IFI governance

News

Wolfowitz saga turns ugly

4 May 2007

The fourth week of the drama unfolding at the World Bank over president Paul Wolfowitz’s promotion of partner Shaha Riza has raised more question marks over Wolfowitz’s judgment during his time at the Bank, further calls for his resignation, and widespread recognition of the need to end the fix which sees the president chosen by the US administration.

After hiring attorney Robert Bennett, Wolfowitz appeared before the ad hoc committee of the board which was created to investigate the allegations against him. In an about face from his stance the previous week where he committed to accept the recommendations of the board in the matter, Wolfowitz accused the board of launching a “smear campaign” against him.

His latest tactic has been to attempt to shift the blame for the way Riza’s secondment to the US state department was handled to both the ethics committee and the human resources department. This has been discredited by statements from the former head of the ethics committee, Ad Melkert, the head of human resources, Xavier Coll, and former general legal counsel, Roberto Dañino.

she said she worked up the numbers, not Mr. Wolfowitz

When this tactic failed, Wolfowitz’s lawyer first threatened to leak details of Bank staff salaries, then, in a Newsweek interview, suggested that it was Riza herself who pressed Wolfowitz to impose the generous terms of her new posting: “she said she worked up the numbers, not Mr. Wolfowitz. She was outraged that she had to leave.”

The accusations against Wolfowitz and his appointees continue to mount, including that:

  • Wolfowitz provided deliberately misleading information to the board;
  • Wolfowitz violated hiring protocols in the cases of advisors Robin Cleveland and Kevin Kellems, and in the hiring of the head of institutional integrity, Suzanne Rich Folsom;
  • General legal counsel Ana Palacio, appointed by Wolfowitz, brought under-qualified staff into senior positions in her department;
  • Managing director Juan Jose Daboub, appointed by Wolfowitz, intervened to remove mention of family planning from the Madagascar country assistance strategy, and may have done the same to the Bank’s health strategy, as well as attempting to remove reference to climate change from the Bank’s clean energy investment framework.

The mounting charges have highlighted the absence of any systems at the Bank for the board to evaluate the overall performance of the president two years into his term.

Calls for Wolfowitz to re-consider his position have now come from:

  • The World Bank staff association
  • Managing director Graeme Wheeler
  • Over 40 former Bank vice presidents and directors
  • The Bank’s own Independent Evaluation Group
  • The European Parliament
  • More than 125 NGOs worldwide
  • Influential Washington development thinktank, the Center for Global Development
  • The Financial Times, The Economist, New York Times, International Herald Tribune, Le Monde, Washington Times, and 20 other major newspapers from around the world
  • Five former ministers of finance from Latin America
  • Approximately 50,000 people in 196 countries have signed onto a petition at Avaaz.org demanding his resignation.

All of this is leading increasing numbers of commentators to call for an end to the historical artifice which allows the US to choose the head of the Bank, while the Europeans pick the head of the Fund. In an attempt to preclude US claims that there isn’t sufficient time to fix the process of selection, there have been calls for managing director Graeme Wheeler to take over as acting president until such time as an open, transparent and merit-based selection process can be put in place.

It is anticipated that the ad hoc committee will submit its report on the matter to the board today, with the board to meet and make a decision on Wolfowitz’s future at the Bank next week.