Wolfowitz Struggles to remain as WB President
Petition to sack Wolfowitz here!
Paul D. Wolfowitz’s struggle to remain as president of the World Bank was dealt a setback on Sunday when a group of two dozen of the world’s finance ministers and leaders of other international organizations delivered an unusually public rebuke of his leadership, expressing “great concern” about the institution’s future and the need to preserve its credibility and the morale of its staff.
Mr. Wolfowitz, responding at a news conference, vowed to stay on at the bank, however, saying that he too cared about the bank’s ethical standards. “Look, I believe in the mission of this organization, and I believe I can carry it out,” he said.
The extraordinary exchange between Mr. Wolfowitz and the ministers and officials on a global committee that oversees both the bank and the International Monetary Fund, deepened the uncertainty over Mr. Wolfowitz’s future, which was thrown into doubt by the disclosure that he played a direct role in granting a pay raise and promotion to a female companion when she was transferred in 2005.
The events of the day, in which top officials took time out from discussing issues like poverty, set up a clear impasse between Mr. Wolfowitz and the leadership of the bank, as represented by what seemed to be most of the world’s finance ministers and most of the members of a separate 24-member executive board that governs its day-to-day affairs.
The rebuke of Mr. Wolfowitz came in the form of bureaucratic language in a series of sentences in the board’s communiqué that asserted “the current situation is of great concern to all of us,” an unusually blunt statement for a circumspect institution.
“We have to ensure that the bank can effectively carry out its mandate and maintain its credibility and reputation as well as the motivation of its staff,” the committee said. “We expect the bank to adhere to a high standard of internal governance.”
Though the language was indirect, the message it sent was unmistakable, according to officials who have been meeting in Washington the last few days. “Words like ‘concerned,’ ‘credibility’ and ‘reputation’ are pretty unprecedented for a communiqué from a place like the World Bank,” said an official involved in the drafting of the statement.
At issue in these statements was a crisis arising from Mr. Wolfowitz’s involvement in decisions to transfer his companion, Shaha Ali Riza, to a new job and give her a raise.
Officially, Mr. Wolfowitz and the bank are now to wait for a full report by the bank’s board on his leadership and charges of favoritism in dealing with Ms. Riza, who was employed at the bank until 2005. But bank officials said that in delaying a finding on the matter, the board seemed to be buying time for Mr. Wolfowitz to consider resigning.
European officials close to the bank said that if anything, Mr. Wolfowitz’s apparent dismissal of the criticism on Sunday would increase the determination of the wealthy European donor nations of the bank especially Britain, France and Germany that he needed to step aside for the good of the bank.
Several European officials said their concern now was that Mr. Wolfowitz would not be able to carry out the job of raising $30 billion over the next three years for the International Development Agency, the arm of the bank that provides low-cost loans and assistance to the world’s poorest countries.
Mr. Wolfowitz signaled that raising the $30 billion was already a major challenge over the last year, not because of recent events. “The donors are now unfortunately in a position of not fulfilling their promises,” he said. Concerns about the future of this money were conveyed during the weekend to Treasury Secretary Henry M. Paulson Jr., European officials said.
“This was a point conveyed in several meetings,” said a bank official. “I think Paulson knows this.”
Late Sunday, a Treasury spokeswoman, Brookly McLaughlin, said Mr. Paulson “is counseling all parties to allow the process to proceed in a fair and respectful manner.”
Mr. Wolfowitz’s comments came after a top steering committee of the bank and the International Monetary Fund declared that “the current situation is of great concern to all of us.”
“We have to ensure that the bank can effectively carry out its mandate and maintain its credibility and reputation as well as the motivation of its staff,” the committee said. “We expect the bank to adhere to a high standard of internal governance.”
Bank officials and others close to the executive board said they hoped that Mr. Paulson, who they said mostly listened to complaints about Mr. Wolfowitz over the past three days and counseled patience on his future, would play a crucial role in persuading him to step down eventually.
A senior European official in the meetings said this was possible because Mr. Paulson went along with a communiqué that criticized Mr. Wolfowitz.
By all accounts, Mr. Wolfowitz spent the weekend churning through meetings with a determination to project confidence that he could weather the crisis.
“I think he has just wanted to tough it out,” said a bank official who watched him. “He’s clearly hoping that once everyone leaves town, he can go on and that all this will fade away. That has not happened and it is not going to happen.”
Mr. Wolfowitz made his public comments about intending to stay on at a news conference with Rodrigo de Rato, the head of the International Monetary Fund, and the chairman of the steering committee, Agustín Carstens, the finance minister of Mexico.
Each time he tried to steer the discussion into the importance of eradicating poverty in Africa and elsewhere, he was brought back to questions about whether he could lead an institution that, fairly or not, was in virtual revolt against him.
In response, Mr. Wolfowitz said that he agreed with the communique’s conclusion that the integrity of the bank was important and that he, like the bank’s policy supervisors, would await the conclusions of the bank board.
“The board is looking into the matter, and we’ll let them complete their work,” he said with a pained smile.
An earlier indication of Mr. Wolfowitz’s defiant approach came Saturday night, when he sent an e-mail message to World Bank employees with a link to selected documents that came to light on Friday relating to his handling of the case of Ms. Riza.
The documents he referred to showed that Mr. Wolfowitz had wanted to remove himself from handling Ms. Riza’s transfer and raise but was forced to make the arrangements himself because top lawyers and ethics officials at the bank said they did not want to get involved.
The e-mail seemed to increase the anger on the bank board and staff. A top official involved in the board meetings, which occurred on and off throughout the weekend, said, “It has backfired.”
That was also the view of others who more bluntly have called for Mr. Wolfowitz’s dismissal.
“We have not heard anything that will change our minds,” said April Cave, chairwoman of the association that represents most of the bank’s 7,000 employees in Washington. “He has apologized, but he hasn’t shown how he can restore trust at the bank.”
Some bank officials said that as a practical matter, Mr. Wolfowitz’s future may be decided by a complicated interplay of Bush administration and European politics.
The antipathy to his leadership is especially high in Britain, France and Germany, they said. The British chancellor of the exchequer, Gordon Brown, who is expected to succeed Tony Blair as prime minister as early as this summer, is under pressure from his own political base to stand up to the United States more than Mr. Blair has.
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