a senior Bank official. It’s alleged that she flew into a rage and caused an embarrassing scene with her shouts, screams and use of four letter words. Apparently this was all in ear shot of PW who did not intervene to calm the situation. Needless to say, she was not upgraded.

3. One of the alleged factors prompting Kellems’s resignation was that he was aware that senior Bank officials had caught wind of allegations that he had embarrassed himself and brought the Bank’s reputation into disrepute while travelling on overseas missions with PW. The allegations involve his drunkenness at night while staying at hotels, running down corridors knocking on doors and being found lying naked in a drunken state in a stairwell. It is also claimed that he exhibited a fondness for exotic ladies of the night.

4. It is rumoured that Rich Folsom has attempted to close down the Bank’s internal online staff discussion board. Apparently various staff members have been commenting on the merits or demerits of claims in external blogs that she has been conducting an affair with PW. She is apparently outraged by such discussions and has threatened to sue for libel.

5. Apparently PW and Riza are no longer an item and separated quite some time ago. It is claimed that he’s now involved with a blonde lady in her 40s in Germany and that he stayed with her during his last trip to Berlin.

Kellems has gone and surely PW will not be too far behind. I wonder how long the other cronies will remain at the Bank once this fiasco is finally settled.

Name and address supplied.

worldbankpresident.org is publishing these inputs as fair comment on public figures in important positions.

Posted by Alex Wilks at 07:27 AM

One for the weekend: Dr Seuss skit on World Bank affair. A World Bank staff member who can't concentrate on world poverty while their institution is enmeshed leadership dramas has taken the time to pen a new version of a Dr Seuss poem. Titled 'How I Sank the Bank', it adds to the prayer and various songs featured on this site. If it does not help get your kids to sleep this weekend you may want to read it aloud at the start of your next meeting.

How I Sank the Bank
By Anon., After Dr. Seuss

There was graft all around
It was not safe to lend
So I drank all the Scotch
Gave a raise to a friend

I was new to the Bank
I had no help at all
So much to be done
But just who could I call?

I asked for some help
To work on the 12th floor:
“Tell me, how do you feel
About pre-emptive war?”

Then I found the right helpers:
Thing 1 and Thing 2
“You both have no skills
Will 250k do?”

But those Things were no help!
They caused all sorts of pain!
All of my hard work
Went right down the drain!

They yelled at the staff
And put holes in my socks!
They did these bad things
And then leaked it to Fox!

“Thing 1 and Thing 2
You can’t do that, you see?
This is the Bank!
This is not OMB!”

They caused so much trouble
The Board called a halt
I made sure to tell it
“It’s not all my fault”

I said I was sorry
They still asked me to quit
Said I’d got us bogged down
In all kinds of deep ----

“Thing 1 and Thing 2
We must fix this mess now!
Get back in your box
Then I’ll tell you both how”

Now out with you both!
I will mail you to France!
Without those bad Things
I just need a fresh chance

Those two very bad Things
They messed up my reign
But now I will throw them
Right under a train

These moves will help us
Get more IDA funds
From the Brits and the Danes
And the Frogs and the Huns

That Ad Hoc Report
It was just so unfair!
And Thing 2 even ran off
With the comb for my hair!

The Current Situation
Oh, I like it a lot
But tell me George Bush
What else have you got?

Another song from a WB staffer is the following:

Paul, You're so vain

Sung to "You're so vain" by Carly Simon

You walked into the Presidency
like you were walking into Bagdad
Your contract strategically written
to breach Bank norms
Your signature issue anti-corruption

You had one eye on opportunity
as you replaced old Bank hands with cronies
And all the Republicans dreamed
that they'd get a Bank job through you
They be your employee, and they'd work for you

You are so vain, you probably think this song is about you
Your so vain, I'll bet you think this song is about you
Don't you? Don't you?

You had us several years ago, when we were quite naive
Well you said we made such a good pair, like McNamara
And you told us you would end corruption

But you gave away the things you loved
and one of them was the Bank's credibility
We had some dreams, they were credibility with you
Credibility with you, and....

Well we hear you went up to Henry Paulson
and his ED naturally obeyed
Then you took Cleveland and Palacio to the ED meeting
To hear what we say about you

Well you are where you should be all the time
And when you are not, you are with
Some neo-con flunkies, or Shaha Riza
Trying to remake the Bank, Trying to loot the bank... and....

You're so vain!
You probably think this song is about you!

Posted by Alex Wilks at 07:16 AM

Crucial info missing in Post defence of Wolfowitz. David Corn has published a thoughtful piece questioning aspects of a Wolfowitz endorsement published this week in the Washington Post.

The piece, by Andrew Young, the former civil rights leader and onetime US ambassador to the United Nations. Young had the following plea: "we offer Paul Wolfowitz the same chance to learn from the misjudgments of the past and move on together to construct a more just, prosperous and nonviolent world". What Corn complains about is that Young is and has been a paid D.C. lobbyist for various African governments, a fact that neither he nor the Post saw fit to disclose. The governments concerned are Nigeria, Rwanda and Tanzania.

Posted by Alex Wilks at 05:35 AM

Respectful Debate thread Ok, so there is some demand to politely and respectfully discuss the finer points of free market theory. Let's give it a try...

Lycanthropologist wrote Sameer:
There is a lot of value in infrastructure, electricity, water supply, telecom, roads. There is even some value on structural adjustment lending if it allows to reduce subsidies and rent seeking and get close to some form of "efficiency" prices and prevent domestic and external inbalances. There are many examples of the success of these forms of lending. Even balance of payments loans were helpful to get countries out from the crises of the 80's and 90's.

I even dare to say that these institutions have done more good than harm. As agents of modernization and sources of capital and knowledge they have played a critical role. Even the efforts done to improve governance have some measurable results. All these institutions have done work on justifying their existence and there are empirical studies to evaluate the benefits (and costs) of aid and development financing.

Again, I can only refer you to your own reports. This report accuses the Bank of market fundamentalism and selective use of case studies in its research departments, to prove claims like those you make. This recent IMF report does the same thing with regard to sub Saharan Africa IMF programs. Economist Ha Joon Chang's Kicking Away the Ladder (and see book by same name) shows how developed countries have followed exactly the opposite of policies recommended by the IMF and World Bank, and the thorough research by friends at the Center for Economic and Policy Research shows how these policies have led to 25 years of diminished development.

Anecdotally, when I give talks even at conservative universities these days, I find it very hard to find anyone willing to support the economic status quo that is still represented in World Bank policies. I think the rest of the world is moving away from free market fundamentalism... At a macro level, the Bank has few supporters. The numbers simply do not look good.

Posted by Sameer Dossani at 04:08 AM | Comments (7)

More details on how a vote may look like. Citing board sources, a new Reuters report says "World Bank board majority want Wolfowitz to resign".

Here is some key passages from the news report:

"It is now very clear that a majority of members think Mr. Wolfowitz must resign," said one board source from a developing country, which received instructions from its capital this week not to support Wolfowitz's continued leadership.

"We believe that the World Bank cannot continue under the leadership of Mr. Wolfowitz," the source told Reuters.

Asked how many member countries thought Wolfowitz should resign, the source told Reuters: "More than 50 percent."

Board sources said Canada and Japan would support the United States in its backing for Wolfowitz together with countries in Africa, where Wolfowitz has focused much of his attention.

The sources said Europe's push for Wolfowitz to resign was supported by Brazil, South Korea, India, Russia, Argentina, Saudi Arabia and Kuwait.

Exactly where China, Malaysia, Pakistan and Mexico stood remained unclear.

Posted by A Washington source at 11:52 PM

Brookings Institution sign-on calls for leadership selection reform. Influential DC-based policy thinktank, the Brookings Institution, has called for the Americans and the Europeans to give up their stranglehold on the selection process for the heads of the World Bank and the IMF. Read the letter and send your support!

Leadership selection reform at the World Bank and the IMF

The leadership crisis at the World Bank is undermining not only the World Bank but potentially the International Monetary Fund. The world's nations -- not least the United States – have a vital interest in promoting the goals and sound management of these international institutions.

Paul Wolfowitz's problems at the World Bank stem in part from a widespread perception that he disproportionately represents U.S. interests rather than objectives that command a global consensus. The root cause of that perception is an informal convention, established in the 1940s, that the U.S. government designates the president of the World Bank while European governments designate the IMF's managing director.

In today's world, that 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. With such selection procedures, the heads of the institutions would be seen as representing the international community as a whole, not a single country or region. If the outdated convention is not abandoned, the leadership crisis at the World Bank is unlikely to be fully resolved even if Paul Wolfowitz decides to resign.

We therefore call for timely adoption of reform of the selection procedures at both institutions. We recommend as an initial constructive step that European governments and the U.S. administration publicly state that the 1940s convention should be jettisoned and commit themselves now to reformed selection procedures whenever new leadership choices have to be made for either the World Bank or the IMF.

Please send signatures to Patrick Liddiard at pliddiard@brookings.edu by 3:00 PM today (DC time), or latest by 3:00 PM on Monday 14 May.

Posted by Jeff Powell at 06:15 PM

More questions about Riza's secondment. Strange things about Riza's time at SAIC, State and the Foundation for the Future.

Strange things at SAIC

Strange things about Shaha Riza's time with US defence contractor SAIC in 2003 - she took a leave from the Bank and forfeited her Bank salary. Sources have suggested that she could have called what SAIC paid her 'expenses'. She told her supervisor at the Bank that she was going on a trip to the Middle East as a 'volunteer' (US Army Corps girl scout?).

Consequently, she's in violation of Bank regulations on outside interests / employment and her G-4 visa status (under a G-4 visa, foreign nationals are not allowed to work for anyone other than their specified employer - in this case the Bank). She may also be in violation of US tax law. G-4s don't pay US taxes. But she should have paid taxes on whatever she received from SAIC.

Stranger things at State

Stranger things about Riza's secondment to the US State Department two years later - apparently it was not sorted out at State. US NGO Goverment Accountability Project did a press release on 26 April about this, but so far, no resolution.

If you look at the documents that Wolfowitz released to the board about the secondment (the 102 pages), there's a letter from Scott Carpenter dated 5 October 2005. In it he says: "For our part, I would like to take this opportunity to note that we do not view Ms. Riza as detailed or seconded to the US government." After that, the trail goes cold.

It looks like Elizabeth Cheney and Wolfowitz cooked up the arrangement with Riza, and at the last minute State's lawyers looked at it and said 'no'. Probably because of tax or visa problems, US appropriations law regarding funding contributions for State, security clearance problems, or some combination of these things.

In the papers released by Wolfowitz, however, there's no more about this after the 5 October letter from Carpenter. And we know that Riza went to State. So the question becomes: did Wolfowitz & Co. simply ignore the legal problems? If Riza remained an un-seconded Bank employee 'assigned' to State, then Wolfowitz and Riza avoided the G-4 problem. In that case, though, Wolfowitz did not actually comply with what the Ethics Committee instructed him to do - move Riza out of his jurisdiction.

As a result, however, Riza then has no supervisor, no evaluations, no reviews, no one to whom she reports.

Stranger things still at the Foundation for the Future

Then in 2006, Riza goes to the Foundation for the Future (FFF), which is not a G-4-listed NGO (sometimes international foundations have this status).

David Corn, of The Nation, had this to say about FFF:

The foundation, which is not a US government entity, has received a $35 million funding commitment from the United States and about $20 million in pledges from other governments [Channel 4 News in the UK reports that $1 million was received from the British government]. The board includes prominent citizens of Muslim nations. Former Supreme Court Justice Sandra Day O'Connor is the only American on the board.

The foundation has not gotten off to a big start. It has yet to provide a single grant. Its first president, Bakhtiar Amin, an Iraqi who served as a minister in the first interim government set up following the invasion of Iraq, left the post after a short time in the job. "He was not up to the task," says a source who has worked with the foundation. No replacement has yet been selected. The group also does not have a chief financial officer or a chief operations officer at this time. Last year, it decided to open its main Middle East office in Beirut - right
before the war in Lebanon. It has no permanent office in Washington. Email requests for information on its activities have gone unanswered. Its website lists no phone number. But Ahmad, the adviser to Anwar, says the foundation will soon begin awarding grants, perhaps in the beginning of June. Riza, he says, has continued to handle the day-to-day operations of the foundation.
[This despite earlier reports that Riza is rarely in the office, serving 'more as a consultant'...hmmm, how very strange!].

Corn is less worried about the legitimacy of the FFF, than about the ethics of the deal Riza received: "Thanks to her boyfriend, Shaha Riza, after receiving a hefty pay raise, could serve as an adviser to a barely-functioning foundation she helped create, working with a friend of her romantic partner, and pull in $200,000 to $400,000 annually over the next ten years. And then she could retire with a $110,000 per year pension. This is quite a deal for the average
foundation aide in Washington."

Then there are the same questions about Riza's G-4 status and taxes paid on her income from FFF.

Another curious fact - apparently the WB gave a $21,000 contract to Anwar Ibrahim (currently president of the Foundation for the Future) from Jan 25 to May 1 2006 to "enhance demand for good governance." Sources at the Bank, so far, cannot find any report or 'deliverable'. Strange indeed!

Any more information on any of these leads?

Posted by Jeff Powell at 05:24 PM | Comments (15)

Wolfowitz Slovenia trip has corruption focus The Wolfowitz Resign bloggers have a nice piece pointing out the irony of World Bank President Paul Wolfowitz traveling to Slovenia next week to present an award for an essay competition on corruption. They comment: "we assume this means he is leaving his fine sense of irony at home".

I'm in a position to add that at least some versions of the invitation for another European event Wolfowitz will attend in the coming days failed to mention his name. The invites to the German World Bank Forum - circulated in late April - coyly only said "the World Bank president" would attend.

Some Europe-based World Bank staff are evidently very uncomfortable with the situation they find themselves in. As we recorded last week's education conference in Brussels was a major missed opportunity because Wolfowitz's presence diverted all attention to the drama at the top of the Bank.

Luckily, however, we should be in the last few days of such a situation. That ticket to Slovenia will almost certainly have to be cancelled.

In the unlikely event that Paul Wolfowitz finds a way to hang on till then, this site will bring you full coverage of the corruption essay prize handover: one of our intrepid bloggers plans to be there.

Posted by Alex Wilks at 04:45 PM

Hilary Benn's fighting words. Will the UK live up to them? In response to written questions from British Liberal Democrat MP Lynne Featherstone, UK secretary of state for international development Hilary Benn has said that "picking the heads of the World Bank and the IMF based on nationality should end".

The full transcript from the 8 May questions, for which responses were just posted on the hansard:

Lynne Featherstone: To ask the Secretary of State for International Development what recent representations he has received on the selection process for the position of President of the World Bank. [135706]

Hilary Benn: In the past month DFID has received representations from a number of civil society organisations calling for a comprehensive reform of the selection process for the position of the president of the World Bank. The UK has a long-standing commitment to support developing country calls for a stronger say at the World Bank. As last year's UK White Paper on International Development makes clear, the practice of picking the heads of the World Bank and the IMF based on nationality should end and both presidents should be chosen on merit.

Lynne Featherstone: To ask the Secretary of State for International Development if the Government will make it its policy to establish an open and merit-based selection process for the President of the World Bank. [135745]

Hilary Benn: The UK has a long-standing commitment to support developing country calls for a stronger say at the World Bank. As last year’s UK White Paper on International Development makes clear, the practice of picking the heads of the World Bank and the IMF based on nationality should end and both presidents should be chosen on merit.

Note Benn pointing to the heat that he is feeling from UK civil society groups over this. We can only hope that his convictions are as strong as his words. Colleagues in other European countries need to re-double their efforts on this front. Worrying signs that the Germans are crumbling - allowing the Americans to maintain their stranglehold over the Bank.

Posted by Jeff Powell at 01:07 PM

Look for a Wolfowitz resignation in the next few days. I have no particular information to confirm this, but my years of experience in Washington tell me an outline of a deal has been reached. Wolfowitz has lost , the Bush administration has now finally realized he can no longer be saved.

The US has more of an interest now in not pressing for a vote on the board of directors than Europe. The US knows if they press for a vote, they will not only lose, but may end up losing the power to name the next president of the bank and see US global leadership status diminish considerably. (By way of background read this New York Time report)

If the US wins a less than out right vote to fire Wolfowitz by the board, they will only manage to end up with a disgraced, and the lamest of all lame ducks as head of the bank. The potential loss on the other hand is enormous politically for the administration, the republican party, and the country as a whole. Its a fight that only the most reckless of administrations will insist on having

My bet is that Wolfowitz will most likely resign by Tuesday, that's when he is scheduled to appear before the board of directors - and most probably before.

Here is your chance to put in your own bet

Posted by A Washington source at 04:56 AM | Comments (30)

Samy Watson is getting tired of being a silent defender of Paul Wolfowitz The Canadian Executive Director is being deluged with emails from irate Canadian staff at the Bank. Why: The US press continues to report that Canada is siding with the George Bush and Dick Cheney to keep Paul Wolfowitz, his girlfriend and his cronies at the top of the Bank. Not a peep from Ottawa, although Finance Minister Flaherty has backed off his pre-Spring Meetings statement that "Paul Wolfowitz told me what he did for his girlfriend, and that's OK with me." Dangerous words when hurled at you at a campaign meeting during a lovely Canadian fall election, along with "why did you support a man who gave his girlfriend a $60,000 raise?"

An email campaign has taken hold, and a group of Canadian staff are preparing a mass letter to sign. This would complement individual letters, at least one of which was copied to Canadian Prime Minister Stephen Harper and has found its way to the CBC.

Mr. Watson, who replaced the distinguished Canadian civil servant and diplomat, Marcel Masse, last September as ED for Canada, Ireland and the Caribbean, has a PhD in leadership (sic) from Andrews University in nearby Michigan. According to its website, "Andrews University has placed serious scholarship, quality research and a strong focus on practical Christianity first on the list of things we think are important about attendance at a Christian university." Its code of academic integrity says "The University is committed to principles of trust, accountability, clear expectations and consequences. It is also committed to redemptive efforts, which are meaningful only in light of these principles." Not entirely clear from his career history hopping around the Canadian civil service just when he met the residence requirements (four semesters) for the PhD.

But Watson's educational background may not be the sole predictor of future performance ensuring good corporate governance at an international financial institution Embassy ("Canada's Foreign Policy Newsletter") reports that "The jury is still out on exactly how the change at the top of the bureaucracy at Environment Canada will play out the world stage, but the removal of Samy Watson as deputy minister -- he is now awaiting a new assignment -- can only add to the concerns of those nations that support the Kyoto Accord. Apparently Prime Minister Stephen Harper found Mr. Watson too deeply embedded in the former Liberal government's way of thinking, and a little to adamant in his opinions."

No word on how he gets on with the World Bank's resident climate change denier, Juan-Jose Daboub. Although he has not yet met with any long-serving Canadian staff since his arrival last fall, and has not returned phone calls about The Current Situation, rumours from Ottawa describe his style as "Robinesque": not a good sign this week at the Bank.

Posted by Deep Insider at 03:50 AM

Free flow of the Conservative Kool-Aid It is sad to realize that the actions of Wolfowitz are still considered proper."I do not believe that Wolfowitz did anything wrong at the World Bank" said Dan Goure, a defense analyst, on NPR "All Things Considered"

However, he does agree that Wolfowitz" held himself in such high regard that he simply assumed others should too." and considers that" What he wanted to do at the World Bank was laudable"
I will leave that to his own assessment on the performance of a "government man" who does not have international development experience let alone a banking one.

Adam S. Posen said it beautifully in an interview with Jason Notte at Metro Boston :
"he never used his White House connections that we know of to draw attention to the poverty issue. The Bush administration, for all of its other evils, has actually been pretty good on the global poverty issue, but Wolfowitz hasn’t made it better. He didn’t really galvanize things, and instead went off on this anticorruption issues — which has legitimacy, but is hardly a first-order goal. It’s pretty much a substantive dis-appointment on all fronts."

All in all Wolfowitz didn't raise to the expectations of his Neo-Con friend who, by the way, believes that "Even what he tried to do in Iraq, protecting America from the potential threat of terrorism and bringing democracy to the Iraqi people, was commendable: His mistake was thinking that good intentions count for anything.". EEK!!!!!
ADDITION: A reader has sent in the following snippet with respect to Dan Goure:
Goure is actually, according to the article, the VP of the Lexington Institute, an Arlington, Virginia, think tank." The report did not mention that the Lexington Institute is an organization that "believes in limiting the role of the federal government to those functions explicitly stated or implicitly defined by the Constitution,".
Note: Thank you and now we can connect the dots................

Posted by The Beaver at 01:13 AM

Meltzer Commission Back In Style The nice thing about the current scandal is that its putting a spotlight on the World Bank. Journalists who do not want to defend the indefensible or state the obvious are opting to give us some substance. Washington Post syndicated columnist and right leaning George Will brings up all the Meltzer Commission talking points in his latest column which argues for the elimination of the Bank.

As those who followed the Bank in the 90s will remember, Allan Meltzer chaired the commission, and much of the work of the report was done by Adam Lerrick. Both get quoted in Will's column. The report argued that the World Bank in its present form is essentially a market distorting mechanism which provides perverse incentives for governments to borrow from the Bank rather than from private capital markets. It recommended that the Bank be converted into a small grant-making institution for the poorest of countries who have little access to private capital. Funny how the right and the left can agree from time to time.

When Wolfowitz came on board in 2005, many of us assumed that he would have a copy of the Meltzer commission on hand and begin implementing its proposals. So far, there have been no moves in that direction that I can see. But maybe his departure will open that door again.

Posted by Sameer Dossani at 09:23 PM | Comments (20)

Riza's spinmeisters?UPDATED Looks like some Washington Post journalists are being given carte blanche to empathize with Riza. Reading the following piece on Page C01 of today's Washington Post, I couldn't help myself sorting out the errors:

1. Born in Saudi Arabia (I thought it was Libya or Tunisia)
2. When Wolfowitz became bank president in 2005, she was required to leave her position as a communications specialist and she went to the Foundation for the Future. ( She was seconded to the State Department according to Wolfowitz which they referred to only on page 3)
3.Few details about Riza's youth or family are publicly known, but acquaintances say she grew up in Libya ( wrong again- grew up in KSA)

As far as the Turkish journalist Cengiz Candar the following is an edifying piece on PW and a secretive society.

Seems to me that this article was written in a hurry to portrait the positive side of Riza since she knows that she is in big trouble for diregarding the directives of the WB requesting staff not work in an OCCUPIED country (Iraq) in 2003 ( see HERE) . Is it going, going, gone?

UPDATE:May 12 @ 16:20 EST
Riza must realise that she is "toast". Now another defender has written a letter to WaPo ( Washington Post ) again "to put in a good word for Shaha Ali Riza, especially in the midst of what seems to be an unfair and vicious campaign against her." Meh! The author "one longtime colleague, leading Palestinian peace activist and philosopher Sari Nusseibeh", wrote this open letter on her behalf.
Irony oh Irony! another compliment :"Her uppermost concern was ensuring that there was no malpractice -- no financing that was going to the wrong people or organizations."
The best conclusion:"I don't believe that the World Bank or the State Department could find a person more devoted to their work in this part of the world than Shaha. Nor, I believe, could underprivileged people from this region hope for a more sympathetic ear in Washington."
Well let's see if the Iraqi families who for the past 4 years are living in Hell on Earth will consider her as a devoted person to their cause.

Posted by The Beaver at 04:16 PM

Avaaz gives voice to the outrage that Paul Wolfowitz is still President of the World Bank. Their colorful and well-organized demonstration in front of World Bank HQ on Wednesday attracted a small group of staffers. Their video shows that

standing along side Bank uniformed security were at least two INT staff members. One, looking quite fearsome and muscular, appears to be the stressed-out investigator who cussed out a perfect stranger in the cafeteria for the 'unamerican' act of wearing a blue ribbon. The other, in lobbyist wear, looks like one of Suzanne Fulsom's PR colleagues, brought with her from EXT to put out INT's message. Neither appears to have a camera as they stand, shoulder-to-shoulder, with Bank security guards.

One wonders why INT is not keeping a lower profile in The Current Situation. Their time might be better spent back at their desks finishing the report on Congo that has taken a surprising length of time to issue. Unless, of course, coming clean about how bad public financial management in Congo is might scare off the donors Paul Wolfowitz would like to join the Bank in ensuring the stability of that oil- and resource-rich country. Robin Cleveland has been to Kinshasa twice already in 2007.

Footnote on the protest and the handing over of Avaaz's petition callling for Paul Wolfowitz to leave: Miscommunication on both sides meant that the Bank initially didn't have someone there to receive a printout of what the organization had agreed would be sent electronically, but that the demonstrators had brought along in hard copy. Rest assured that the Bank's well-mannered civil society team received the paper version, thanked the representatives of global public opinion for coming along, and made sure the long list of signatories made its way to the right Board hands.

Posted by Deep Insider at 03:50 PM

The board establishes the record of a fair process. The board of executive directors issued the following statement to explain why it is taking too long to resolve the crisis "expeditiously" !.

The announcement includes a detailed chronology of events, just to make sure that Wolfowitz can't blame them for not giving him a fair hearing. Here is the statement in full:

Communication from the Executive Directors
May 9, 2007


Washington, May 9, 2007 - The Executive Directors met today to consider a request from the President for additional time to comment on the draft report of the ad hoc group, which was provided to him on May 6. They have informed the President that they agree with the recommendation of the group to extend the period for his final comments on the group’s draft report to the close of business on May 11. After considering the President’s comments, the group will complete its report.

The Executive Directors have informed the President that he will have an opportunity to meet them on Tuesday afternoon, May 15, to communicate his views in person, if he wishes to do so. They will then consider all the information available and reach their decisions.

The report being prepared by the ad hoc group will permit an effective and orderly resolution of the matter, following fair process and careful deliberation. The Executive Directors are releasing a chronology of key events of the process as background.


This document sets forth the chronology of key events starting April 9, 2007, when the Ad Hoc Group (AHG) of Executive Directors commenced its work to acquire information related to the present matter.

April 9, 2007

At his request, Mr. Wolfowitz met with the AHG to present his views.
Mr. Wolfowitz gave the AHG 25 documents (the “President’s Papers”) including a written statement from Ms. Riza.
The AHG also met with Ms. Palacio and Messrs. Coll, Danino and Canuto.

April 10, 2007

The AHG met with Mr. Melkert by videoconference.

April 11, 2007

The AHG had a further meeting with Mr. Wolfowitz and a further meeting with Mr. Coll.
The AHG gave Mr. Wolfowitz for comment the draft of its April 11 report prior to dissemination to the Executive Directors.

April 12, 2007

At his request, Mr. Wolfowitz met with the Executive Directors to discuss the matter.
The Board met to consider the report of the AHG and, with the consent of Mr. Wolfowitz and others, made the documentation collected as of that date publicly available.
The documents made public on April 12 were: (1) the April 11 AHG Report; (2) the President’s Papers; and (3) the Record of Ethics Committee Deliberations on Case No. 2 (“EC Record”).

April 14, 2007

Mr. Wolfowitz released a document with direct quotes from the documents previously released on April 12 to call attention to a number of those documents.

April 19, 2007

The Executive Directors met and issued overnight a communication (dated April 20) requesting the AHG,

“…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.”

April 20, 2007

Mr. Wolfowitz issued a statement in response to the April 20 communication from the Executive Directors, as follows:

“President Paul Wolfowitz welcomes the decision of the Board to move forward and resolve this very important issue. He looks forward to implementing the recommendations of the Board.”

April 24, 2007

The AHG invited Mr. Wolfowitz to meet with the AHG on April 25 and present his views.

April 25, 2007

Mr. Wolfowitz declined to meet with the AHG, but proposed instead to meet with the AHG the following week after he had had the time to prepare properly.
The AHG agreed that they would meet Mr. Wolfowitz the following week on April 30.
The AHG interviewed Mr. Coll on the record.

April 30, 2007

The AHG interviewed Mr. Wolfowitz on the record. Mr. Wolfowitz read an opening statement.
Mr. Wolfowitz submitted to the AHG a narrative and 21 documents, most of which were included in the President’s Papers previously submitted by the President to the AHG (April 9).
The AHG interviewed Ms. Cleveland and Ms. Riza on the record. Ms. Riza read an opening statement into the record.
The AHG interviewed Mr. Roberto Danino on the record. He also read an opening statement that was publicly available the day of his interview.

May 1, 2007

The AHG interviewed Messrs. Melkert and Canuto on the record. Mr. Melkert read an opening statement that was publicly available the day of his interview.
The AHG interviewed Ms. Ramprasad, Human Resources Manager, on the record.
The AHG again interviewed Mr. Coll, on the record.

May 2, 2007

Mr. Wolfowitz submitted to the AHG a written response to the statements of Mr. Melkert and Mr. Danino (made on April 30 and May 1, respectively).

May 6, 2007

The AHG delivered a draft report to Mr. Wolfowitz in the evening, with the following attachments: (i) the April 11, 2007 AHG Report; (ii) the President’s Papers; (iii) the EC Record; (iv) a written statement by Mr. Coll, with eight documents attached; and (v) transcripts of the eight interviews conducted on April 25, April 30 and May 1.
The AHG asked for Mr. Wolfowitz’s comments by the close of business on May 8.

May 7, 2007

Mr. Wolfowitz requested additional time to no later than May 14, 2007, to prepare his comments on the AHG report.
The AHG granted Mr. Wolfowitz an additional day, until the close-of-business on May 9.

May 8, 2007

The President reiterated his request for more time to respond.

May 9, 2007

The Executive Directors met and issued a communication, including their agreement to extend until the close of business on May 11, the period for Mr. Wolfowitz’s final comments on the AHG’s draft report

Posted by A Washington source at 01:00 PM

Generalissimo Franco Holds On The deathwatch continues. The Board has given Paul Wolfowitz yet another two days to respond to what everyone already knows. He broke the rules, his associates helped him, and he tried to cover up his actions.

For all the protestations of leaks, the only ones seem to come from PW and his noisy spokesman, Bob Bennett. Bennett, having adopted a more conciliatory tone in his latest "terribly unfair" complaint that got Wolfowitz an undeserved reprieve, seems to have limited this leak to the Wall Street Journal, where on Wednesday some other-earthly invective graced its op-ed pages. Other journalists are circling the Bank hoping for something to enrich their own weekend reporting. The op-ed and opinion pieces are all lined up for the Sunday editions.

Generalissimo Franco holds on! The paralysis continues as people wait for the regime to end.

Posted by Deep Insider at 10:35 AM

More Iraq parallels: will Wolfowitz ever learn? Some further insights into attempts by team Wolfowitz to control public messages at the time of the Iraq war. And into the role of contractor SAIC, where Shaha Riza did her Iraq stint. One thing the Defense Department failed to consider properly when planning its "New Iraq strategic information campaign" was that bloggers, independent journalists and others would frustrate the attempts to monopolize information flows. This is all exposed in documents just obtained by the National Security Archive.

Using Freedom of Information Act requests the National Security Archive has obtained and posted new documents relating to US government Iraq war planning. They set out how certain contractors (including SAIC), got rich trying to spread messages in post-war Iraq. The NSA is scathing about SAIC: "March 11, 2003 - The Defense Department gives SAIC a $15 million sole-source contract for the 'Iraqi Free Media' project. Though the company has worked extensively with U.S. Special Forces, it has no media experience". (Sole-source contract means no competitive bidding).

As for the New Iraq media strategy. The NSA records "As Pentagon planners saw it, the themes of the 'strategic information campaign' were to be crimes of the old regime, and a bright new day". Now of course Wolfowitz - in a key Pentagon position during Iraq war planning, is trying to emphasise that there are no crimes carried out by the current regime, and no need for a new day.

Now, just as with the Iraq war, Wolfowitz, his (same) advisers and his (new) lawyers are struggling to contain information flow.

The parallels will be obvious to anyone reading the National Security Archive piece:
"Unfortunately for the architects of the war, however, the world has found uncontrolled media to view Iraq's actual post-invasion reality -- Abu Ghraib, IED's, chlorine bombs, sabotage, disappearances, torture, botched executions, a dysfunctional legal system, a collapsed civil infrastructure, massive casualties, and an exodus numbering 2 million refugees, for whom American humanitarian aid has been effectively nonexistent -- all overseen from the USG's privileged enclave in the Green Zone".

"The 21st century universe of alternative media, freelancers, cell phones, video uploads, bloggers, and satellite news outlets was not, evidently, anticipated by the Pentagon, and is well beyond its control".

Thanks to all our readers inside, around and far from the World Bank who have helped make this so.

Posted by Alex Wilks at 10:27 AM

Former Indian official spells it out. A good piece on the BBC World Service just now features comments from their economics correspondent and from a former senior Indian official. Andrew Walker, the correspondent, seems unsure how this will play out on the Bank's board but took time to remind listeners that the process is deeply political.

The former Indian Secretary for Economic Affairs (Amani Sana - sp?), who spent a couple of years as his government's representative on the World Bank's board, said the Wolfowitz misdemeanours are just the "tip of the iceberg - much deeper problems plague the institution". He complained about the World Bank's tendency to push particular policy conditions on developing countries, said they lack a coherent strategy on the Millennium Development Goals and that developing countries have "too little voice" in the institutions.

It is certainly the case that they have almost no voice in the current debates on what to do with the World Bank president.

You can listen on-line to the BBC World Service Business Report.

Posted by Alex Wilks at 08:55 AM

He's doing a great job. For the US state department. The NY Times reports that US secretary of state Condoleezza Rice has been busy pounding the phones over the past weeks in support of her pal Paul. "She has spoken with several European foreign ministers about her positive impressions of Paul and the job he's doing at the World Bank," said Sean McCormack, state department spokesman. Fortunate for Paul that there isn't much else going on in the world at the moment - say in the Middle East - to distract the secretary of state from the more important business of defending Bush cronies.

Posted by Jeff Powell at 08:22 AM

Odds shorten on Paul Wolfowitz leaving. A Village Voice piece has some nice praise for us and an update on the web trading on whether Wolfowitz will resign. Staff at the World Bank - who excel at presenting numbers - will enjoy the chart below showing how Wolfowitz's stock has fallen in recent days. The numbers will concern the White House and US Treasury, however, who have clearly missed their best negotiating opportunity - their man is not just on the slide, he's on his back.

alt="Price for Paul Wolfowitz Resignation at intrade.com"
title="Price for Paul Wolfowitz Resignation at intrade.com" border="0">

As Ward Harkavy puts it: "the action on intrade.com is no spoof. And things are jumping. Capitalism can be so much fun".

He advises punters to check this site before putting their money down. I'd like to make clear that you part with your money at your own risk. But the pre-June 30th resignation looks a safe enough option right now.

Posted by Alex Wilks at 08:20 AM

New doubts about Wolfowitz corruption strategy. Jeff posted a wry piece yesterday on Congo supporting the World Bank's anti-corruption drive. The Financial Times has a story about the other Congo (Democratic Republic of), which casts doubts on Wolfowitz's anti-corruption strategy at the Bank.

There have long been concerns that Wolfowitz is applying his anti-corruption agenda selectively. Now it emerges that a Bank report has been kept on hold since last autumn, apparently for fear of offending the government. At first the problem was the election in DRC. Now it is said that the report is being held back to avoid Mr Wolfowitz losing the personal support of senior Congolese government officials" in his campaign to hang on at the Bank.

This is said to be causing "considerable frustration" in the Bank's Africa team.

Posted by Alex Wilks at 06:37 AM

The Nail in the Coffin? Ok, I think with the latest leak, this time from the Pentagon, Wolfowitz and Riza are down for the count. The FT is reporting that Wolfowitz told Pentagon investigators that he obtained the help of a World Bank staffer with whom he "had a close personal relationship" in "activity supporting the war".

While it has been known for sometime that Riza went to Iraq in 2003 without informing the proper World Bank channels to do some work for the Pentagon/State Department, this is clear evidence indicating that Wolfowitz himself was behind the potential conflict of interest. As the FT story indicates, I doubt that the Board will look favorably on these new developments.

Those wanting to see some of the memos and people involved should watch the Channel 4 news piece mentioned here yesterday.

Posted by Sameer Dossani at 04:27 AM | Comments (10)

Wolfowitz has till Friday to respond The Board has extended the response period from 72 hours to 5 days quotes the Voice of America News.

"On Wednesday the bank's 24-member executive board said Wolfowitz could have two more days to answer allegations that he violated internal code of ethics in arranging a promotion and pay increase for his companion, a bank employee."

With the Europeans putting the pressure for him to resign, this extension may play well in the assumptions advanced by the International Herald Tribune as reported here.

No boat will be rocked, Wolfowitz will resign quietly (forced in a way) without the requirement for a divisive vote amongst the Board members and the US will have the privilege to choose the next President.

This may be in response to an "IOU" for this little fiasco at UNESCO as reported in the Guardian:
The Europeans joined with the Americans last week to thwart the further investigation by Unesco into yet another Bush appointee to go off the straight and narrow road of probity. Following the hasty departure of former Republican congressman Peter Smith, after auditors had found him steering contracts to Navigant, a UN-based consultancy with few apparent qualifications for them, the non-aligned members urged Unesco to "take appropriate disciplinary action," against Smith and to reinstate the whistleblowers he had transferred.

Steve Clemons, writing on The Coffee House blog, features the tough comment from former IMF chief economist Michael Mussa and says that if he were advising Wolfowitz he'd suggest "a late in the day resignation on Friday just to sidestep much of the news cycle and catch the weekend shows off guard".

Posted by The Beaver at 04:20 AM

Democrats Weigh In Senate Majority Leader Harry Reid is among those democrats who sent a strongly worded letter to President Bush demanding that he do something to resolve the crisis. Their preferred solution would be one that "preserves the important and historical role of the United States in selecting the president of the bank."

Posted by Sameer Dossani at 12:10 AM

Germany and Paris. German Development Minister Heidemarie Wieczorek-Zeul has come out and said it: Wolfowitz should resign. But let's not dare upset our friends on Pennsylvania Avenue.

"The U.S. interest in naming the World Bank president is not being called into question by the German government," she said.

"The United States should rather be given room to react to the current leadership crisis in the bank," she added.

In other news, perhaps Wolfowitz should consider hiring Paris Hilton's lawyer (or her friend Joshua). After all, PW has certainly provided excitement to our otherwise mundane lives.

That should count for something.

"If the late former President Gerald Ford could find it in his heart to pardon the late former President Richard Nixon after his mistake(s), we undeniably support Paul Wolfowitz being pardoned for his honest mistake."

Posted by Shannon Lawrence at 08:18 PM

Did Robin Cleveland pull a Dick Cheney? [Note: pics added] So today at 12pm a number of activists again gathered outside the World Bank to thank Paul Wolfowitz for showing us all what the World Bank is really good for. At 1pm, we were joined by the folks at avaaz.org, who attempted to deliver their sack Paul Wolfowitz petition. One noteworthy rumour that was passed along there concerned Robin Cleveland.

Wolfowitz party photo.jpg
Has she pulled a Dick Cheney? Did she have her huge offices emptied out last night? Apparently she did not trust the custodial staff to carry this out and did it herself overnight. She is still at the Bank somewhere, but at an undisclosed location (perhaps a bunker in rural Virginia?). Can any Bank staff confirm or deny?

Posted by Sameer Dossani at 08:11 PM | Comments (11)

Delay requested: some tips for Wolfowitz's lawyer. Treasury Secretary Henry Paulson Jr. seems to have endorsed the request by Paul Wolfowitz, the World Bank president, for more time to defend himself against charges of misconduct, seeking a delay that could also give the Bush administration time to negotiate his voluntary resignation. This according to the International Herald Tribune.

Is Richard Bennett behind this? What should Wolfowitz's lawyer do next?

While a fellow blogger said yesterday that Wolfowitz lawyer Richard Bennett is a bit subdued these days, I noticed that his Alice in Wonderland metaphor is still getting play in the media. The Wall Street Journal recycled his Red Queen mention – without context, probably baffling many readers. This was the Bennett soundbite of a couple of weeks ago, which I parodied at the time. Now that the situation has taken a turn for the worse for Bennett and his client, I felt it would be only charitable to suggest some other motifs for Wolfowitz’s defence.

1. "The World Bank board is attempting a pre-emptive strike."

2. "The process amounts to a quick and dirty decapitation strategy."

3. "We need to take this problem to the United Nations."

4. "These annoying leaks on the board committee report contents are just weapons of mass distraction".

5. "Removing Wolfowitz might provoke civil war in the Bank".

By the way, despite repeated requests on this blog, there is still no clarity on who is paying Mr Bennett's billable hours. So I don't know whose money I'm saving with the above advice.

Getting back to Paulson. I’m all for due process being followed. But am sure that it’s not just we bloggers who want to get this done and dusted so we can get back to thinking about the real issues in development, rather than this farce.

Posted by Alex Wilks at 07:25 PM | Comments (6)

Congo approves $15 million for governance capacity building in World Bank. BRAZZAVILLE, May 9, 2007 – President Denis Sassou Nguesso today provided US$15 million in grant financing for a Transparency and Governance Capacity Building Project for the World Bank.

The aim of the project is to enhance governance, transparency and effectiveness in public sector financial management, including the development finance sector. The project will also assist the World Bank in putting in place the necessary systems and capacities to ensure the effective management of surplus budget resources generated by windfall European contributions to the IDA 15 replenishment.

President Nguesso has denied allegations that the delay in releasing the findings of an inquiry into mismanagement at the Bank was related to US support for his country's seat in the UN security council or president Paul Wolfowitz's support for his hotel chain.

Readers who like this post will almost certainly also enjoy the Comedy Central Colbert Report (streaming video - ignore the commercial at the beginning).

Posted by Jeff Powell at 06:52 PM

Leaks and counter-leaks: more on report findings. Greg Hitt and Neil King Jr. have several interesting insights into the still secret board committee report on the Wolfowitz case. Writing in the Wall Street Journal, they summarise their understanding of the committee's findings and look ahead to the conclusions of this sorry saga.

Their assessment of the evidence starts with trying to shift the focus away from Paul Wolfowitz. They say the board sub-committee's report: "suggests that the board's Ethics Committee could have been clearer in its communications with Mr. Wolfowitz. It also finds that the contracts of two top Wolfowitz aides, Robin Cleveland and Kevin Kellems, were generous but generally within bank norms. Critics have raised questions about pay arrangements for those individuals".

But, they add: "still, the weight of the findings -- which include some 600 pages of supporting documents -- was against Mr. Wolfowitz. They offer a broad indictment of his actions on behalf of Ms. Riza, alleging that he violated terms of his contract and the bank's code of conduct. The report suggests that he should have left details to others, and that he should have simply gone back to the board for further guidance, instead of moving on his own".

On the question of how the Wolfowitz judgement is being reached and messaged, Hitt and King reach different conclusion from their colleagues writing on the Wall Street Journal editorial page today The Journal's featured article editorial complains that the Bank board committee "leaked its guilty verdict to the Washington Post before Mr. Wolfowitz even had a chance to plead his case". Hitt and King inform their readers that the board committee report: "flags concern with the extensive public statements made by Mr. Wolfowitz and others about what the board regarded as a confidential administrative proceeding. The report says Mr. Wolfowitz's public comments resulted in the institution being seen in a negative light, which undermined staff morale, and was inconsistent with his obligation as president to maintain high standards of integrity."

Greg Hitt, in another piece elsewhere on the WSJ site, goes further along this line. He says the report is very critical of Wolfowitz communications aide Kevin Kellems (forced to announce his resignation on Monday), and says "the report complains that the combative public statements released by Mr. Wolfowitz in the last two weeks have turned what should have been a private administrative proceeding into a bitter public-relations battle, pitting the president against the bank's board".

Our readers will have to make up their own mind about how much of the report's full findings and evidence we are really in a position to know already. But very soon we should be beyond the selective briefings and be able to review the full text for ourself. At the moment there are major differences on such simple matters as the length of the report - Hitt and King say 50 pages, as opposed to 300 mentioned elsewhere.

Thanks to TH for his assiduous work to draw attention to and make available this piece.

Posted by Alex Wilks at 04:45 PM

Potential successors lining up. Although various journalists and commentators are tipping long-shots such Malloch Brown and Clinton (Hilary that is) a smaller list of genuine potential candidates seems to be emerging.

They include:
Robert B. Zoellick, former U.S. trade representative and deputy secretary of state and now a managing director and vice chairman for international affairs at New York investment bank Goldman Sachs Group. The Washington Times has trouble getting anyone to go on the record promoting Zoellick, however, finding only one anonymous “specialist” in favour and one saying he's too tainted by his role in the Bush administration.

Also named in the Washington Times are:

- Deputy Treasury Secretary Robert M. Kimmitt, a former U.S. ambassador to Germany, undersecretary of state for political affairs and general counsel to the Treasury Department.

- Robert D. Hormats, also a Goldman Sachs managing director and former assistant secretary of state for economic and business affairs, deputy U.S. trade representative and senior deputy assistant secretary of state for economic and business affairs.

- Martin Feldstein, chairman of the Council of Economic Advisers during the Reagan administration and now president of the National Bureau of Economic Research and professor of economics at Harvard University.

- Stanley Fischer, who served as the first deputy managing director of the International Monetary Fund from 1994 to 2001. He currently is the governor of the Bank of Israel. He also has been a senior official at Citigroup and vice president for development economics and chief economist at the World Bank.

- U.N. Development Program Administrator Kemal Dervis, a former Turkish minister for economic affairs and the treasury who has held various World Bank positions.

All mentions of Ashraf Ghani seem to have disappeared since 20 April when we reported on this possibility.

If we are missing other important ones, please let us know. Also about your views on the above list.

Posted by Alex Wilks at 04:35 PM | Comments (7)

Wall Street Journal Goes off the Deep End on Malloch Brown. (Update). In this startlingly alarmist Wall Street Journal opinion piece, the editors argue that Mark Malloch Brown, former UN number two, has been pulling the strings of the Wolfowitz saga in order to get himself appointed to the post!

The Journal digs around on Malloch Brown's role as deputy to UN Sec. Gen. Annan (though strangely neglects to mention MB's time as Vice President at the World Bank at the time when Wolfensohn launched the Bank's anti-corruption drive). It finds: "many on the World Bank staff would cheer Mr. Malloch Brown: He's perfect for an institutional culture in which "progressive" thinking goes hand-in-glove with a tolerance for corruption. That culture has been on vivid display in the Euro-coup against Mr. Wolfowitz".

Clearly the Journal is not cheering Sir Mark.

To add to the fact that this has no bearing at all on reality, the piece is called "Axis of Soros" and only mentions Soros in the last line. I knew there were a few conspiracy-theory wielding nutcases out there, but I didn't know they ran the WSJ.

Comment submitted by e-mail, 10 May 2007
"Mark Malloch Brown spoke Monday to a crowded auditorium at the World Bank's headquarters, warning that the bank's mission was "hugely at risk" as long as Paul Wolfowitz remained its president. Only hours earlier, news leaked that a special committee investigating Mr. Wolfowitz had accused him of violating conflict-of-interest rules. A coincidence? We doubt it."

Of course it was a coincidence. Malloch Brown had been invited to give this speech back in late March, before any of this news broke. And he was invited by Marwan Muasher, with the approval of Kevin Kellems. That would be one hell of a conspiracy!

We have now obtained and posted Mark Malloch Brown's speech to the World Bank's Commnet Forum on Monday. As you'll see it's quite interesting. Key extract:

So, I’ve known him and respected him for a long time, but I must say I thought he was dead from day one. And not for the reasons that perhaps would come to mind to any of you, but because of the method of his selection. That is absolutely impossible in the 21st century that a President of a major international institution can be chosen through some backroom casual process in the White House to do with broader issues of moving the pieces around on the board of a second-term administration.

Let me say that I make exactly the same argument about the institution I have most recently come from, the United Nations, where you know I was extremely proud that when I stepped down as Administrator of UNDP, we were able to create a competitive, transparent process where the best qualified candidate and former colleague of all of ours, Kemal Dervis emerged as the new Administrator of UNDP. I called up him and a number of other prominent developing country leaders, many of whom had also worked at the World Bank, and said put your names in the ring for this job. Kemal apart, the others said no way, it has always been an American until you, and if it’s not going to be an American, the furthest they will stray is another European like you. I said no, we have a Secretary General who is absolutely persuaded that the way to recover the legitimacy of these organizations is to have transparency and openness in the selection of their leadership.

Posted by Sameer Dossani at 03:58 PM

On the Hill. As time runs out for Wolfowitz, key World Bank overseers in the U.S. Congress are weighing in. Representative Barney Frank (D-MA), who chairs the House Financial Services Committee, says he’d be much happier to sign a U.S. check to a Wolfowitz-free World Bank.

And seeing as how Senator Patrick Leahy (D-VT), who controls the U.S. contribution to the Bank as chair of the Senate foreign operations subcommittee, has already drawn comparisons between Wolfowitz and Gonzalez, it looks bleak for IDA fundraising on Capitol Hill. Bummer for the “development-intellectual mandarins” whose perks and salaries have received some unwanted attention of late.

Will Germany save the day?

Posted by Shannon Lawrence at 08:25 AM

(Update 2). While Wolfowitz, Folsom and Cleveland hunkered down an eerie calm fell over the Bank on Tuesday. The Board and the Governors were reading the ad hoc committee's report (300 pages, if you believe the New York Times, 600 with transcripts, according to Paul Wolfowitz's newly subdued spokesman, Bob Bennett). Staff went about their work, meetings took place, partnerships were discussed and rumours were traded. People laughed about the only resignation announced on Reuters just as it was being handed over to Kevin's boss.

Even the internal blogs and bulletin boards were a bit quieter. Stories (all verified, it seems) that Director of Institutional Integrity (sic) Suzanne Rich Folsom had stomped her little foot to demand that the bulletin boards be closed down were duly denied by her colleague, Glenn Ware. Few bought that, and the conversation continued in its new venue, in the comment area under External Affairs' insightful article quoting Mark Malloch-Brown (the political consultant who went from the Bank to UNDP to Soros) on "the watershed" the Bank is now facing. He should know, having helped rescue and rebrand the Bank a decade ago, when the Bank was in somewhat safer hands with Jim Wolfensohn.

Some of the unfair entries that were deleted there, it was alleged, were those relating to the crony herself. Surely not!

Actually, Suzanne was getting far less airtime than she deserves: her many fans were probably preparing notes to send to the Volcker Commission, now investigating INT's methods, results and reputation. Now free to write to the investigation's own, outside email account so Mr. Volcker would not have to rely on INT's printers and helpful interpretation and screening, and generously been offered a whole week to request a meeting (NB, cob May 10), staff were taking advantage of the day off to dash off a little something on one page or less.

Maybe about Suzanne's appointment by Paul Wolfowitz "after an international search" that didn't find her.

Maybe about Suzanne's attempts to read email but not constrained by the rules.

Maybe about Suzanne's disciplinary actions against the 'non-performers' in INT, many of whom don't happen to be Americans.

Maybe about how Suzanne's job as Counsellor to the President kept her from doing any credible outreach to "the little people" who might have been interested in her message about anticorruption.

Maybe about why Suzanne has so many PR people, brought with her from the Bank's press operations, her "old job".

Maybe recipe requests for her Republican prayer breakfast specialities.

Or, maybe, something about Congo, where the FT has surfaced allegations that INT's report about corruption and mismanagement of Bank funds was being held up at Paul Wolfowitz's direction. Would that account for Robin Cleveland's quick trip there earlier this year? Or perhaps for Suzanne's failure to bring to closure that avalanche of charges against the many nests of corrupt Bank staff? You never know. Suzanne did have a talk with her colleague (said to have been dating her sister before coming into the Bank at a hugely disproportionate salary) who was a little overwrought and rude to a perfect stranger in the cafeteria a few days ago over how "unamerican" it was for her to wear a blue ribbon. Always good to have a quiet day to give feedback to a subordinate.

Despite Suzanne and Paul's connections to their Bush Administration friends, the White House is establishing some distance from The Current Situation. According to Associated Press, “We still support President Wolfowitz,” Snow said Tuesday. But he added that Bush “is not getting directly, personally involved to my knowledge. ... The conversations right now are not between the administration and the World Bank. I think it's proper to let the process work itself out rather than trying to insinuate ourselves in it.” Karl Rove is said to have phoned PW the other night to urge him to hang tough, while President Bush was entertaining Her Majesty at the White House. Treasury Secretary Paulson, who was invited to the State Dinner, does not seem to be making any calls to his increasingly irate European counterparts.

Quiet today, too, was Robin Cleveland. Her outing to the FT (by Kevin Kellums, most assume) indicates that on April 4 she colluded with Senior VP for External Affairs, Marwan Muasher, to be a bit less than truthful about the former general counsel's involvement in, and the Board's knowledge about, Shaha's deal. What they told the press 'on background' turned not not to be the truth, but, as Stephen Colbert would say, "truthiness". Kevin Kellums had already been shown to have misled the New Yorker and the Post, so truthiness seems to have been widespread among Paul Wolfowitz's inner circle.

Like Paul Wolfowitz, Robin, Marwan and Suzanne still draw paycheques from the Bank, but for how much longer? Terribly unfair, indeed.

Update, Alex Wilks 9 May 2007 14.50 EST

This just in from a correspondent who signs off as "Joe today, Bill tomorrow and Ira the next day. Any name I need to keep out of 'little' Mrs. Folsom's hands". A message submitted to the Volcker Commission and anyone else who will listen.

---------- Forwarded message ----------
From: joe smarty
Date: May 4, 2007 11:57 AM
Subject: Fwd: Letter to World Bank Executive Board about the Department of Institutional Integrity's Independent Review
To: ir-panel@wbeds.dyndns.org

Dear Sirs,

I believe that you all know that the bank is undergoing an independent review of its Department of Institutional Integrity (INT). The main purpose of the review is to evaluate rules and procedures to insure that INT is following "best practices" and is accomplishing its mission. While these are good goals, I think that they fail to take the over arching view that is required to understand the Department of Institutional Integrity.

While the mission of the Department will never make it a welcomed partner with all other units of the Bank, in recent months the relationship between INT and the regions has become almost poisonous. During prior administrations, INT tried hard to establish partnerships with the regions and work in conjunction with them, the assumption being that "all" bank employees wanted what was best for the Institution. Now the regions are portrayed or regarded as our enemies. This change in attitude is not due to any dramatic change in the way the unit performs its day to day functions. The change in the relationship can be directly attributed to INT Senior Management's attitude towards the regions, long time members of the Institution, and anybody that does not completely embrace their agenda. INT and the regions are no longer partners, they are adversaries.

INT Senior Management's attitude can best be described as paranoid. They operate as if the Department were in a state of siege and like to promote the idea that the Department is under attack. Dissent of any kind, either from INT staff or Bank personnel is paramount to "treason" and is treated appropriately. I would encourage you to check a staff roster prior to INT's managerial change. You will find a rate of attrition approaching 40%. While turnover is normal when management changes and the influx of new blood and colour is healthy, such a high rate of attrition is simply not normal. Management will argue that they did not make the staff leave INT; I argue that they made it impossible for them to stay.

INT Senior Management has used the tools of divisiveness and intimidation to insure that staff is too scared to speak out. Many members of INT's staff are G4 visa holders. Their jobs not only mean a source of income but are also a way of staying in the country where they want to live. This is a powerful deterrent from speaking up, particularly if your actions will affect your whole family.

The exceptional latitude that management has to applied to performance and personnel rules has served INT management well. The threat of a personnel action, Performance Improvement Plan, or just not having your contract renewed is enough to keep staff "in line". People are afraid to talk and I would not be exaggerating if I describe the fear of being overheard "criticizing" management as what was felt in the former Eastern Europe prior to Glasnost. All this is aided by a Human Resource representative who is clearly one sided and who has had a reputation for inappropriate behavior and partisanship long before INT started experiencing its staff problems.

The mission statement of the Department of Institutional Integrity is a laudable one. Who can argue with the investigation and prevention of fraud, corruption or misconduct? However, the agency that is to carry out such a mission has the obligation to hold itself to higher, or at the very least the same standards that they hold the people they investigate. INT management has failed to do even that. Actions such as the awarding of sole source contracts, to the hiring of senior staff are done in a less than transparent manner. If you just examine the selection of the Chief Investigative Counselor of the unit, a man who worked for INT but supposedly left the Institution for a year prior to his selection, you will find that he spent more time in INT offices during his period of external employment than was ethically correct. Additionally, the number of contracts steered in the direction of the company that had employed him raises more than one eyebrow in the unit.

The bottom line is, who do you whistle blow to when you work for the department responsible for handling the whistleblowers? Who do you go to when your enforcement department is the one committing the misconduct? Please do not allow this review to become another charade that papers over the real problems in the department and permits the present staff abuses and misconduct to go on. When you have an organization full of lawyers, it is not difficult for them to present issues in such a way that they are just slightly above the line that defines inappropriate or wrong.

I think you will find that including random staff interviews, with the appropriate safeguards, will produce a superior report that will allow you to tailor INT to serve the bank and its staff, not the reverse.

Thank you for your time.

Posted by Deep Insider at 03:45 AM

Wolfowitz nailed for role in Riza Iraq job. Channel 4 News (UK) has learnt that Wolfowitz used his influence to get Riza the SAIC work. Channel 4 reveals a previously unknown document quietly published by the Pentagon relating to Shaha Riza's contract with SAIC in 2003.

You can watch Sue Turton's fascinating 10 minute special report. The report demonstrates Paul Wolfowitz/s direct involvement in getting Riza a consultancy spot in Iraq - in direct contravention of World Bank rules preventing staff working in conflict countries. Channel 4 also digs into the Foundation for the Future position that Shaha Riza has obtained for herself. Not surprisingly they couldn't get pictures of a humming foundation office - because there are none to be had.

Government Accountability Project (GAP) has picked up the story and is quoting that "A preliminary inquiry issued by the Department of Defense (DOD) Directorate for Investigations of Senior Officials office in April 2005 names Paul Wolfowitz as the government official who directed contractor SAIC to hire Shaha Riza." See these verbatim extracts from GAP:
Recognizing Riza’s position at the Bank, the report states Wolfowitz told investigators that, regarding Riza:

“…strong opposition to the war was prevalent in the World Bank, so she incurred some professional risk in taking time off from her World Bank duties to engage in activity supporting the war.”

The document also shows that as early as 2003, Shaha Riza was cooperating with Wolfowitz at the U.S. Defense Department, and Elizabeth Cheney and J. Scott Carpenter at the U.S. State Department in her political work in Iraq.

Two years later, Wolfowitz, Cheney and Carpenter tried to arrange Riza’s ‘secondment’ to the State Department, in possible violation of U.S. appropriations laws.

We thoroughly recommend all our readers watch the report on-line.

Posted by The Beaver at 12:36 AM

Wolfowitz's Girlfriend Resigns as his Girlfriend. Political humorist Andy Borowitz lightens things up with a satirical piece on Paul Wolfowitz's misadventures as President of the World Bank. Maybe this one will make it into Le Monde as well...

By Andy Borowitz
Special to Newsweek

May 8, 2007 - In yet another setback for the embattled World Bank president, Paul Wolfowitz’s girlfriend, Shaha Riza, announced today that she was resigning as Wolfowitz’s girlfriend, “effective immediately.”

While Riza’s role in the conflict-of-interest scandal involving Wolfowitz and the World Bank had placed her in the eye of the media storm, few had expected her to relinquish her girlfriend post without a fight. But according to a source close to Riza, the increasing pressure on the high-profile couple in recent days had convinced her that she “could no longer function effectively as Paul Wolfowitz’s girlfriend.”

A joint communiqué released by the couple indicated that the decision to leave her girlfriend post was entirely Riza’s, but sources close to Wolfowitz suggest that the idea had originated not with her, but with the World Bank president himself. According to one source, “Paul had dinner with Shaha last night and told her they should start seeing other banks.”

News of Riza’s departure sparked speculation that Wolfowitz might have difficulty acquiring a new girlfriend, but according to Vice President Dick Cheney, who has served as Wolfowitz’s unofficial “wingman” for years, nothing could be further from the truth. “The fact that the World Bank found Paul guilty of wrongdoing gives him an air of danger,” Cheney said. “The ladies dig that.”

Elsewhere, after a welcoming speech in which he suggested that Queen Elizabeth II was over 230 years old, President Bush attempted to mend his verbal slip, saying, “The old girl doesn’t look a day over 130.”

Posted by The BIC blogger at 09:56 PM

White house maintains support But just barely. The defense of Wolfowitz was rather lukewarm from Tony Snow today as this Reuters report makes clear. Looks like we're in the bargaining/bluffing stages. I'll match your cronyism and raise you one "gentleman's agreement" system.

Posted by Sameer Dossani at 08:38 PM

Post Wolfie Options This FP blog entry quotes an anonymous Bank source as providing two options for the near future. Option 1: Wolfie is forced out and the process reforms; Option 2: Wolfie resigns and the U.S. puts up a good compromise candidate (Zoellick and Kimmitt are the proposals). If those are the choices I'm hoping for option 1.

Posted by Sameer Dossani at 07:37 PM

We have a problem with the President, not the procedure Problematic statement from Dutch Finance Minister Wouter Bos. Up to now the appointment procedure seems to have worked,'' Bos added. ``We have a problem with the president, not the procedure.''

We really need to turn the screws on the process side of things. Some slogans for press releases may be:

When we thought Bush couldn't do any worse than Ashcroft, he gave us Gonzales.

Well, Bush's pal Rumsfeld needs a place to go. Will they select him next?

Maybe if Gonzales leaves the DoJ, he can go to another job that for which he has no qualifications.

It's completely fitting George W. Bush gets to choose the person in charge of global development. After all, he's made some enlightening remarks about the world including:

Africa is a nation that suffers from incredible disease.
Do you have black [people in Brazil], too?

Etc, etc

Posted by Sameer Dossani at 05:00 PM

Towards an alternative European approach. As our Washington Source has noted, various articles today feature hints of a possible deal to end the Wolfowitz World Bank crisis. Below I summarise this morning's coverage of the current situation, the potential deals and bargaining chips. But above all I spell out a potential new European proposal which does not involve the US keeping hold of the Bank's top job.

Our proposal
The European Network on Debt and Development, its members and many colleagues across the world have long argued that the Europeans should give up the right to nominate the head of the IMF and should reduce the number of European representatives on both the Bank and the Fund boards. In return the US should give up its right to appoint the head of the Bank and the deputy head of the IMF.

This is clearly the way forward now. The Europeans should make concessions on the IMF, not allow the US to maintain its stranglehold on the Bank's top job. These changes are by no means sufficient, but certainly necessary if the Bank and Fund are to have any chance of giving an impression of genuine multilateralism and even-handedness.

The current situation
Firstly, the board committee has delivered a guilty verdict but not delivered a sentence. Reuters' Lesley Wroughton quotes a Bank board source saying "There is no unanimity over how this should be resolved, which is why the ad hoc committee has left it to the board".

Secondly, most Europeans want Wolfowitz to go and want to use this opportunity to release the World Bank's top job from the clutches of the US administration. Our readers will love the following extract from Weisman's New York Times piece "the overwhelming sentiment in Europe, as expressed in editorials, political commentaries and even web logs, was that European governments should never again let the United States pick the president of the World Bank all by itself". Even web logs!

Thirdly, it is still uncertain whether a decision on Wolfowitz will be determined through board consensus or a vote. But either way the officials serving on the Bank's board will have to look to their capitals for instructions on such a delicate matter. Weisman's Herald Tribune piece summarises the situation in key governments as follows:
The Bush administration has repeatedly backed Wolfowitz, but President George W. Bush and Paulson have also called for the completion of the bank's internal review process. Now that that is done, the administration is likely to face renewed pressure. European and American officials say that Paulson has said that the bank process must be respected before the United States is pushed into a position on Wolfowitz. Several European officials said they believed that Paulson was in favor of Wolfowitz leaving, but that Bush and Vice President Dick Cheney were insisting on standing up for him.
Chancellor Angela Merkel of Germany favors Wolfowitz's resignation, people familiar with her thinking say, but is also eager to avoid a confrontation with Bush. But as chief of the European Union, she is said to feel obliged to reflect European views, put forth in the European Parliament's call last month for Wolfowitz to resign.
Prime Minister Tony Blair of Britain, due to step down as soon as this summer, has stood by Bush, but his presumed successor, Gordon Brown, the chancellor of the exchequer, has tangled with Wolfowitz on some bank policies.
European officials say that the Netherlands and the Nordic countries have been most critical of Wolfowitz.

The main deal scenarios.

Scenario 1. Wolfowitz goes quietly, without official censure, and the US government is allowed to appoint his successor without a fuss.
IHT: "What I'm hearing from colleagues is, 'Let's not push the Americans too hard,' " said a senior European official involved in policy on the bank. "We want to avoid a split between the United States and its European allies. We're willing to say: 'O.K., you find a capable American to run this institution and we can live with that.' "

Scenario 2. Wolfowitz refuses to leave of his own accord and has to be voted out. The Europeans challenge the unwritten gentlemans' agreement that allows the US to appoint the World Bank president and a new process has to be found.
NYT: A senior European official said that Europeans have informally told Treasury Secretary Henry M. Paulson Jr. that many of their governments, some of whom asked for the custom to be discarded in 2005, would now renew their demand, especially if Mr. Wolfowitz is forced out by a vote of the bank board.

The bargaining chips and arguments.
For the US:
- threatening our man in the Bank is like threatening the US government. The Administration, Congress, etc will turn against those who wield the knife against Wolfowitz.
- US funding for the Bank is unreliable at the best of times and would be even less likely if the US man is shamed and ousted.
- many in the US don't care about multilateral institutions, including the World Bank and so don't mind if the Bank suffers collateral damage if this crisis drags on.
- European governments are over-represented in terms of voting power and numbers of directors at both the Bank and Fund: this should be slimmed down to take account of Europe's share in the global economy and increasing joint European Union cooperation on economic and foreign policies.

For the Europeans:
- Wolfowitz has been found to have done wrong and both he and the US government said they would respect the outcome of the board process.
- Europeans warned the US government that Wolfowitz would be a bad choice for World Bank president, they were right and the US should learn from this and open up the choice.
- European governments collectively have double the US voting power on the board of the Bank.
- European governments provide over half of the funding for the World Bank's IDA arm, which has just started a replenishment round.
- European governments have the traditional right to appoint the head of the IMF.
- The US government is the only one with veto power on the board of the IMF.

Some Europeans have been stepping up the pressure by saying that "they have begun signaling their intention of aiding African countries and other poor nations through their own development agencies, rather than through the World Bank".

There are certainly more elements to be added to this mix, but again it seems clear to me that the Europeans have a strong position, plus right on their side. They should not compromise on the World Bank president selection process but should offer a grand deal involving US compromises on the governance of the Bank and European ones on the governance of the Fund. Not only on the leadership but also on broader governance and representation questions at both institutions. Including, of course, a clean-out of any senior Wolfowitz appointees who have acted wrongly or over-politically while at the Bank. Further transparency of Bank decisions will certainly also be required.

Other kinds of deals would look short-termist and opportunistic by comparison.

This comment can be reprinted in other blogs and newsletters as long as it is attributed to Alex Wilks and linked to this original post.

Posted by Alex Wilks at 10:52 AM | Comments (22)

Who does Canada represent? As Deep Insider has reported , the Canadian representative on the World Bank board is one of the few in Wolfowitz's corner. The New York Times, in its latest articles by Steven Weisman, agrees with that assessment, saying it's Canada, the U.S., and Japan still willing to stand with him. But at the Board, Canada isn't just Canada ...

It also represents a constituency that includes Ireland and the anglophone Caribbean countries. The lead member of a constituency is supposed to consult with all the member governments it represents regarding positions at the Board. It seems unlikely that the Irish are big Wolfo supporters, and I haven't head anything about Caribbeans carrying placards for the man.

There is precedent for "mixed constituencies" (of donor and borrowing countries), inevitably chaired by a donor, taking positions to reflect the borrowers' in situations like this. Specifically, in the brouhaha over the selection of Rodrigo Rato as the IMF's Managing Director in 2004 (which I've discussed here), the constituencies led by Australia (including Pacific island nations, its WB counterpart is chaired by South Korea), Switzerland (including Central Asian nations), and, I believe, Canada, were part of the group of 11 board members taking a very unusual public position for change in the way the head of the IMF is chosen.

Shouldn't the Canadians be checking with their partners? And shouldn't those partners, reading about the position they've been put in, be placing some calls to Ottawa?

Posted by Soren Ambrose at 07:22 AM

The horse trading starts. Europe has just put in the opening bid, if Wolfowitz resigns now, the US gets to name the next president of the World Bank.

Here is the opening paragraph of a report by Steven R. Weisman in the IHT:

"Leading governments of Europe, mounting a new campaign to push Paul Wolfowitz from his job as World Bank president, signaled Monday that they were willing to let the United States choose the bank's next chief, but only if Wolfowitz stepped down soon, European officials said."

See the full article.

Posted by A Washington source at 03:35 AM

Wild Speculation Thread So the first day of this week has been interesting. Use the comments section below to guess at what comes next. My own play at Nostradamus below the fold:

1) Tonight and tomorrow, there won't be so much leaks as floods regarding the report of the Board's special panel on Wolfowitz's dealings with Riza.

2) Robin Cleveland will announce her resignation by Wednesday, due to her role in the cover up and her close association with Wolf the second.

3) Pleading ignorance, Marwan Muasher, who's also implicated in the cover up, will not resign. At least not this week.

4) Wolfowitz himself will stay on till the bitter end. On Thursday, the Board will be forced to take the unusual step of calling a press conference to release some of the findings of the special panel. Any recommendations will be pretty wimpy, but by this point, Wolf2 will have no choice but to see the writing on the wall. His allies in the White House will also have read the report by then, and be shaking their heads in that "Sorry man, we can't get you out of this one" kinda way. (They'll be way too busy with Alberto "Fredo" Gonzales by that point anyway.) Resignation Friday. Calls for massive governance overhaul of the Bank next week.

Ok, that was fun. What do you think?

Posted by Sameer Dossani at 02:10 AM | Comments (18)

Is Robin Cleveland or Marwan Muasher next? (UPDATE) The Financial Times implicates new World Bank Vice President of External Affairs, plus Wolfowitz advisor Robin Cleveland, in a plot to mislead the public. The apparently tried to blame the former general counsel and the ethics committee for approving Shaha Riza's external assignment to the State Department. When news of the FT story broke in the Bank just now, External Affairs VP Marwan Muasher left the World Bank communications staff cocktail reception in the atrium, and headed to the 12th Floor where the president and his top team reside.

The key events that caused this rush upstairs...

Ms Cleveland met Marwan Muasher, the newly arrived director for external relations, on April 4 to discuss how to respond to leaks about the terms and conditions awarded to Ms Riza.

They agreed on a statement that was to be briefed on an anonymous or “background” basis by senior bank officials. This included the apparently misleading claim that “after consultation with the then general counsel, the ethics committee of the board approved an external assignment agreement which was reached with the staff member”.

Mr Muasher confirmed the agreed text with Ms Cleveland in an e-mail, a copy of which has been seen by the FT, and its authenticity has been attested to by two bank officials. The statement was then briefed to the FT and other media organisations by senior bank officials.

The claim that the agreement was approved by the ethics committee after consultation with the general counsel was immediately disputed by Roberto Danino, then general counsel, and Ad Melkert, then chairing the ethics committee.

The interim report by the panel found no evidence that the terms and conditions “had been commented on, reviewed or approved by the ethics committee, its chairman or the board”.

The panel also said it was told by Mr Danino “he was not involved in any way in the implementation of the ethics committee advice”.

It looks as if the brand new Senior Vice President, External Affairs, and Wolfowitz crony in "his old job" may have to do the Walk of Shame, too. Remember that the board on in its April 19 statement, extended its investigation to include "the various public communications made by the Bank on the matter and issues around employment contracts made in the Office of the President."

In his defense Mr Muasher, former deputy prime minister of Jordan, may well tell people that he had been at the World Bank for just 2½ weeks when he met Robin Cleveland on 4 April. But caution would have been very advisable on such a sensitive matter at an early stage of his Bank career. It would be hard to rebuild confidence among Bank staff, the media and others on his public announcements if he stays.

Posted by Deep Insider at 10:47 PM

UPDATE:Board committee finds Wolfowitz has broken rules. According to the New York Times, the Ad hoc Panel has found Wolfowitz to be guilty of conflict of interest in arranging Riza's salary raise and promotion and to have broken rules in arranging her transfer to the State Department.

The report that was submitted to Wolfowitz overnight, according to the Washington Post, did not include his punishment and today the Panel is working on its recommendations on the actions to be taken before submitting their findings and recommendations to the 24-member board which will decide on the President's future sometime this week. Should Wolfowitz and his lawyer request more time for a rebuttal, the Board may take longer for its decision and votes.

As David Corn said on his blog: "It's anyone's guess what the Bank's board is going to do regarding Wolfowitz's future. They could vote to remove him--or settle on a reprimand or statement of no confidence. But his hard-line defense may have made it tougher for the board to keep him on. If Wolfowitz cannot acknowledge that he engaged in a conflict of interest, how can the board have faith in his judgment?"

Washington Post is saying the following:
Wolfowitz' attorney, Robert Bennett, said his client was being given 48 hours to respond, which he called "unreasonable and unfair," and said they had requested to have until next Monday.

Since "The report was characterized as an exhaustive, 300-page indictment of Wolfowitz's management of the international community's premier anti-poverty institution, according to sources familiar with the document." as reported by the LA Times the legal team must be pouring over every single phrase and references to see if there is a way out.

Will the fact that "there was a recognition in the special panel's report that some of the ethics committee's direction concerning the matter wasn't clear.", as advanced in the same Washington Post's article, impact the decisions of the Board?

Posted by The Beaver at 09:42 PM

Is the Spinmaster doing his last deed? (UPDATE) According to Bank Information Center Executive Director Manish Bapna "Kellems' resignation is perhaps a last ditch effort to stave off a vote of no confidence by the Bank board,"

Looks like Kellems is calling the media himself to announce his resignation. Still demonstrating his loyalty to the party and trying to save the life of the boss.
His last day is expected to be next week and though no one knows what he will be doing, there have been rumours since last February that he may run again for the 2008 Indiana's 9th Congressional District (he lost the 2000 primary nomination).

With what is happening with the Iraq war and what some of us knew then and now , what he said at that time may not aspire confidence for the position of Adviser to the President of the WB- the word "flack" is more appropriate in this context. With the ship sinking, he needs to think about his future if he really wants to run for office.

UPDATE : 14:00 EST
The FT has more insights. Kellems was not getting along with Robin Cleveland and "Mr Kellems is understood to want to remain in the development field and not return to US electoral politics.".

Only the future will tell us where he lands...........

Posted by The Beaver at 04:41 PM

Wolfowitz's right hand man jumps ship. News just in: Kevin Kellems, Paul Wolfowitz's spin doctor and enforcer, has announced he is leaving the Bank. This is surely a sign that the Wolfowitz camp is very worried, and hopefully a sign that more resignations will follow this week.

Kellems told Reuters he was leaving "for other opportunities". "Given the current environment surrounding the leadership of the World Bank Group, it is very difficult to be effective in helping to advance the mission of the institution," Kellems said.

Kevin Kellems has been an advisor to Wolfowitz since 2002, firstly at the Pentagon during the planning of the Iraq war and subsequently at the Bank where he followed Wolfowitz two years ago.

Could this be a prelude to a week of further resignations? I expect so. Remember that Wolfowitz already offered to sacrifice his other aide Robin Cleveland, an offer that World Bank staff rejected.

But I don't think this is just an effort by the Wolfowitz camp to show that they are taking action. Kellems may be running scared of journalists who are closely pursuing several leads on his allegedly less than professional conduct while on certain missions for the World Bank in Brazil, Singapore and China. On Saturday a major European TV channel ramped up its efforts to validate these stories. The fact that a big story may have been about to break on this, following weeks of rumours, may have made Kellems decide his continued presence at the Bank was a danger to his boss. Another possibility is that Kellems is due to get heavily sanctioned by the Bank's board which on 19 April extended its inquiry to "the various public communications made by the Bank on the matter and issues around employment contracts made in the Office of the President".

This rushed exit is certainly a big come-down for the man who is widely considered to have been behind some of Wolfowitz's most aggressive press messaging. For example the famous off the record denunciation of UK minister Hilary Benn at the time of the World Bank's 2006 Annual Meetings. At that time an unnamed Bank source said that Benn had tossed 'fictional red meat' to a hungry press corps for political reasons.

As this episode showed Kellems is the kind of man who would much prefer to stay on and fight Wolfowitz's corner.

Now that Kellems has departed to spend more time in the sauna it will certainly be hard for the Wolfowitz camp to keep the focus just on the narrow Rizagate issues this week. All bets are off on how many of the Wolfowitz senior appointees are preparing their resignation letters.

More information on Wolfowitz's controversial senior appointments at the Bank.

Update: this story has been widely picked up in the media, including by Inter-Press Service in an article citing www.worldbankpresident.org.

Also in a wry piece by Ward Harkavy of Village Voice. Harkavy was very early on several elements of this story.

Posted by Alex Wilks at 03:54 PM | Comments (6)

Latest on decision timing and outcome (update). At the weekend the Bank's board failed to finish its review of the charges against Paul Wolfowitz, meaning that "deliberations over Mr. Wolfowitz would be delayed at least until the end of the week". This according to Steven R. Weisman in a New York Times piece that just went on-line. The slight delay is said to be due to "difficulties in drafting the particulars against Mr. Wolfowitz" rather than any behind the scenes deal-making. Weisman, who's been very on top of this story, quotes bank officials saying "the panel would eventually find that he violated bank rules barring conflicts of interest".

The Bank's board will share its findings with Paul Wolfowitz (expect more outbursts from his lawyer/spokesperson). But it will hold back its conclusions on what should be done:

Bank officials said the committee was also preparing a recommendation on what the full board should do in light of its finding but would not be disclosing that to Mr. Wolfowitz.

The committee is considering whether to recommend an outright removal or some kind of no-confidence vote that may persuade him to resign. That part of the conclusion is not likely to become known until later, bank officials said.

Looking at the numbers in the case of a vote Weisman summarises the situation as follows:

"If the matter comes down to some form of a no-confidence vote, European countries, as well as most countries in Asia and Latin America, are likely to line up against Mr. Wolfowitz.

African countries are known to be torn, with many of them favorable to Mr. Wolfowitz’s emphasis on increasing assistance in the sub-Saharan region, but others worry that his continued presence may discourage European countries from financing programs for Africa through the bank.

The only countries that bank officials say are lined up for Mr. Wolfowitz are the United States, Canada and Japan, about 28 percent of the total".

That sounds about right to me.

The New Yorker, meanwhile, has a 'No Blame, no Shame' article indicating that "The Bush Administration has come close to perfecting the art of unaccountability. ... Assertion is the neoconservative style of avoiding accountability: don’t give an inch or they’ll tear you to pieces. Wolfowitz’s ally Richard Perle once said that to express public doubts about the Iraq war 'would be fatal'."

Mark Leibovitch, writing in the International Herald Tribune, also has a piece looking ahead to this week's events. Comparing the saga to a popular TV programme he writes: "Beltway wise guys have amused themselves with a distinctively local version of the TV show "Survivor," pitting Attorney General Alberto Gonzales against Paul Wolfowitz, the World Bank chief. Who will be first banished from the swamp?" Mixing his metaphors he predicts they will both go soon ("a pervasive belief has taken hold that both are, in the tender parlance of politics, road kill"), but declines to make his own prediction on who will go first.

Update. 12.45 EST
Reuters has a story indicating that the Bank board committee has delivered its findings to Paul Wolfowitz. The full board will receive the report tomorrow (Tuesday) and discuss Wolfowitz's future later in the week.

Posted by Alex Wilks at 12:01 PM

Hundreds more staff sign letter: World Bank governance agenda under threat. World Bank staff are continuing to make their views known. The staff letter we announced ten days ago now contains an additional 700 signatures of angry Bank staff. The staff concerned are working directly on good governance and anti-corruption. They argue that the present crisis is a critical test of the Bank’s own commitment to the principles of sound corporate governance. Yes, as the Bank already had very doubtful credbility in key circles, this may take ages to recover from.

I agree strongly with the letter's main point, but disagree with some of its logic. The Bank staff argue that they "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 on the Governance and Anti-Corruption agenda".

At the European Network on Debt and Development we have argued consistently that not just Wolfowitz but the institution as a whole carry heavy baggage which prevent it taking a major role in global anti-corruption activities. The Bank should focus on do no harm interventions rather than positioning itself as a major force for the good in the corruption area.

In a joint letter of July 2006 we stated:

"The World Bank has neither the mandate, the legitimacy nor the capacity to become a global arbiter on corruption. Whilst corruption is a concern in many developing countries around the world recent events in the UK (cash for peerages) and the US (Enron, Katrina relief) illustrate that it is far from being a ‘poor country problem’. The problem needs to be seen in the context of other challenges that countries face in building democratic developmental states and combating poverty. The World Bank should focus its energies on its own operations and not move into the role of a ‘global policeman’ on corruption. It cannot be both judge and jury of its own actions and is not a legitimate actor to lead the charge on issues of anti-corruption and much less in the field of governance".

We also said:

"The Bank needs to ensure that it is more transparent in its own decision-making processes and that it takes an approach which facilitates domestic accountability rather than taking a top-down approach to ‘fixing’ governance problems.

In short: the debate on what the Bank can and cannot do on governance will by no means end with the removal of Wolfowitz.


The World Bank staff letter has also been picked up in a Reuters piece by Lesley Wroughton

Following the rumours that key Wolfowitz appointees are threatening Bank staff's electronic postings, we have taken the precaution of posting a copy of the letter to this site (PDF). You may also want to take a look at the 17 April statement from Transparency International making similar points (strangely although the letter calls for a transparent and swift resolution of this issue TI don't seem to have issued anything since then).

Posted by Alex Wilks at 11:02 AM | Comments (4)

From the Great White North Canadian staff at the Bank are furious that Samy Watson, ED for Canada, Ireland and the Caribbean, and the Canadian government, have not been more forthcoming in commending the process that will lead to Paul Wolfowitz's removal as World Bank President. It's becoming clearer that the the situation is murky, with problems on both the Harper government side and with the highest levels of the Liberal Party opposition. Harper's regime hangs on by a thread, as the issue becomes not "if" but "when" his minority government has to face the restive Canadian electorate.

The Wolfowitz issue isn't getting top priority from the Liberals in Question Period. They've got other issues that are more damaging to Harper and Co. - namely, Afghanistan bungling and Kyoto failures - so they're focussing on those.

Both can be linked to (1) Paul Wolfowitz and his involvement in the US side of the issue, including the torture of prisoners and (2) a residual climate change denial rump in the Harper government (with Juan Jose Daboob holding up his end at the Bank). And don't ignore the Alberta crackers and tar sands investors who are the big supporters of Canada's version of the Bush administration.

In Ottawa, Question Period is a pretty constrained forum, and when you factor in the additional media-related filters, Opposition Leader Stefan Dion has to target his topics very narrowly in order to make any impact. And with Dion's inner circle split among his advisors, the right thing to do is hard. Before his return to Canada to seek high public office, Deputy Liberal Leader Michael Ignatieff was among the only public intellectuals to support the war in Iraq. Aside from his inability to stick coherntly to a message, this was probably a key issue in his defeat by Dion to be Liberal party leader. Another key player in Dion's office, Marcel Masse, is the last Canadian ED at the Bank. A distinguished civil servant, former cabinet minister and head of CIDA, Masse is no friend of Wolfowitz. But Masse is very prudent in his advice and probably does not want to waste what limited political capital he has in a disorganized inner circle around Dion (as reported two weeks ago in the Globe and Mail) to push this one.

Failing to support Wolfowitz's ouster isn't likely to defeat or even seriously damage Harper. It adds, though, to the emerging pattern, identified by The National Post's parliamentary columnist on Saturday, that Harper has no ethical or moral centre and is preparing to say or do whatever he thinks will get him a majority government: the most dangerous example is his pandering to nationalist/sovereigntist/autonomist sentiment in Quebec. Thankfully, it doesn't seem to be working: the lastest Ipsos-Reid poll has the Conservatives (no longer Progressive) and Liberals at 30% each.

As a big Canadian bookstore says, "The World Needs More Canada". Now is the time for Samy Watson and whoever his controllers are in Ottawa to do the right thing, read the ad hoc committee's report, and if Paul Wolfowitz doesn't resign, toss him and his cronies over the side so the rebuilding of the Bank's credibility and effectiveness can begin.

After all, campaign commercials saying "you supported a person who gave his girlfriend a $66,000 (Canadian) raise, eh?" aren't pretty. Canada has a long history of expecting high standards of integrity from political and business leaders, and of supporting the World Bank and multilateral approaches to development. Now is not the time to abandon that record.

Posted by Deep Insider at 03:56 AM

So what happens now?. There are basically four possibilities now for this week, since Wolfowitz has refused to resign on his own. 1) The board would exonerate him. 2) Find Wolfowitz in breach of his contract and bank rules and asks him to resign. 3) they find him in breach but stop short of asking for his resignation. 4) find him in breach and call a formal vote of no-confidence.

In short, the board has very few options, and none that seem to be cost free. To exonerate Wolfowitz , the board will be risking its own reputation and that of the bank and its effectiveness, since few would take the institution seriously anymore, including its own staff. To find him in breach but not ask for his resignation, means they have to come up with some sort of credible mechanism to address the issue of how to make the bank work under a tarnished and lame duck president, a very hard thing to do. To call for a formal vote of no-confidence, means they can split the board between two groups, one led by the US and the other by Europe.

The best scenario to restore the bank's credibility, in my opinion, is to actually vote him out unanimously. Unfortunately the most likely scenario at this point however, other than Wolfowitz offering his own resignation voluntarily or receiving a call from the white house advising him to do it, is to find him in breach and formally ask for his resignation. That would at least put the ball back in his hands and that of the US. And since both Wolfowitz and the White House said, at least initially, they will respect the board's decision, they will certainly be on the spot.

The board has no more time, this week is probably the last week they still can claim they are working to resolve this in the proper way, and still sound credible.

What are your thoughts?

Posted by A Washington source at 08:39 PM | Comments (374)

Early reporting on this scandal. True, Wolfowitz's record at the world bank became a major news story only in the past few weeks. Some journalists however, have reported a great deal of these allegations as early as 2005. Here are the leaders of the media pack on this story:

- Ward Harkavy of the village voice who was the first to write in September 2005 and then again in January 2006 about this story

- Paul Blustein of the Washington Post from January 2006.

- Steve Clemons of the Washington Note, in January 2006.

- Former World Bank staff member; Mohamed Hakki in March 2006 - published by counterpunch.org.

Let's not forget also the early reporting here on worldbankpresident.org about this story, also from 2005.

Posted by A Washington source at 03:59 PM

J'accuse The Washington Post's finance and business curmudgeon, Steven Pearlstein, lashes out at the hypocrisy of the World Bank's Board in his "l'Affaire Wolfowitz" squib Sunday morning. What he does not discuss is how this links back to Wolfowitz cronies, Suzanne Rich Folsom and Kevin Kellums.

Pearlstein's right, of course, that the Board reacted slowly nearly two years ago when they annointed George Bush's choice to head the Bank. After the unanimous confirmation on March 31, 2005, perhaps after waiting at Casualty for painkillers for their twisted arms, someone should have gone to Wolfowitz with some bad news to take home. "Look, we have rules about sexual relationships and Shaha can't work here once you come on board. We need that settled before June 1, and your own contract is signed, so there are no issues to get in the way of your taking over."

Now we don't know that someone didn't say that. Of course, lots might have been thinking it. Like Maria Borrero, former Ethics Officer, who read about it in the papers like everyone else and had a keen sense for conflicts of interest and the appearance thereof. Like staff telling the Staff Association that there were issues the Board needed to look into. Their notes, sanitized of authors, were delivered in big binders to the Board to aid in the due diligence on George W. Bush's sole nominee then into his charm offensive in Europe (see here and here) and with Board members, sort of like a US Senate confirmation hearing. Given the overwhelming opposition to his appointment, a quick glance through the staff views, pro and con, might have turned this up. It's not as if Shaha and Paul Wolfowitz being an item was a secret: the May 2004 New Yorker article, the UK press the week after he was nominated, and Shaha's colleagues who were imperiously reminded from time to time of just why she should be taken seriously.

What is clear is that the Board didn't act, leaving the messy issue open for Paul Wolfowitz to interfere in once he arrived. We now all know what happened next, leading to Shaha's unearned promotion, outside-the-rules raise and salary and promotion promises, and external service for Liz Cheney at State.

Now, let's say that in the two months between when he was selected and when he came on board there were attempts to resolve Shaha Riza's situation. She was apparently uncooperative, and unpleasantly so. She didn't want to leave the Bank, and hired her own lawyer. Wolfowitz feared she, his girlfriend, would sue the Bank.

"What a mess, how did this happen, what sorts of rules apply here!?"

So, what does Wolfowitz do once he is on board? On July 27, he announces that he's hired Robert Pozen, a $2000/day volunteer, to look into all aspects of the Bank's compliance and conflict resolution mechanisms. This would of course include Ethics (may have insisted on 'doing the right thing' on Shaha), the Mediation system and the Ombudsman, INT (where Suzanne Rich Folsom had not yet arrived), Internal Audit and various other compliance and internal controls units. The town meeting, his first, was where he also spoke of the G8 Gleneagles Summit outcome, including the multilateral debt relief initiative that he proudly brought back. MDRI was subsequently described as "if not the worst idea of how to fix this, it's hard to figure out what would be."

In an internal announcement the next day, Wolfowitz explained

Date: July 28, 2005 - 18:35

Sponsor: Office of the President

Over the last decade, the World Bank has invested substantial resources in developing mechanisms for ensuring transparency, accountability, ethics and integrity throughout Bank operations. These initiatives have greatly enhanced the Bank Group’s performance and contributed to its leadership role in supporting such reforms throughout the development community. However, the growth of mechanisms for oversight, compliance, investigation and conflict resolution has also led to the creation of many offices or departments within the World Bank Group that have some type of responsibility in this area.

I have asked Robert C. Pozen, currently Chairman of MFS Investment Management, to review how the Bank Group is organized in this area and to advise me whether he believes any changes are needed to improve effectiveness and ensure proper coordination. The purpose of the review is to clarify roles, ensure an efficient use of resources, and ascertain that there are no gaps.

Bob is a distinguished authority on corporate governance. He previously served in a number of positions at Fidelity Investments, including President of Fidelity Management Research Company from 1997 through 2001. Since February 2004, Bob has been serving as Chairman of MFS Investment Management.

I ask all Bank Group staff to assist Bob in any requests he may have for information or assistance. Suzanne Folsom in my office will be Bob’s point of contact in the Bank.

Paul Wolfowitz

For Information: Kevin Shaw Kellems

"Volunteer" Pozen, who was apparently sole-sourced, conducted his inquiries under the guidance of, you guessed it, Suzanne Rich Folsom. Brought on board by Jim Wolfensohn to help out with Republicans on the Hill, just two months earlier, she was managing the North American media relations in EXT. Having pushed her way into the inner circle, Suzanne subsequently made sure that Pozen didn't even talk to all the heads of all the compliance units.

So, what, exactly, did Robert Pozen find, and what did he advise?

We'll never know, because he never submitted a written report.

Posted by Deep Insider at 03:17 PM

Everyone's Writing about Paul Wolfowitz Just when you thought you could catch up on George Tenet, Alberto Gonzales, Condi Rice and Niger, and Karl Rove's missing emails, trees are still being cut down to cover Paul Wolfowitz's adventures in corruption and cover-up. Voting him off the island is a good place to start.

So it appears that, to Wolfowitz, "keeping the ethics committee informed" actually means "someone else found out about the arrangements and blew the whistle in an anonymous email."

POSSLQ is not a word one sees often in the 21st century, but a friend of Paul Wolfowitz's neocon SAIS friend Ruth Wedgwood offers his perspectives on the facts in the matter

It would have been in better taste for Wolfowitz not to take the job in the first place, but indelicacy isn't the same thing as corruption.


I don't see how it's possible to avoid the conclusion that Wolfowitz attempted to mislead the public about how the Riza case was managed. And I don't see how it's possible to avoid the conclusion that, having gotten caught, Wolfowitz must either resign or be fired.

And from South Africa where, readers may recall, Juan Jose Daboob lectured Trevor Manuel about the virtues of privatization

Although Wolfowitz got the hearing he said was his due on Monday, it only made things worse. He had claimed the support of the bank’s ethics committee, but its former chairman, Ad Melkert, had a different story.

He said he had told Wolfowitz his girlfriend needed to be moved to a job beyond his supervision and compensated for any disruption. But he said he didn’t know about, let alone approve, his negotiating her pay package.

Since coming to the bank, Wolfowitz has adopted the attitude that everyone is corrupt until proven otherwise, has hired unqualified cronies, and pushed US views, such as an anti-abortion agenda, on an international body.

This was in keeping with his record at the Pentagon. As deputy secretary of defence, he boxed out anyone who did not co-operate in his effort to prove Iraq had weapons of mass destruction.

You’re not being smeared if the accusation being raised against you is true, even if it’s small compared to the other stuff you’ve done. Just ask former president Bill Clinton, nailed for lying about Monica Lewinsky.

Wolfowitz in his victimhood is like George Tenet, who’s flogging a book, for which he got a $4m advance, like an crybaby. How unfair, he wails, that he should be blamed for the Iraq war just because he provided the basis for waging it. Tenet was so agitated in a 60 Minutes television interview that if there had been a couch nearby he would have jumped up and down on it.

Nice to see the allusion to reality-denying cults, too, at the end.

and, of course, Ken Rogoff, making the point that maybe other countries might be a better source for a job as important as World Bank president, after a process that was not allowed to become out-placement services from a failing US administration.

Posted by Deep Insider at 12:34 PM

FT Deutschland: Wolfowitz case must end U.S. right to choose Prez The German edition of the Financial Times is arguing [english here] that this sordid affair must be the end of U.S. appointments to the post of WB president. Great to see others, including the FT, making this case.

Posted by Sameer Dossani at 12:32 AM

What is it about Nigeria? People perusing their NYT Saturday morning over coffee will find five letters to the editor. They're thinking, hmmm, one pro-Paul Wolfowitz letter from Alabama, by Professor Okeowo of Alabama State University. What is it about Nigeria?

Every week, thousands of people are motivated to write heartfelt letters to the editor of newspapers that reach influential international readers. I feel quite sure that three men of free will -- Nigerian lobbyist in Washington Andrew Young, the International Herald Tribune op ed writer from Nigeria who heads up the country's economic and financial crimes commission, and New York Times letter writer Professor Okeowo, who rocks a Nigerian name -- never met.

Each was stirred to write to a major newspaper about this compelling issue confronting the bank. In the same week. While Ruth Wedgewood (who arrived at SAIS just as PW left, and subsequently built her reputation as an advocate for secret military tribunals even before the boots were on the ground in Afghanistan) and others furiously worked the phones in Washington, blogged on conservative sites, and fumed to cameras, etc., on Wolfie's behalf.

What is it about Nigeria? Since he discovered Africa once he arrived at the Bank, Paul Wolfowitz has had a special fondness for one of America's largest suppliers of oil. He was photographed whenever he could manage with "Minister Ngozi", the former World Bank executive who became the Finance Minister, and is now at Brookings. Despite remarkable success at bringing Nigeria's out-of-control public finances into some order, thereby reducing inflation (which has scourged Nigeria's tens of millions of poor, honest farmers and business people for decades), Ngozi was shifted to being Foreign Minister and then dumped after her cabinet colleagues grew tired of her policing of their spending and thieving. Her role in getting back the stolen billions that late President Abacha had squirrelled away abroad may have also troubled their own flights to Europe to check up on their assets. Oh, and Ngozi also negotiated unheard of debt cancellation terms at both the Paris Club and the London Club, which is rare for a country without an IMF program. Meanwhile oil producers beefed up security in the Niger delta, as the impoverished people there demanded a share of the national wealth beneath their feet and off their shores.

Nigeria must have some powerful allies somewhere. Along with all that oil.

As the readers of the Times turn to the crossword, perhaps they first should use their pencils to connect a few more dots about oil and the countries Paul Wolfowitz has been particularly fond of over, say, the last 20 years...

Posted by Deep Insider at 03:42 PM

Critical facts: a guide to the Wolfowitz case. World Bank staff members, writing on the Wolfowitzresign blog, have kindly produced a summary of the facts of the case. They note that "the sheer volume of information circulating in the Wolfowitz leadership scandal threatens to cloud some of the key issues". And that: "Mr. Wolfowitz's statement of April 30 2007 has added unsubstantiated assertions as facts".

Their fact sheet on the Wolfowitz situation can be found here. It covers the following issues.

Issue 1: Mr. Wolfowitz's initial offer to recuse himself
Issue 2: Instructions of the Ethics Committee to Mr. Wolfowitz
Issue 3: Violation of President's Contract and Bank's Ethical Rules
Issue 4: Pattern of Misleading Information
Issue 5: Pattern of Behavior
Issue 5: Portrayal as Victim of Circumstance
Issue 6: The Real Smear Campaign
Issue 7: It is unclear what Ms. Riza been doing for the Past 2 Years.

For another wrap-up of the key allegations and charges, see my 17 April post The Wolfowitz saga: a guide to all the angles.

See also the Point, Counterpoint guide published by Bank Information Center on 2 May.

Posted by Alex Wilks at 01:11 PM

How you can help. If we're really to get under the skin of the battle to be next World Bank president, we're going to need your help.

Four things you can do (in no particular order)...

Keep coming back as often as possible (we recommend daily as things hot up).

Email a recommendation to all your friends and contacts (yes all of them - we promise they're all going to be very interested).

Link to us from your website. We know there are thousands of sites out there that track the World Bank's activities. It'd be great if you could let your readers know we exist (do tell us if you put a link up).

Syndicate content to your site (using the xml, rss 1.0 or rss 2.0 feeds - these will work for your offline news readers too).

Contact us (email or phone) if you hear any news or gossip. Maybe you work for the Bank, a government, or are a journalist following the story. We'd love to publish any rumours that stand up (or can at least stagger around a bit).

Get in touch with your reaction to any President related news (here's how). The World Bank is a powerful institution and its President is important for people across the globe. We'd love to hear your thoughts either by email (we'll print a selection of letters we receive) or in the comments windows annexed to selected posts. (Please also tell us straight away if you see any flame mail or advertising we should delete from the comments).

Finally, feel free to use this site as a source - either on the web (with a link please) or in print (attribute to the worldbankpresident.org). Journalists can also contact us for an interview or quick quote.

Posted by David Steven at 10:10 AM

worldbankpresident.org is … the site you need to track the media coverage, insider gossip, official reactions and civil society activity on the World Bank president. If you are a journalist, activist, official, student or anyone wanting to follow the details of this story in real time, you've come to the right place.

This blog was originally set up the day in January 2005 that former World Bank president James Wolfensohn announced he would be retiring. We wanted to shine a light on the medieval process for choosing the head of this very powerful institution - the fact that the position is in the gift of the US government.

Sadly despite our efforts to expose the behind the scenes manouevres and dealings, George W. Bush did get to tap a candidate on the shoulder and put him at the top of the Bank.

We tracked and informed the global reaction to the Wolfowitz appointment, almost entirely of alarm, but decided in April 2005 to put the site on ice and let the tracking of Wolfowitz in office take place elsewhere.

The predictions on this site about the problems Wolfowitz would cause proved true and in April 2007 bubbled up very dramatically in the world's media. The time had come to start blogging again.

With new members in our blogging team, and masses of energy, we have fed journalists tips for stories, inspired activists to ramp up their challenges, and emboldened more officials to speak out.

Don't hesitate to get involved or get in touch.

Posted by Alex Wilks at 09:44 AM

"Washington insiderism". A good article by David Corn, the Washington editor of The Nation magazine, detailing the incestuous web of relationships in the structure of the foundation of the future, where Shaha Riza now works.

One thing that David Corn missed in his reporting and analysis is the fact that Anwar Ibrahim was also hired by Paul Wolfowitz as a consultant at the Bank from 2005 until mid 2006.

Posted by A Washington source at 03:24 AM

Contact us. Journalists or others are welcome to contact the site editor or authors for a quote, comment or contact. They may do so by posting comments to our posts, by e-mail on contact@worldbankpresident.org or by phone on
+32 4 98549482 (Alex Wilks - site editor),
+254 723 151 541 (Soren Ambrose),
+44 781 718 4435 (Jeff Powell),
+1 202 340 0216 (Sameer Dossani).

Some of our authors prefer to remain anonymous, for reasons that will be obvious on such a sensitive matter.

Please note that David Steven is currently focussing on other issues, so please don't bother him about the World Bank president.

Posted by Alex Wilks at 12:00 AM

Reform for next Prez? Don’t hold your breath. With no government officials calling for systemic change, the WB board looks likely to sidestep any change to business as usual (i.e., the U.S. calls the shots).

The salient question, as I argued back at the beginning of this episode, is whether there will be substantial reform in how the World Bank president is chosen. That may take a little longer to play out, or it may not.

Recent newspaper articles have suggested that an all-too-predictable process may be underway – a negotiation between Wolfowitz’s lawyer and the World Bank board to find a face-saving and mild-mannered way out of the crisis. The board would admit its own errors in creating the mess, and Wolfowitz would agree to leave for the noble cause of putting the Bank’s mission first – simply because, he will contend, without contradiction from the Board, some of the staff can’t put aside their ressentiment over his achievements in his “previous position.” The president of the U.S. would submit a new name – maybe a woman, or a Latino or African-American, or maybe even some sort of non-American. The choice would be confirmed, and, the internal critics mollified to whatever degree, the Bank could go on with “getting back to ‘normal.’”

Although I don’t think even dramatic reform in the process of selecting the institution’s president will mean much in terms of the Bank’s policies, it might be worth reminding people just where “the bar” on such things is. The last time the International Monetary Fund selected a new head, beginning in March 2004, it was forced, through protests (including from eleven of its own executive directors) against the routine practice of alloting the office to Western Europe to modify its behavior. The board actually interviewed two candidates, one of whom was former IMF official Mohamed El-Erian, an Egyptian-born dual citizen, holding both Egyptian and French passports. True, this was done *after* the decision to give the job to Rodrigo Rato was made, but it was not quite an entirely meaningless gesture. What was important about this strange exercise, from the reform perspective, was the acknowledgement of some “shoulds” -- that the board should play a role in actually choosing from among several candidates, and that the winner shouldn’t have to be nominated by Europe.

The U.S. chose to ignore this precedent when George W. Bush nominated Paul Wolfowitz, but the Europeans, who compose one-third of the IMF’s board members and control a similar proportion of the votes, didn’t object. Who would expect them to in the circumstances? Procedural backtracking was not going to make any headlines with a very ugly gorilla sitting in the middle of the room. Besides, letting that little impropriety slide might mean getting to forget that partial-precedent next time ‘round at the Fund.

So, while some of the critics, including former Banksters like Robert Calderisi and former IMF chief economist Kenneth Rogoff, have focused attention on the need to democratize the selection process, the noise is going to have to get a lot louder if there’s going to be much hope of it happening.

Thus far no one remotely connected to any government has said anything about such reform. We shouldn’t expect to hear such sounds from borrowing countries, who don’t want to risk irritating anyone with potential control over their funds. Nor should we hold our breath to hear someone from a Northern country say it, since their governments all think they have a stake in the process as it is now. Japan, which has voiced discontent in the past (since it is out of the running for both the IMF and WB position, and gets the very sorry consolation prize of MIGA), may be a possibility. Or maybe a middle-income country no longer feeling very dependent on the Bank.

But it’s more likely that eveyone will be trying to humor the U.S. – let’s not irritate Bush too much more. Let him make a nicer choice this time, and we can get back to our other business.

I hope I’m proved wrong.

Posted by Soren Ambrose at 11:54 PM

Hell Hath No Fury Suzanne Rich Folsom, Paul Wolfowitz's hand-picked director of Institutional Integrity (sic), is fighting mad. She is fighting hard to shut down the internal discussion threads, citing in particular comments about her, and about INT, some apparently from her own people. Why?

She's arguing that there's "exposure" to the Bank because some of the comments are "slanderous" to INT and, ahem, to her personally. So far, EXT colleagues and Bank Legal can't imagine what she's talking about. After all, even if the Bank weren't immune from suit (which it is), that's not a reason to threaten to investigate the lot, Suzanne. And as an ethics lawyer would know, after serving breakfast to Republicans feting George Bush I's inauguration, you have to prove malicious intent, and that the allegations were false.

Good luck.

(If I were Paul Wolfowitz and his cronies, I'd be worried that shutting down the internal spaces might just take this conversation directly to the various internet blogs, making it easier for everyone on the Internet to see just what they've been up too. Bad idea...)

Posted by Deep Insider at 10:31 PM

Republican Senator According to Bloomberg, Chuck Hagel of Nebraska is the first Republican Senator to voice his opinion on the resignation of Paul Wolfowitz.

Hagel today became the first Senate Republican to suggest that World Bank President Paul Wolfowitz may have to step down. He faces a ``very difficult'' time continuing to lead the organization in light of questions about his involvement in arranging a transfer and pay raise for a companion, Hagel said.

To lead requires ``trust and confidence,'' he said. ``If that is gone, and that is squandered, then you can't lead.''

Posted by The Beaver at 08:39 PM

Someone at AEI sees through the smoke Philip Levy, resident fellow at the American Enterprise Institute (a bastion of some of Paul Wolfowitz's apologists and the origin of some shrill and uninformed WSJ op-eds), has written a thoughtful piece this morning, about corruption.

It argues that there's probably no disagreement about why corruption is a bad thing (duh) with an intriguing last paragraph

The conflict at the Bank may not be the Manichaean struggle of a flawed hero against the forces of evil that has been portrayed in the press. If both sides share the objective of promoting development as effectively as possible, the explanation for the current remarkable levels of internal strife must lie somewhere else. Perhaps the members of the Bank staff association actually mean what they say.

Yes, it goes beyond talking the talk on good governance (something Paul Wolfowitz, and his predecessors, notably Jim Wolfensohn, and Bank managers and staff do) and walking the walk, on which Paul Wolfowitz has stumbled badly. The pattern of cronyism and sweetheart deals (no pun intended, because the beneficiaries also include Kellums, Cleveland, Jackson, Folsom and some folks they've appointed, as well as Daboub and Palacio, collaborators from his "old job"), and the web of dishonesty he's spun around all this, are damaging the Bank's reputation and effectiveness on the ground.

And the Staff Association, the Bank's senior management, the GAC implementation team and several hundred more staff working on related issues, many governments and much of civil society worldwide are on record that that's why he has to go.

Nobody likes corruption.

Posted by Deep Insider at 07:31 PM

Worth reading Some good advice is being offered to the next president of the World Bank by a blogger who writes about corporate life, economics, business et al.

Dear Prospective Chairman of the World Bank,

Congratulations on your appointment to this lofty position. It is one of some prominence and power, and while you aren’t going to get seriously rich on it, a salary of $400,000 after tax isn’t chickenfeed.

Here is some unsolicited advice, which you may not need, as I suspect you have more managerial experience than your predecessor. The President went for a safer choice this time. However, for what it is worth, here are my thoughts:

Please refer to the Ecommentator blog for the list of recommendations

Posted by The Beaver at 06:34 PM

Muckraking (UPDATED) seems to know no limits. In a Forbes article Gary Weiss says, "aw, shucks, what he did ain't so bad." Better informed people disagree.

At issue is the very smallest of small potatoes. Let's dwell on it for a moment, because this anthill has been turned into an Everest by the people who want to kick him out. Did Wolfowitz bend or break the bank's ethics rules when he arranged a hefty pay increase for his girlfriend, bank staffer Shaha Riza? At the time, she was being forced to transfer to the State Department to avoid a conflict of interest. Riza didn't want to leave. She--rightly--didn't think it was fair that her career at the bank was being cut short. So Wolfowitz arranged for her transfer, and for her to get additional cash as recompense for the forced departure.

If Wolfowitz had been a rogue elephant, scheming behind everybody's back on behalf of his girlfriend, I could understand why this might be a slightly distressing incident.

It turns out there was a fair bit of scheming, and breaking of rules, and then having spokesman Kevin Kellums tell both the Washington Post and the New Yorker that the Board had approved all this. Even Wolfowitz has backed off that canard.

However, it has been known for weeks--since Richard Behar broke the story on FoxNews.com April 14--that the bank's own ethics committee "had known the terms of the settlement with Riza for at least a year." Fox found 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."

Again, found out. Not so. And now even his lawyer, Bob Bennett, acknowledged that the source of the "lost career" scenario, and the salary projection, was none other than Shaha. And the doubling of her pension (from $56,000 to over $100,000 per year) certainly helps, too. Wolfowitz, a veteran of State, and Defence, and Johns Hopkins SAIS, should certainly know how to navigate bureaucracies far more arcane than the Bank's.

Wolfowitz has already apologized for what he describes as a "mistake"--about as severe a term as one can use--so he has already shown the requisite remorse. So why not let him stay?

But since his humble apology at the Spring Meetings opening press conference, he seems to have hired an expensive lawyer, who's produced two backpeddling documents. The first said "my client has nothing to apologize for" and, the second, when that didn't work "well, let's just say that mistakes were made and everyone acted in good faith." Sounds like two attempts for a deal.

Let's not forget that in late March, word leaked out that China had threatened to stop borrowing if the anti-corruption drive wasn't watered down. "Making loans to developing countries is central to the bank's very reason for existence," FoxNews reported at the time, "so the threat to quit borrowing is a blow at its mission, and to the job security of some 26,000 World Bank bureaucrats, staffers and consultants around the world."

We will never know for sure why the China memo leaked out, and who leaked it. Buy think for a minute about some possible reasons.

China is no longer a big borrower, compared to the $2-3 bn they borrowed annually in the 90s. China could pay off its debt to the Bank and IDA in a heartbeat, if they wanted, and we all know that. If you were trying to embarrass China by suggesting that they didn't take corruption seriously, and weren't on-side with the unanimously approved GAC strategy and action plan, that would be another matter. Probably untrue, since China deals pretty firmly with corrupt officials (in general, but with significant exceptions, but other superpowers do, too). Maybe the reason they won't let INT look at corruption allegations in China is, like extraditions from Europe, the death penalty is a reason to be cautious about turning up something that might invoke criminal penalties.

And why would anyone try to embarrass China? Who would do that, and how would it serve them? Certainly not the Bank (whether you accept FOX's analysis or not).

Posted by Deep Insider at 05:18 PM

WB staff are NOT weenies According to Anne Williamson, stepping down will be a personal disaster for Paul Wolfowitz. Bush's power is spiralling south and there are no more cushy jobs available.

Clumsily, Wolfowitz has attempted what he and his neocon pals managed to do to the Pentagon and the CIA, but unlike those weenies, World Bank staff fought back, proving the old saw, "The price of privilege is eternal vigilance." In an uncharacteristically noisy string of special meetings, memos, reports, internet message boards, chat rooms, public hissing displays and press leaks, they refused to be intimidated while their institution is made a shell and re-designed from within. No "Office of Special Plans Under Construction" sign on their premises!

Posted by The Beaver at 03:53 PM

Time Magazine Goes for Substance In a break with the direction Newsweek is taking this story, the article in this week's Time' is at least going for some substance rather than merely gossip.

WB watchers will notice the re-emergence of Adam Lerrick, of Meltzer Commission fame. I find his suggestion that the Bank shrink to a small grant-making-to-extremely-impoverished-countries type institution far more palpable than Nancy Birdsall's proposed re-invigorating the knowledge bank. There's a great internal critique of the knowledge bank here, if anybody's interested. The best bit refers to David Dollar's dubious research claiming that globalization is good for the world's poor:

...We see a serious failure in the checks and balances within the system that has led to Bank to repeatedly trumpet these early empirical results without recognizing their fragile and tentative nature. As we shall argue, much of this line of research appears to have such deep flaws that, at present, the results cannot be regarded as remotely reliable, much as one might want to believe the results. There is a deeper problem here than simply a wrong assessment of provocative new research results. The problem is that in major Bank policy speeches and publications, it proselytized the new work without appropriate caveats on its reliability. Unfortunately, as one reads the research more carefully, and as new results come in, it is becoming clear that the Bank seriously over-reached in prematurely putting its globalization, aid and poverty publications on a pedestal. Nor has it corrected itself to this day.

Posted by Sameer Dossani at 03:33 PM

AP: Wolfowitz Aided Corruption in Indonesia This AP story brings up issues from the early days of this blog regarding Wolfowitz's support for the brutal and corrupt Suharto dictatorship.

It's a good story, but it's based on no new information. It begs the question of how long this story can keep the mainstream media's attention...

Posted by Sameer Dossani at 01:34 PM | Comments (0)

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Issue 4: Pattern of Misleading Information

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

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

Issue 5: Pattern of Behavior

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

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

Issue 5: Portrayal as Victim of Circumstance

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

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

Issue 6: The Real Smear Campaign

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

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

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

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

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

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

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

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

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

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

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

Posted by Deep Insider at 10:26 AM

Steal These Pics Thanks to the nice folks at DailyKos for making a bunch of graphics that will no doubt be useful for wbpres.org bloggers...

Posted by Sameer Dossani at 03:59 AM

Wolfowitz turns on Shaha Riza. Paul Wolfowitz has been using his lawyer Robert Bennett, and other "friends", to point fingers at everyone around him in a desperate and unseemly attempt to divert attention from his own role in the Shaha Affair.

After pointing fingers at ethics committee chairman; Ad Melkert, former general counsel ; Roberto Dañino ,outgoing HR vice president Xavier Coll, bank staff, excutive directors, Europe ,and what he now calls `Ambiguous' World Bank Rules ( see Here, Here, and Here). Today he finally turned on his girlfriend; Shaha Riza.

In an interview with NewsWeek, Robert Bennett, Wolfowitz' lawyer and spokesman says:

" It was Riza herself who pressed Wolfowitz to impose the generous terms of her new posting, according to Bennett. “She said she worked up the numbers, not Mr. Wolfowitz. She was outraged that she had to leave,” says Bennett."

In another telling part of the article, Michael Hirsh writes:

"Riza, says the longtime friend of the couple, is “very temperamental, very self-righteous, and very critical of the bank. It was amusing at first; then, it got aggravating after a while. You walk in the door admiring this Islamic woman who is very smart, and who was against the worst practices of the religious Islamic world. She had everything going for her. But I found her greedy in terms of power.”

Posted by A Washington source at 01:51 AM | Comments (20)

About face Truth is prevailing. So far we have read about three instances whereby someone has fudged or misrepresented the real circumstances of what really transpired in 2005.

1. Erroneous mistake: earlier assertions that the Board was kept informed were wrong
Confused with an anonymous e-mail ( that's what the spin-master or high-priced lawyer is saying any way) sacrebleu!
2.Presumptuous:Riza was never a finalist for the Communications Adviser post - she didn't have the
qualifications. Thus no need for compensation as asserted by Wolfie
3.Entitlement or Greed:It was Riza herself who pressed Wolfowitz to impose the generous terms of her new posting, according to Bennett.

The week is not over yet and after the damaging article in Newsweek, wonder if the lawyer won't start spewing some new revelations tomorrow before the Ad Hoc Panel release their findings which could prove that someone has been misleading us all along.

Posted by The Beaver at 01:15 AM

The Marion Barry Defense [UPDATED - history] It's now official. At least that's what Paul Wolfowitz's expensive lawyer-spokesman told Newsweek.

It was Riza herself who pressed Wolfowitz to impose the generous terms of her new posting, according to Bennett. “She said she worked up the numbers, not Mr. Wolfowitz.

She was outraged that she had to leave,” says Bennett. So that's why she projected a raise from GG (and not a great one at that) to GJ as the "career she'd given up." Sort of like going from private first class to two-star general in a decade. What comparators did she use?

Or course, the latest spewing of lawyerly hot air does not excuse Paul Wolfowitz's interference, or the cover-up, or the forged 'draft email' from Robin Cleveland, or the attempt to confuse sexual relationships with marriage or other registered partnerships at the Bank.

And they all wonder why the Board is not persuaded by this bluster and blather?

UPDATE: For those not conversant in Washington DC political history, the “Marion Barry defense” refers to the incident in the early 1990s in which longtime Washington mayor Marion Barry was caught accepting cocaine from a prostitute. His famous summation was “The bitch set me up.” But the comparison is not an entirely auspicious one for those who hope never to see Wolfowitz again: after descending from his throne and spending some time in rehab, Barry made a comeback and was easily elected to one more term as mayor.

Posted by Deep Insider at 12:12 AM

Under-qualified or Entitlement ? Riza didn't have the pre-requisites for the position/promotion that she thought she was entitled to. GAP has scrutinized the job vacancy requirements and has found out that Riza was under-qualified as well as not having relevant working experience let alone core competencies.

"In looking at the job posting, however, the first in a list of 11 prerequisites for the position is: MA degree with a minimum of 15 years of relevant experience, or Ph.D. and 12 years of relevant experience, in communications, journalism, political science, international relations, public affairs, marketing or other related fields.

Riza was a Gender Specialist at the World Bank for the five years previous to her appointment as Senior Communications Specialist (level G) in November 2004. She received her appointment in the field of communications six months prior to the opening of the competition for the higher-level Communications Adviser position (level H). According to her résumé, released to the Ad Hoc Committee, she has a Masters degree in social studies."

Comment submitted by e-mail
1. GAP's assertion (which you repeated) that Riza was not qualified for the GH position based on a comparison of job description and excerpts of her resume is not well informed. Leaving aside the merits of the process, the requirement for "15 years relevant experience" is (a) never limited to experience within the WB; and (b) need not be limited to communications in a narrowly defined way -- indeed, the job description says "other related fields." So on the face of things she was not ineligible on technical grounds. More telling would be the findings of the short-listing committee --- I have seen several suggestions that they judged her to be unqualified for the position, but information of that kind is very sensitive (although Xavier Coll would have access to it).

2. Wolfowitz claim that the WB's staff rules are confusing is interesting. Many seasoned insiders would agree with him on the substance. But PW had access to legal advice, and it would be extremely poor judgment (to say the least) to make decisions on such a sensitive issue without seeking such advice. Indeed, whatever one may think about PW's politics, history, or integrity, this episode has revealed an atrocious lack of judgment on his part.

3 The latest tactic --- of blaming Riza --- is also telling in a different way than has been emphasized so far. That he was vulnerable to being "bullied" by the preferences of a girlfriend just underscores the reasons why he should have remained at arms' length from negotiation in the first place! Indeed, I find this more damning than exculpatory.

4. PW's claim that the WBG has governance problems is right on the money. It needs root and branch reform --- and not limited to the treatment of ethical issues. A better selection process for President is part of the solution, but only part of the solution.

An insider.

Posted by The Beaver at 09:52 PM

Point, counterpoint An overview of Paul Wolfowitz's statements before the committee investigating his alleged improprieties, and some of the key external responses and challenges. The Rashomonian drama continues...

Embattled World Bank President Paul Wolfowitz defended himself against allegations that he secured an improper salary raise and promotions for his girlfriend at a meeting with the Board committee investigating the situation on Monday morning. His former companion Shaha Ali Riza also appeared before the committee. Wolfowitz presented both written and verbal statements.

Following are the key points from Wolfowitz's statements, as well as responses and challenges from the Government Accountability Project, Former World Bank Managing Director Shengman Zhang, Former World Bank General Counsel Roberto Dañino and Former World Bank Ethics Committee Head Ad Melkert.

Wolfowitz Statement: Before Mr. Wolfowitz came to the World Bank, he disclosed his personal relationship with Shaha Riza...He proposed that he would recuse himself from all personnel matters concerning her. (1)

Wolfowitz Statement: The issue was submitted to the Ethics Committee. The Committee decided that recusal was insufficient. [It] decided that Ms. Riza should be relocated outside the Bank, over her objections. The Committee also said that she should receive a promotion that she was due, before she was out-placed, and also that the terms of her forced departure should recognize the damage this would do to her career. (1) The statement also refers to the unprecedented nature of this situation.

  • GAP response: Riza was not actually shortlisted for a management level position, as implied by Wolfowitz's statement. In fact, she was interviewed "as a courtesy because she was 'acting' in the position." She had previously been denied a similar promotion the year prior because she lacked the required qualifications. And while seconding an employee to the State Department under these circumstances may be unprecedented, there are indeed previous cases of the need to compensate employees in this manner, which Wolfowitz could have referenced.
  • Ad Melkert response: The Ethics Committee recommended external assignment as one possible option - not the only choice. Furthermore, the Ethics Committee was not consulted on the specific terms of the external placement, including the pay increase, or conditions for annual increases and promotions.
  • Roberto Dañino response: Wolfowitz was told that Riza would need to be removed from his direct supervision through one of three options: termination, secondment or assignment to one of the Bank offices not reporting to the President (for example, the Inspection Panel). Wolfowitz furthermore refused to recuse himself from professional contact with Riza, leading to the case's referral to the Ethics Committee.

Wolfowitz Statement: The Committee members did not want to implement this plan themselves...because they said they could not interact directly with staff member situations. Instead, they told Mr. Wolfowitz, over his strong and repeated objections, that he would have to work with the Vice President of Human Resources to implement their advice. (1)

  • Ad Melkert response: The Committee gave Wolfowitz several choices for avoiding a conflict of interest. He made his own choice. "It was entirely Mr. Wolfowitz's decision to do exactly what he originally proposed not to do: to engage directly in personnel matters regarding his partner."

Wolfowitz Statement: The agreement reached with Ms. Riza was in line with other World Bank settlement agreements and was consistent with the goals that the Ethics Committee set out for treating her fairly. (1)

  • GAP response: While it is true that other Bank employees at the same level do receive similar salaries, the raises Riza received to bring her to that level directly violated Bank rules. Staff rules would have capped her two raises as 12% and 3.7%; in reality, Riza received raises of 35.5% and 7.5%.
  • Roberto Dañino response: The Committee advised that Riza be seconded externally with an in situ promotion. As far as he knew, no other benefits were recommended. "I believe PW [Wolfowitz] acted correctly when he instructed the Vice President, Human Resources (VPHR) to process with (a) the secondment and (b) the in situ promotion...I believe PW acted incorrectly when he instructed that in addition to (a) and (b), the VPHR should also (c) make an extraordinary salary increase, (d) guarantee an outstanding review for each year of secondment...and (e) guarantee a second promotion upon her return to the Bank...These benefits far exceeded, and were granted in addition to, those recommended by the EC."

Wolfowitz statement: The Committee reviewed the resolution of this matter on two occasions and determined that it had been dealt with in a manner consistent with the Committee's findings and advice. (2)

Wolfowitz statement: Mr. Wolfowitz did not violate his contract...complied with pertinent ethics rules...[and] did not hide anything. Mr. Wolfowitz believed he had to follow the Committee's advice. (11-15) "At the time, I was new to the Bank. I was just learning its culture and politics. I relied on the guidance provided by the Ethics Committee and Mr. Coll," he remarked in his verbal statement.

Wolfowitz verbal statement: "Clearly, Managing Director Shengman Zhang, who would have been the logical person for the Committee to call on to handle the matter, was compromised because his wife worked under him and had not been required to relocate." (5) 

  • Shengman Zhang response: The rules for spouses and domestic partners is different than that for sexual relationships between supervisors and staff members. "The rule for spouses in a conditional PERMISSION and the rule for sexual relationships is an express PROHIBITION...My wife and I worked at the Bank under a rule which expressly permitted it. Mr. Wolfowitz attempted to have Ms. Riza work for him in defiance of an express prohibition. These were two completely different situations."


  • Dañino: "I have now learned...that I, as General Counsel, was barred from participating [after a certain point in the negotiations}...As a consequence...the Bank did not have legal representation to assure compliance with its own legal ."
  • Dañino: "I would also like to record my strong protest at the way PW has excerpted the published documents of the EC [Ethics Committee] in the Bank's web site."
  • Dañino: "PW [Wolfowitz] acted incorrectly, not only providing the additional benefits discussed...above, but also by trying to blame the Board, the EC, the General Counsel and the VPHR when these actions became public. It is only after the inaccurate assertions of PW or his spokespersons were denied by the affected parties and when PW's express instructions in writing became public, that PW admitted he had made a mistake."
  • Dañino: "In my opinion, the matter presents not merely questions of legal compliance but also - and more importantly - questions about the moral authority of the Bank's President and the confidence he commands from the BAnk's own staff and around the world. I believe that PW made serious substantive errors by providing unauthorized benefits to a person with whom he had a relationship that created a conflict of interest...He then failed to disclose these actions and later blamed them on others, apparently trying to deceive the board, the staff and the general public. He or his spokespersons falsely suggested that his actions had been approved by the Board, the EC, the GC and/or the VPHR. Later statements have charged his accusers with political motivations. In my judgment, these actions and statements have badly hurt the morale of the staff, damaged the reputation of the Bank, and eroded his moral authority to lead the Bank."  

Check out BIC's compilation up of quotes on the Wolfowitz affair from World Bank's shareholding country representatives, US Government, former Bank officials and civil society

  • Paul Wolfowitz statements are direct quotations from his formal submission to the Ad Hoc Committee on April 30, 2007. All statements above are taken from his written statement, with the exception of the last statement, which is attributed to his verbal statement.
  • GAP, Melkert, Dañino and Zhang responses are summaries of their respective statements.


  • GAP, Melkert and Dañino statements: GAP
  • Zhang statement: worldbankpresident.org
  • Wolfowitz statements: Washington Post website

Posted by The BIC blogger at 09:04 PM

UPDATED: War of words In a last ditch to save his neck or may be anticipating what the Ad Hoc committee would propose, Wolfowitz blames Bank rules for mix up. After directing the blame on staff who know the rules of the Bank, now he has a change of heart and is pointing the finger at confusion and miscommunication-and this three days after he has been crying that he has been unfairly judged.

"Rather than attempt to adjudicate between our conflicting interpretations of the events that occurred here, the board should recognize that this situation is the product of ambiguous bank rules and unclear governance mechanisms," Wolfowitz wrote Thursday to the special panel's chief, Herman Wijffels.

"While I am prepared to acknowledge that we all acted in good faith at the time and there was perhaps some confusion and miscommunication among us, it is grossly unfair and wrong to suggest that I intended to mislead anyone, and I urge the committee to reject the allegation that I lack credibility," Wolfowitz said Thursday.

He was willing to antagonise every single member of the bank and even those whose recollections and views of the whole affair differ from his to maintain his job. Please PW, don't you realize that you did fail as a leader?. Don't put the blame on others.

Wolfie's broad-based rebuttal

Posted by The Beaver at 07:07 PM

Caught in the World Bank storm. The New Zealand Herald has picked up on a solution to the crisis at the Bank first reported on by wbp.org.

On an internet blog called worldbankpresident.org, where Wolfowitz's future holds centre stage, blogger Jeff Powell touted Wheeler as a worthy replacement for the top job.

He wrote that the appointment of Wheeler as Acting President was a sensible way forward.

"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's successor," Powell said.

"My source says Wheeler is a capable pair of hands to guide the bank through challenges on the immediate horizon."

The piece provides background info and opinion on Wheeler's time at the New Zealand treasury, saying he "plays with a straight bat".

Posted by Jeff Powell at 06:04 PM

A lie by any other name? Leading Dutch newspaper Volkskrant reported on its 2 May front page that former Dutch executive director (and head of the ethics committee when the Riza pay raise was negotiated) Ad Melkert has said that Wolfowitz has lied.

The Volkskrant was reporting on a television interview that Melkert did with the television programme Nova on the previous evening.

Dutch colleagues tell us that Melkert actually did everything within his power during the TV interview not to use the nasty 'l' word. What he did say was: "next to the truth", "that is not true", "certainly did not speak the truth", "in contradiction with the truth".

Posted by Jeff Powell at 05:55 PM

Calls for the Canucks to do the right thing. Colin Bradford, senior fellow at the Centre for International Governance Innovation, calls for Canada to take a stand and push for merit-based leadership at the Bank.

Bradford urges Canada to stop tacitly supporting the Bush administration and "play a leadership role in breaking this stalemate by throwing its weight behind governance reform, strengthening accountability and transparency, and supporting a multilateral solution to presidential selection."

Bradford's picks for a successor to Wolfowitz? "Such a list of nominees could include Paul Martin, former finance minister and prime minister of Canada, who has been an activist for governance reform in recent years and is a recognized multilateralist. But it could also include the likes of Pedro Malan, former finance minister of Brazil, Trevor Manuel, current finance minister of South Africa, Sri Mulyani, current finance minister of Indonesia, V.J. Kelkar, former executive director for India at the IMF, Stanley Fischer, former acting managing director of the IMF and former VP and chief economist of the World Bank, Jim Leach, former chairman of the US House Banking Committtee, and Tony Blair, current prime minister of the UK, for example."

Posted by Jeff Powell at 05:39 PM

Wolfowitz, RIP David Ignatius has the best Obituary of Wolfowitz I've seen to date. When the dust settles and this chapter of history is written, I suspect it will look like what Ignatius describes. Hubris. The sin of Pharaoh, the Pharisees, and the Quraish. Where have all the prophets gone?

Posted by Sameer Dossani at 05:21 PM

Beyond Wolfowitz: Governance and the World Bank OK, so after reading this David Brooks op-ed in the NYT, I've come to the conclusion that even Wolfowitz's supporters see his departure as a "when" and not an "if" question. Well, what's to stop W. from putting Rummy in his place?

Answer: nothing. As of right now, that is.

If we're serious about WB governance "reform" (and I may not be, as I believe it's an irreparable institution) some principles should be firmly in place before Wolfowitz's successor is named.

1) Transparency: How about C-SPAN at World Bank board meetings? If we had transparency, we would have known about the Riza affair years ago. We'd also know a lot more about particular government agendas on the Bank's board and who knows what else. "Transparency is an antidote to corruption," to quote one Bank governance specialist. Great, how about a dose of your own medicine?

2) Accountability: Wolfowitz is not the only staff person to violate staff policies and not all policies are good ones. Evidence is mounting that the Structural Adjustment policies of privatization, liberalization and budget austerity [10 page pdf file. pages 3-7] have been complete disasters, leading to chronic under-development and untold unnecessary suffering and hardship. The World Bank and the IMF must be held accountable for the big scandals as well as the small ones. Questions of institutional accountability and not just personal accountability are important.

3) Democracy: No institution can represent the under-privileged of the world when it explicitly dances to the tune of the most privileged. That's a lesson we should have learned from the Berlin conference of 1884. It's time to get rid of the voting share system altogether and think about mechanisms whereby the grassroots pull the strings. One model of this may be that of the Global Fund for AIDS, TB and Malaria, where grants are always applied for from affected communities through national governments.

If this proposal were to be implemented, my guess is that the institution would shrink to about 5-20% its current size. That alone would be a good legacy for Wolfowitz, I think.

Posted by Sameer Dossani at 04:25 PM | Comments (2)

Tell it as it is Margaret Nice entertaining piece by Margaret Carlson in Bloomberg. She talks about how the political ruling class in DC believes that they are above anyone ( even the dead :-) ) and the rules of the land.

Deceiving the Board?

Then there's World Bank President Paul Wolfowitz. He acts as if it's all in a mogul's day to secure a pay raise for his girlfriend that was twice as large as allowed by bank rules in her move to the State Department. She now earns slightly more than Secretary of State Condoleezza Rice.

Although Wolfowitz got the hearing he said was his due on Monday, it only made things worse. He had claimed the support of the bank's ethics committee, but its former chairman, Ad Melkert, had a different story.

He said he told Wolfowitz his girlfriend needed to be moved to a job beyond his supervision and compensated for any disruption. But he said he didn't know about, let alone approve, his negotiating her pay package. Former general counsel Roberto Danino went further, saying Wolfowitz withheld information about the ``extraordinary salary increase'' and that he may have tried to ``deceive the board.''

Since coming to the bank, Wolfowitz adopted the attitude that everyone was corrupt until proven otherwise, hired unqualified cronies, and pushed U.S. views, such as an anti- abortion agenda, on an international body.

Just Ask Clinton

This was in keeping with his record at the Pentagon. As deputy secretary of defense, he boxed out anyone who didn't cooperate in his effort to prove Iraq had weapons of mass destruction.

You're not being smeared if the accusation being raised against you is true, even if it's small compared to the other stuff you've done. Just ask former President Bill Clinton, nailed for lying about Monica Lewinsky.

Wolfowitz in his victimhood is like George Tenet, who's flogging a book, for which he got a $4 million advance, like an crybaby.

Posted by The Beaver at 04:10 PM

You broke the rules! According to the NYT the Board may take the route that PW violated the rules against conflicts of interests to pressure him to resign.

“They have had long meetings late into the night and today to ensure that they are following due process,” said a bank official briefed on the committee’s discussions, noting that its work was occurring in secret in a highly charged atmosphere throughout the bank. “There is heavy drafting and redrafting going on.”.

The article also mentioned the fact that the Ad Hoc panel will present its conclusions to PW on Friday so that he can mull over them over the week-end before they hand over their document and PW's response/rebuttal to the 24 members of the EB that will decide his fate sometimes next week.

In the mean time FoxNews is saying that "A decision by a bank committee could come as soon as Thursday on whether to clear, sanction or demand the resignation of Wolfowitz."

Posted by The Beaver at 03:15 PM

Former governors of the bank join the calls for resignation. In an open letter to the Financial Times, Five former ministers of finance and former governors of the world bank from Latin America say Wolfowitz should resign.

In their letter, the former ministers join former and current staff of the bank and say:

"What is at stake is no longer the question of favouritism or of management style. The issue now is the governance of an international organisation and the ability to carry out its mission. Mr Wolfowitz has compromised the trust in the integrity of his leadership and the credibility of the bank’s promotion of transparency and accountability in public affairs. In the interest of multilateral co-operation for the alleviation of poverty, Mr Wolfowitz should resign."

The letter is signed by:

Domingo Cavallo, Former Minister of Finance, Argentina

Rubens Ricupero, Former Minister of Finance, Brazil

Eduardo Aninat, Former Minister of Finance, Chile

Rodrigo Botero, Former Minister of Finance, Colombia

Pedro Aspe, Former Minister of Finance, Mexico

Posted by A Washington source at 01:34 PM | Comments (1)

"I'm just focusing on my salad" The Martha Stewart moments continue as Paul Wolfowitz and his entourage pretend that this will all blow over, or the Black Hawks will come to the rescue, or that the VPs and the staff will just steal off into the night. The attempts at normalcy are becoming quite amusing, if there weren't so much at stake.

On Monday afternoon, VPs (yes, and even the ones from IFC) were called together to discuss the long-term strategy of the Bank. Few considered this worthwhile, since PW isn't going to be around much longer, and even if he were, the Bank's external environment might be a lot different depending on when his fingernails give out (no IDA, no partnerships, EC sets up own funding mechanism, ...)

The discussion turned out to be a Powerpoint version of the tired outline of Chief Economist Francois Bourguigon's "economists' view of the 2030s". There has been so little progress by the team that the early March Word draft was basically copied and pasted verbatim into Powerpoint, the room darkened, and the snoozing began. Not even worth meeting, everyone agreed, except to see Paul Wolfowitz's attempts, none too convincing, to pretend that everything is OK. No one who was there could remember anything memorable, or anything from him that sounded remotely like leadership.

Meanwhile, the budget officers in operations (six regions, four networks) received a telephone call Wednesday afternoon from the President's office. (Apparently while he was being snubbed in Brussels by Gordon Brown Wolfowitz had time, smuggled out of the EC and back to the airport under a blanket in the back of an SUV, he had time to give some orders.) The ten staff, their VPs' principal advisors on budget and planning, were summoned to a meeting next Wednesday, at 4 pm, with Wolfowitz. No agenda was given, so they called the Director of Corporate Resouce Management (budget, in a less pretentious organization) and the Vice President, Corporate Strategy, Resource Management and Risk, to find out what was up. Neither gentleman's office had been told of the event. When pressed, the word came back from the 12th floor that "Mr. Wolfowitz is interested in your impressions of how the budget process works."

Well, after two years of Robin Cleveland effectively ordering cuts, leading to so much uncertainty that a budget under-run is virtually certain again this year, it's nice he's finally interested in finding out something so basic. It's sort of hard to plan for next year, if you don't yet have a notional budget envelope, two months before the fiscal year begins.

No word yet on who the President will be next week, and no word either on whether the invitees think it's worth blocking their calendars to attend a meeting that is without precedent in the Bank.

Wonder if Wolfowitz's videographer will be there, or if he will pose for stills that will command something on eBay at some point?

Posted by Deep Insider at 03:04 AM

(UPDATE) Well, they should know. Jack and Suzy Welsh have weighed in on Gonzales and Wolfowitz. You'll recall that Jack's messy divorce from his long-serving wife, Jane, after she found that Suzy's HBR "interviews" were a good deal more in-depth than normal, brought to the fore another corporate governance issue: excessive executive compensation. In this case, Shaha is not an executive, but her compensation for her off-premises non-job certainly is excessive.

Entitled "Dead Man Walking" they argue

"Unless you think you can endure a slow spiral of anxiety and awkwardness - and you do not give a darn about making your co-workers twist and squirm along with you - get out now."

"They are watching their relevance slip away, along with their hopes and dreams of making an impact. Like every dead man walking, they are discovering that jumping might have its merits. The outcome may be the same, but it is faster and hurts less."

And, it is to be noted, both Jack and Suzy resigned their jobs quickly once this was found out, to retain some honor and reputation. Just like the head of BP, the Dean of Admissions at MIT, and Randall Tobias at USAID, they were so ashamed and worried about the organizations they were previously with.

Paul, Shaha, can we send you the case studies?

Posted by Deep Insider at 08:27 PM

Shengman speaks and it's not good for Paul Wolfowitz and Shaha Riza. You'll recall that a centerpiece in their statements about why they colluded to break the rules about managing their, er, conflict of interest, was "everyone was doing it." Specifically Shaha mentioned the wife of Shengman Zhang, former MD, whose case Wolfowitz had used to bargain his own special deal. Well, Shengman's statement was posted on the Bank's internal discussion space this morning. Again, the facts are different from what Ms. Riza would have us, and the Board, believe. Shengman Zhang's statement to the Committee

Dear Mr. Wijffels:

I am writing because I understand that Mr.Wolfowitz has attempted to use my wife's employment with the Bank as a way to justify his initial insistence in maintaining ongoing professional contact with Ms. Riza and thus be exempt from Bank rules.

Please note that the rule applicable to spouses and domestic partners (Staff Rule 4.01 - 5.02) is completely different than the rule applicable to sexual relationships between a supervisor and a staff member (Staff Rule 3.01 - 4.02). The rule for spouses expressly permits them to work in the Bank under certain conditions. ( Indeed, there were over 200 staff whose spouses worked in the Bank at that time. ) The Bank's rule on sexual relationships considers them a de facto conflict of interest.

In other words, the rule for spouses is a conditional PERMISSION and the rule for sexual relationships is an express PROHIBITION.

My wife was working in the Bank before I joined the Bank as a staff member in 1995. Subsequently, as i was asked to take on more responsibilities as a Managing Director, my wife's unit came under my area of responsibility, where she held a position five levels down from mine. More importantly, in that position, I had no direct or indirect professional contact with my wife nor did I ever participate in any of the personnel decisions regarding her. The rule expressly permits spouses to work in "the same vice presidency or department, if neither supervises the other, directly or indirectly, and their duties are not likely to bring them into routine professional contact".

Although my wife and I were in full compliance with the spousal rule, in June 2005 it was brought to my attention that our case was being used by Mr. Wolfowitz as the basis to insist in him maintaining ongoing professional relations with Ms. Riza in violation of the rule applicable to sexual relationships. To avoid the manipulation of my situation and any attempt at misconstruing it as a non compliance with the rules, I immediately agreed in writing to have my wife transferred in a specific period of time, I believe it was 90 days, so as to allow her to wrap up the projects she was working on. At the end of the day, the transfer did not materialize because I had announced to leave the Bank.

I trust this clarifies the misleading attempt to equate my case to that of Mr. Wolfowitz. My wife and I worked at the Bank under a rule which expressly permitted it. Mr. Wolfowitz attempted to have Ms. Riza work for him in defiance of an express prohibition. These were two completely different situations.

Best regards,

Shengman Zhang

At least someone knew what the rules were in mid-2005 (when Robin was off hiring lawfirms to represent the Bank against Shaha and her lawyer), and they were not the ones Paul Wolfowitz and Shaha thought should apply to them.

Posted by Deep Insider at 04:48 PM

Daily Show on Wolfowitz and the Bank I'm laughing so hard I'm crying. I hate the Daily Show site, so here's a link to a blog that has both segments. The first starts on Condi Rice and then moves to Wolfowitz who, as Jon Stewart points out, is now arguing that he gave his girlfriend a raise, a promotion and guarantees of more to come to prevent a conflict of interest.

The quote from the second is so good, I'll let it speak for itself: "No, no, it’s not a conspiracy Jon. It’s merely a secretive global cabal that manipulates governments at whim and is run with no oversight by a man named Wolfowitz… who sits quietly in his office deciding who shall live and who shall die." Oh and I want a high-res version of Wolfowitz on his throne for a poster, if there are any graphic design geeks out there with sufficient skills.

Posted by Sameer Dossani at 03:53 PM | Comments (6)

Press conference starts... Michel is talking about education, but the press pack has only one interest in being here. Hilary Benn has been corralled into appearing and is staring ahead steadfastly. No eye contact from Wolfie...

Wolfie: Thanks the Commission, Brown and Benn etc., but can't remember the name of the minister from Ghana. "Nothing is more critical to economic development than the personal development of individuals through education." Lots of shuffling...

So to questions and it's a cat and mouse, with Michel pleading with reporters to stay on topic (education). Every question therefore has two parts - something about education as a starter, followed by a leap to the implications for Wolfie's job.

Most are not answered. The best the press gets is, "The Board is considering the issue. I have given my full explanation. We need to follow due process, but we must stay focused on the very important work of the World Bank... it's critical."

Benn stays tight lipped throughout and with three questions only semi-answered, they're off....

Posted by David Steven at 12:44 PM

Wolfie press conference. In Brussels for what was billed as a joint Wolfowitz, Gordon Brown and Louis Michel press conference.

Unsurprisingly, the British Chancellor made an early run for his plane, leaving Hilary Benn to mumble some excuses. The word among the assembled press is that he found the idea of sitting next to Wolfie rather more than he could stomach.

The press conference is running late, so a copy of this week's Private Eye is being passed around. Leaked minutes from a January board committee have Wolfie describing a British diplomat as a 'buffoon' who takes "orders from his country's development minister [Hilary Benn] to shovel loans out of the door and minimise conditions on them."

Just what the World Bank President needs as he desperately tries to rally supporters for his cause....

More when/if the speaking begins...

Posted by David Steven at 12:05 PM

Ignoring the obvious seems to be Paul Wolfowitz's latest ploy in the on-going saga of his high crimes and misdemeanors. Last night, as he was jetting to Brussels to discuss the fundraising gaps on Education for All, his office did a little "Mission Accomplished" not about achievements in April. The Chutzpah.

The World Bank
Washington, D.C. 20433

06:39:47 PM
To: All Bank Group Staff
Subject: Congratulations on April Accomplishments

Dear Colleagues,

I would like to take a minute to encourage everyone to join me in congratulating our colleagues in the Africa, FPD and HD vice presidencies for milestone accomplishments in the past few weeks.

First, the Africa team has moved closer to delivering on FY07 targets of over $5.4 billion while sustaining our strong commitment to sound quality and achieving real results. In April, the Board approved innovative regional projects for agricultural research in West Africa and information technology in East Africa as well as agreeing to the first major grant under our new rapid response policy to rebuild critical infrastructure in the Democratic Republic of Congo. After years of hard work, the Bujagali dam project approved last week is a good example of what we can accomplish as a Bank Group with IDA, IFC and MIGA closely collaborating to address critical energy requirements in a partner country. While April was a remarkable month with over $900 million delivered including the projects I have just described, May looks even better with over $1.5 billion already negotiated.

On April 19, the Financial Sector Strategy was discussed by the Board. There was unanimous support from the EDs and particular recognition of the staff's efforts to revise and improve the document in light of comments by CODE. The strategy clearly articulates the changing set of challenges and opportunities that the World Bank faces in financial sector development. It provides a clear vision for Bank Group support for strengthening our partners' financial systems and improving access to financial services in low income countries, particularly Africa. The strategy also articulates how staff across various Bank and IFC units will work together and coordinate closely with the private sector and other development agencies, especially the IMF. Thanks to the team for advancing this important agenda.

Finally, the HD network deserves our appreciation for successfully moving the new Health, Nutrition and Population strategy through the Board this week. It is the first update in nearly ten years launching us on a new path with a country based focus. The strategy's important new emphasis on strengthening health systems, our comparative advantage, will provide an essential foundation for the success of other health interventions including work by vertical funds. I am especially pleased the Board gave strong affirmation to the Bank's policy on family planning and reproductive health. Overall, the strategy has a strong emphasis on clear targets and results which I am convinced will improve the delivery of HNP services and reduce the misery and poverty caused by illness.

I know this is just a fraction of the work going on Bank wide so let me express my appreciation to all who work so hard to fulfill our obligations to those most in need. Thanks and keep up the outstanding work!

Paul Wolfowitz

Leaving aside the fact that most of the work for this, except taking it to the Board, was done in March before he and his lawyers began this sideshow, the prospects for May and June are somewhat less encouraging.

It's also fair to note that the Health Strategy with its "strong affirmation to the Bank's policy on family planning and reproductive health" nearly wasn't. Only the revelations about Juan-Jose's Daboob's brazen and furtive interference to remove the chapter and references led to their reinstatement, and approval by the EDs on Monday. Hopefully the Madagascar CAS, with its support for the government's sexual and reproductive health policy and programs, will be in the May "briefing", sent to us by someone else.

What he omits, as well, is that his disregard for the rule of law and his unethical behavior since he took office have inflicted incalculable damage to the credibility of the institution and to the ability of staff to deliver the FD strategy approved by the Board.

With all this going on, he didn't refer to an annual April Achievement, this year's Bank Swirled, which presaged a lot of this. But, then, he never really understood the place.

It is interesting that after communicating with staff only in carefully staged town meetings for the last two years, he's taking up the advice he was given when he arrived, to talk to staff directly.

A bit too late, alas, and something he can reflect on as he departs Brussels, via London, around 5 pm today.

Posted by Deep Insider at 10:32 AM

A New Statement from the Board of executive directors. The board has just issued the following statement to the staff of the bank

Communication from the Executive Directors of the World Bank Group

May 1, 2007—The Executive Directors met today to hear a progress report from the ad hoc group of Directors which is looking into recent allegations involving the President, Mr. Wolfowitz. In the interest of transparency and to ensure accurate public understanding of the status of the work, the Executive Directors are making this further statement.

Following the April 16 statement of the Development Committee, the ad hoc group has continued its work, taking it forward in an orderly manner, with fair process and careful deliberation.

The ad hoc group has completed an additional round of interviews with the people involved and received a number of statements. It will now draw its conclusions from the information obtained from the documents and during the course of the interviews. It will then expeditiously prepare its report and submit it to the Executive Directors for their decisions.

The Executive Directors remain very concerned about the impact on the work of the Bank Group and are committed to the earliest possible resolution of the matter.

Posted by A Washington source at 03:28 AM | Comments (6)

Xavier Coll's turn. In his statement yesterday, Paul Wolfowitz pointed a direct finger at 3 people as having been intimately involved in the Shaha pay raise and multiple promotions affair. Both Roberto Dañino , former general counsel for the bank, and Ad Melkert, former chairman of the World Bank's Ethics committee, have issued their own statements refuting Wolfowitz's assertions.

Xavier Coll, the outgoing vice president for human resources is in the unfortunate position of not being able to do so publicly since he is still working for the bank. Sources close to the board of directors have confirmed to me that Mr. Coll shared documents in his possession this afternoon with the board that also refute Wolfowitz' statement. With this, all three individuals identified by Wolfowitz, as having advised/guided him in this matter, have now offered their rebuttals and documented for the record their disagreement with Wolfowitz' statement.

I am also told that the board has now looked into Ms. Riza's employment record and full performance evaluation reviews which she selectively quoted from in her own statement yesterday.

Posted by A Washington source at 03:11 AM | Comments (3)

On the Lighter Side of things Couple of humorous blog postings that caught my eye.

The first is a letter from the dear prime minister blog urging wolfowitz to hang in there for his $400k "bonus", and commending him for living up to the republican principle of "destroying things you stand for in order to save them".

The second is a cartoon that makes exactly the same point in the way only a cartoon can.

Posted by Sameer Dossani at 02:08 AM

Anti-PW must be right Could this be what some of us have been saying? PW does not work for WB but the for the WH.

What development experience do the cronies, including PW, have that is so great?How long has Junior been President of the USA?
Well, part of the Q&A session of the State Dept of today is edifying and now we know who rules the WB !!! The emphasis is mine :
QUESTION: On Wolfowitz, the President came out yesterday backing him. He said he wanted him to stay.


QUESTION: He praised his work for advancing the eradication of world poverty.


QUESTION: But is this suggesting, on the other hand, that the World Bank wasn't
living up to its mandate and it needs someone like Wolfowitz to get it in shape?

MR. MCCORMACK: Well, he has been an agent for change at the World Bank and
they're -- you will find arguments on both sides of this. You will hear arguments from some saying, "Oh, no, perfectly fine, thank you very much, wedon't need any change here. You know, we were created 50 years ago and there's no need to change the way we do business."

On the other hand, there is an argument that while the world has changed and
you might look at it different -- incorporating some different ideas and some
different thoughts in development models, we have clearly been a strong
supporter of the World Bank and the work of the World Bank. There are a lot of
competent, experienced professionals at the World Bank who do a great job on
behalf of those who really need a lot of help in this world.

But we have also tried to work with the World Bank to try to change some of
their approaches in terms of -- give you an example, instead of just issuing
loans, provide grants, grants with certain conditions that expect something
from the recipient nations, which is very similar to the approach we have taken
with the Millennium Challenge Account. We think it's been a pretty effective
model and we --

QUESTION: This is a particular innovation that he brought?

MR. MCCORMACK: It wasn't something that Mr. Wolfowitz brought to the World
Bank, but -- and I'll let him speak for himself or his folks speak on his
behalf as to what programs he has been advocating. I'm just talking about, as the U.S. Government, some of the ideas that we have worked with the World Bank over the past six years, how to look at development, how to make the assistance that the more developed world provides -- how to make that more effective.

And I think that that's been a healthy dialogue, but at the root of it is the
idea that an institution of this importance occasionally needs to take a look
at how it does business and ask itself the question, how can we do things
better. We've made a few suggestions and -- but we're only one voice among

Posted by The Beaver at 09:50 PM

The Audacity of Shaha Riza's statement to the ad hoc committee is just breath-taking. Attorney at her side (the same woman who went after Valerie Plame and accused her of not being 'covert'), Shaha took Paul Wolfowitz's defiant tone and selective culling of the facts.

Speaking of her professional accomplishments, she left out her gig at SAIC. Since her G4 visa prohibits working other than at the Bank, it's good she has an attorney.

Quoting from her performance evaluations, she does not mention anything other than the final comments. No ratings on deliverables or behavioral assessments, and we don't even know whether she quoted past managers accurately, or in full.

Claiming discrimination for not being promoted, she does not mention that the narrowness of her geographic experience by itself would probably account for her not being cleared, either for an in-situ promotion or for a communications manager position. Presumably there are minutes of those meetings, if the Board asks to see them, as they should.

Defending the salary she was given on promotion, before she left to work for Liz Cheney, she reminds us that hers is "within the same range", omitting that it's unusual--and against the rules--to get a nearly 40% raise on promotion and a guarantee of annual raises so high and so controlled as to be improbable, year on year, for a decade. She does not mention the deal about her promotion to the next grade, or to be a Vice President if her career was impeded for a full decade.

Decrying the release of her personnel information, she seems remarkably well-informed about the spouses of two other senior staff, one of whom left years earlier (and whose spouse, by the way, a woman of some talent, spent some time outside the Bank at an international NGO in Europe). As for the source of the op-ed piece in the WSJ, I guess we know now... (NB, as well, that the author of that shrill piece was the editor of one of Conrad Black's papers. Lord Black is before a jury in Chicago for his misbehavior at Hollinger Group, on whose board sat Richard Perle, a neocon buddy of Shaha's boyfriend. The allegations against Lord Black include using corporate funds for various lavish expenses by and for his wife.)

Ah, yes, this is all sounding familiar now.

And speaking of the limbo on her professional career, how are things at the Foundation for the Future these days, Shaha? Busy?

Posted by Deep Insider at 08:52 PM

Looking Beyond Wolfowitz Reuters is carrying a piece that begins to look beyond the inevitable downfall of Wolf the second and towards the question of changing the selection process for WB presidents.

After I read the article I was left wondering what a good demand on this would be... Representation is all well and good, but any candidate for WB presidency is likely to be an ally of the U.S. and a friend to the World Bank status quo. What should the process to nominate Wolfowitz's successor look like? Leave your thoughts in the comments.

Posted by Sameer Dossani at 06:16 PM | Comments (4)

Riza's statement From WSJ- haven't had a chance to go through the document but since there are requests for it from the comments, I am posting the link:

But the following caught my eyes:
It is certainly the case that World Bank salary rates are significantly higher than the pay of national civil servants, at least in North America. It is up to shareholders to review the pay scale of the World Bank job classifications. But I should not be singled out for isolated finger-pointing when my salary level is within the same range as staff in my grade level who were not forced to leave their jobs.

Posted by The Beaver at 04:26 PM | Comments (26)

Leadership Everyone's favorite phrase in the otherwise indigestible statement Paul Wolfowitz so kindly emailed to everyone at the Bank yesterday (three hours after his press flaks had showered it on a bored Washington press corps) was his pleading closing complaint. He denounced the process, which was intended

"to create a self-fulfilling prophecy that I am an ineffective leader"

No one has to work on that. We all know what happens with him and his entourage on the 12th floor, and it's not management. It's tourism.

Posted by Deep Insider at 02:08 PM

Tongue-in-cheek Just saw this piece on Foreign Policy site about a memo written by PW to the Bank's staff wrt Insider Trading.
Would appreciate confirmation on whether this is a genuine memo :-)

Considering the first 2 comments , I would put it on the light (spoof) side of the news. Didn't know that Kenneth Rogoff could be a joker and that funny :-)

TO: World Bank Staff
FROM: Paul Wolfowitz, President of the World Bank
RE: Insider trading in “Paul Wolfowitz resignation” contracts

Dear Staff:

As long as I remain Bank President, I intend to continue enforcing my signature anti-corruption initiative at the world’s most important international development agency. My past life as Deputy Secretary of Defense under Donald Rumsfeld has taught me the importance of carrying out a plan with unwavering certainty.

In that regard, I am writing to you with a stern warning. It has come to my attention that many of you are turning your internet browsers to TradeSports.com, where there is an active market in “Paul Wolfowitz resignation” contracts for 2007. (For those of you who don’t know, this is a website where you can take bets on a variety of political events.)

I hope you understand that any attempt by World Bank Staff to buy or sell these contracts will be considered insider trading in clear violation of my anti-corruption guidelines. Your knowledge of normal World Bank personnel procedures gives you a clear information advantage in predicting whether I will be forced to resign. You must not abuse it. Please note: the Bank’s prohibition on insider trading applies not only to immediate family but also to significant others (e.g., girlfriends).

Some of you have already queried my office about whether it would still be insider trading if, when you buy “Paul Wolfowitz resignation” contracts (betting that I will leave before 2008), you also sell short “Alberto Gonzalez resignation” contracts. (This is a bet that my friend, the U.S. Attorney General, will hang on through end 2007.) My emphatic answer is no! Long Wolfowitz, short Gonzalez is only a “relative value play” that hedges out the value of loyalty to President Bush. You would still be guilty of insider trading on your Bank-specific knowledge. (And who says I don’t know enough about finance for this job!)

I hope that by now, most of you have accepted my sincere apology for the unusual pay and promotion package given two years ago to your colleague, Ms. Shaha Riza. That is, when I arrived here from my position helping to plan and manage the Iraq war for the Bush administration. I have acknowledged my mistakes (at my present job, that is), and asked for your understanding. As staff, you understand how difficult it can be to navigate the Bank’s complex rules and procedures. Please do regard my small slip as providing moral cover for poor developing-country client states that are not able to meet the good governance conditions we ask before disbursing aid.

I trust you have not been unduly influenced by the recent letter calling for my immediate resignation, signed by forty-two former World Bank managing directors, senior vice-presidents, vice-presidents, and directors. You and I can surely see through this thinly-veiled attempt to manipulate the value of “Paul Wolfowitz resignation” claims. I want to assure you that the World Bank Internal Investigations Unit will look into this matter. If any of the letter’s signatories are found guilty of price manipulation, they will be dealt with harshly. Let’s not forget who is paying their pensions …

Some of you may wonder how I can remain at the Bank when so many staff are openly seeking my dismissal. (Thank goodness most of you have tired of wearing those silly blue protest ribbons.) And what about the claim that my deputy, New Zealander Graeme Wheeler, told me I should resign at a supposedly-closed senior staff meeting last week?

Let me fill you in on the facts of life. Ever since the World Bank was founded shortly after World War II, the President of the United States has always hand-picked the President of the World Bank. That’s life; stop whining. We Americans may hold only 16 percent of the shares at the World Bank, but we insist on keeping its presidency as our birthright. So what if there might be better qualified candidates from the developing world or Asia? I am tired of hearing people say that South African finance minister Trevor Manuel would be far more effective in my job than I am. (Trevor is a good guy, but dream on. He has neither the right passport nor the right friends.)

Speaking of which: Some of you may also wonder whether World Bank staff, directors, or presidents are permitted to buy “George W. Bush Impeachment” contracts, which are also presently listed on TradeSports,com. Tricky question, but the bottom line is that your employment generally precludes political activity of this type. You will be relieved to know, however, that I have already instructed the Bank legal staff to allow exceptions to the insider trading rules for anyone who can demonstrate a truly compelling need to hedge against a change at the White House.

Thank you for your kind attention, and I appreciate your continuing to focus on your important work in relieving poverty during this unfortunate episode.

Posted by The Beaver at 01:12 PM | Comments (6476)

(UPDATED) The Sun Rises Over Washington and he's still there. Accounts differ over Paul Wolfowitz's performance at Monday's appearance at the ad hoc committee, with his two lawyers. Mr. Wijffels, the Dutch ED who is chairing the group, is proceeding very deliberately, and the best account says they will finish some interviews, complete their report and issue it Thursday. But what are people thinking?

Most believe that the huffing and puffing on the sidewalk from Paul Wolfowitz's expensive public relations officer (in a blue tie, no less) annoyed more people than it convinced.

Board members are keeping mum, but the mood on the upper floors of the building is "tense" and, most agree, the ad hoc committee was not impressed. A grim-faced Chinese ED (and member of the panel) joined the Bank's VP and Secretary (and former deputy General Counsel) and a senior legal colleague for lunch in the cafeteria yesterday.

Staff reaction on the internal wiki (bulletin board, now attached to a "Leaders and Leadership" article on the intranet news page) was dismissive. Reaction to Wolfowitz's defiant Board statement, which he kindly emailed to all staff, was hostile. Bank staff readers of the lawyers' brief (20 mind-numbing pages of legal re-hash) were in shock about the numerous holes in the story (like PW's socks), and things were heating up inside even before former GC Robert Danino's rebuttal, and assertion in his statement that Wolfowitz acted "improperly". Ad Melkert's spokesman took a similarly hard line against Wolfowitz's snarled recollections, and Melkert will speak to the ad hoc committee this morning.

The Bush/Merkel handling of the issue at their summit press conference also reflects careful timing. Bush could not be seen to distance himself from his appointee, for fear of annoying his base (including those who, like Paul Wolfowitz, think WMDs+Saddam Hussein=War to keep Al Qaeda from Kansas City) and Vice President Dick Cheney, father of Shaha's first boss at State. Bush can be forgiven--the Americans are a generous people--for forgetting that it was Jim Wolfensohn who rebranded the World Bank as dealing with poverty while Paul Wolfowitz saw the brand as dreaming of a world free of corruption and cronyism.

As Jon Stewart would say "Wolfowitz, Wolfensohn, it's all the same". Wrong.

Chancellor Merkel, it's fair to say, did not fly all this way with the European Commission luminaries to get into a spitting match with Bush, or add fuel to the home fires given that there are leadership succession issues in both France and Britain in the coming weeks. "Trust the Process" is safe, with a renewed call for transparency.

The US press is picking up "smear campaign" which is always what your US lawyer says when you want to deal. Aside from money--even more than his sweet contract says--and the removal of some aides, the reaction seems to be "just go".

Staff national groups are convening meetings on The Current Situation, the latest being the Canadians. The Harper government's stance, initially with Wolfie and Bush, has shifted to the "process being carried out" but Canadians, a liberal lot at the Bank, are dismayed with the Daboub/Wolfowitz stances on family planning and on global warming/climate change, so it should be an interesting BBL, eh?

Posted by Deep Insider at 10:27 AM

Is the Wolfowitz fight-back working? We still do not have a proper read-out from yesterday's board meeting with Paul Wolfowitz (check back here later for more). But one Bank staffmember, who prefers to conceal his identity, wrote to me saying that Wolfowitz emerged pleased and thinks he might get to hang on. The Bank staff member's reaction - he would have to leave: "if Wolfowitz stays, it will just prove to all of us that the Bank is a pure puppet of the US administration, and not the place where many of us want to spend their careers".

"Inside sources say that PW was very pleased with how his meeting with the ad hoc committee went. His lawyer's posturing, the 'I am a victim' line and threats to go public with the whole salary structure seem to be working. I was hoping the EDs would not be intimidated...but fear that they will fail to leave up to their responsibilities. If the countries don't push now, it won't happen. He'll stay. Mark my words".

He continues: "If Wolfowitz stays, it will just prove to all of us that the Bank is a pure puppet of the US administration, and not the place where many of us want to spend their careers. This organization, if PW remains as its head, will be dysfunctional and useless. I, for one, will go work elsewhere. I hope others will do the same rather than work for that hypocrite".

This comment evokes my post of 15 April and David Steven's one from way back in March 2005.

The latter - which know seems very prescient - is worth quoting in full:

Turn out the lights.
"A senior person at the world bank HR department told me today that the internal site that calculates pension benefits for world bank employees experienced its highest point yesterday in the number of hits," a correspondent tells us.

"I wonder how can Mr. Wolfowitz make his tenure a success if the most experienced staff, who qualify now for early retirement, decide to leave ?!"

"Just makes more room for all those new guys from the American Enterprise Institute," notes an emailer...

Posted by Alex Wilks at 07:40 AM

LA Times debunks LA Times Sarah Whalen's critique of former Assistant U.S. Attorney Ruth Wedgwood's LA Times op-ed defending Wolfowitz. We can learn a lot about someone by the kind of folks who rush to his or her defense...

The Whalen piece recaps the arguments of former Assistant U.S. Attorney Ruth Wedgwood. Wedgewood argues that people accusing Paul Wolfowitz are

"authors" of an "acrid affair" that's merely "a manufactured scandal."

Whalen counters: "anything written by Wedgwood should probably attach the warning that Wedgwood claims U.S. President George W. Bush's 2003 invasion of Iraq was legal" before turning to her main point: did Wolfowitz help Wedgwood get her job at the Johns Hopkins University's School of Advanced International Studies (SAIS).

Whalen states: "Wedgwood, a lawyer with no Ph.D. in political science or anything else, reportedly joined SAIS as a 'professor of law' (although SAIS is not a law school) 'and diplomacy' (although Wedgwood has never reportedly been a diplomat) sometime around 2002. In one bio, Wedgwood notes that she joined SAIS 'at the invitation' of Wolfowitz.

Sarah Whalen, an expert in Islamic Law and a photojournalist specializing in U.S. foreign policy issues also covers many of the mysteries surrounding what Shaha Riza did as a consultant in Iraq and what her jobs at State Department and Foundation for the Future consist of (as covered elsewhere in this blog).

Posted by Sameer Dossani at 03:43 AM

3 rebuttals of Wolfowitz's statement - Updated - Ad Melkert, former chairman of the World Bank's Ethics committee has issued this statement refuting Wolfowitz claims that he and the board share responsibility for the Shaha affair. The Government Accountability Project (GAP) has also issued this statement on " Misrepresentations in Wolfowitz’ Statement". Finally here is another excellent rebuttal by former Vice President and General Counsel of the World Bank; Roberto Dañino.

The points made by Dañino, who was the Bank's top lawyer at the time, are vital to understanding how Paul Wolfowitz (PW) and his lawyer are trying to beat back the Bank board Ethics Committee (EC) of the case.

"15. As indicated to the Cmte, I believe PW acted correctly when he instructed the Vice President, Human Resources (VPHR) to proceed with (a) the secondment and (b) the in situ promotion, because these two steps were in accordance with the guidance received from the EC.

16. However, as I also indicated to the Cmte, I believe PW acted incorrectly when he instructed that,in addition to (a) and (b), the VPHR should also (c) make an extraordinary salary increase, (d) guarantee an outstanding review for each year of secondment (with the corresponding top yearly salary increase), and (e) guarantee a second promotion upon her return to the Bank. I did not learn of these actions prior to my departure from the Bank in January 2006.

17. In my opinion, this was incorrect because:

(i) PW was in a de facto conflict of interest under Staff Rule 3.01, paragraph 4.02, which should have precluded him from providing these benefits to the very person who was part of the conflict;

(ii)These benefits far exceeded, and were granted in addition to, those recommended by the EC;

(iii) None of the additional benefits were disclosed to or approved by the Board, the EC or the General Counsel (I also understand they were granted over the objections of the VPHR but I was not involved in that phase); and

(iv) The Bank was effectively deprived of legal representation to review whether these benefits complied with Bank rules".

Posted by A Washington source at 01:15 AM | Comments (5)


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