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Wolfowitz Quits World Bank
by
findingDulcinea Staff
Former deputy of defense and architect of the Iraq War Paul Wolfowitz tenders his resignation as bank head; his presidency, problematic from the start, grew increasingly troubled amid the controversy over his girlfriend's pay increase.
30 Second Summary
On May 17, Wolfowitz declared that it was in the World Bank’s best interests that he resign, effective June 30, 2007.
For several weeks, an internal investigation had considered the propriety of the transfer settlement Wolfowitz arranged for his partner, Shaha Riza. She was a bank employee at the time Wolfowitz became president in 2005. On his appointment, bank officials decided Riza would have to leave the bank's employ.
In his resignation statement, Wolfowitz expressed satisfaction with the bank’s assessment that he “acted ethically and in good faith.”
The World Bank concluded that “a number of mistakes were made by a number of individuals.”
Wolfowitz had found Riza a new position outside the bank, at the U.S. State Department. Along with that transfer came a $60,000 raise. Critics said that the award of such a favorable deal breached the bank’s code of conduct.
However, in 2005 Wolfowitz had asked that he not be involved in negotiating Riza’s settlement. The World Bank refused that request.
From the word go, the appointment of Rumsfeld's former deputy as bank president had been unpopular with many of the staff. Some employees have said that his dictatorial behavior compromised the bank's operation.
Wolfowitz’s defenders argue that he reduced wasteful bureaucracy. His supporters say he is now being punished for his close ties to the Bush administration.
For several weeks, an internal investigation had considered the propriety of the transfer settlement Wolfowitz arranged for his partner, Shaha Riza. She was a bank employee at the time Wolfowitz became president in 2005. On his appointment, bank officials decided Riza would have to leave the bank's employ.
In his resignation statement, Wolfowitz expressed satisfaction with the bank’s assessment that he “acted ethically and in good faith.”
The World Bank concluded that “a number of mistakes were made by a number of individuals.”
Wolfowitz had found Riza a new position outside the bank, at the U.S. State Department. Along with that transfer came a $60,000 raise. Critics said that the award of such a favorable deal breached the bank’s code of conduct.
However, in 2005 Wolfowitz had asked that he not be involved in negotiating Riza’s settlement. The World Bank refused that request.
From the word go, the appointment of Rumsfeld's former deputy as bank president had been unpopular with many of the staff. Some employees have said that his dictatorial behavior compromised the bank's operation.
Wolfowitz’s defenders argue that he reduced wasteful bureaucracy. His supporters say he is now being punished for his close ties to the Bush administration.
Headline
In response to the controversy regarding his girlfriend's relocation settlement, Wolfowitz will stand down as president on June 30, 2007. The World Bank Staff Association greeted Wolfowitz’s resignation as “the necessary thing,” but said that he should leave his post immediately.
Source: CNN
The NPR take on the Wolfowitz story includes the full text of the World Bank Group judgment and the bank president’s resignation statement, as well as audio files.
Source: National Public Radio
Reactions
Before Wolfowitz’s resignation, President Bush seemed reconciled to that fact that his nominee would be leaving the World Bank. “I regret that it’s come to this,” Bush said on April 17. “I believe all parties in this matter have acted in good faith.”
Source: Forbes
In the wake of Wolfowitz’s resignation, Oxfam issued a statement saying that America should no longer be allowed to pick the World Bank president. The United States claims that right as the organization's largest shareholder.
Source: The Guardian
Key Players
Paul Wolfowitz became 10th president of the World Bank Group on March 31, 2005. Prior to this appointment, he spent more than 30 years as a public servant, ambassador, and educator.
Source: The World Bank: Paul Wolfowitz
“Wolfowitz has an abiding interest in the Islamic world … Wolfowitz’s critics sometimes portray him as an unquestioning defender of the Israeli government, and yet he has publicly expressed sympathy for the plight of the Palestinians.” The New Yorker carried a biographical essay on the outgoing World Bank president on April 9, 2007.
Source: The New Yorker
Background
On May 3, Wolfowitz submitted a ten-page document to the tribunal stating that he had to provide sufficient compensation to Ms. Riza “as a settlement of her potential claims” in the event she decided to sue over being relocated.
Source: The New York Times
The World Bank’s Independent Evaluation Group published its report on the operation of the World Bank on April 24. The IEG determined that trust and credibility were being eroded by three interrelated problems: an increasing lack of transparency; serious breaches of internal HR policies; and “parallel lines of authority.”
Source: The Financial Times
Wolfowitz’s defenders claimed that the IEG is not an independent group, as it is made up of World Bank employees. However, the list of signatories suggests that criticism of the Bank’s head is not limited to the non-American left. Roughly one-fifth of the signatories are American, and they include “free-market advocates such as Peter Woicke and Gerard Caprio.”
Source: The Financial Times
In an open letter to the Financial Times, published on April 22, former senior members of the World Bank called for Wolfowitz’s resignation. What the authors objected to was not so much the Riza controversy, nor the president’s focus on corruption, but that the latter policy “was implemented with no consultation, and little transparency or apparent consistency.”
Source: The Financial Times
As well as publishing pages from Shaha Riza’s contract, Vanity Fair claims that a Pentagon contractor employed her to research the rebuilding of Iraq. That was in 2005, when Wolfowitz was still number two at the Pentagon. Apparently “bank staffers are prohibited from taking such assignments without bank approval.”
Source: Vanity Fair
Reference Material
The Allied Powers founded the World Bank after World War II. It is the world’s largest development organization, lending around $25 million a year to developing nations. Critics say the conditions attached to loans unfairly favor the First World and foist inappropriate market regulations on the Third World.
Source: Knowledge News
Opinion
Wolfowitz reputedly hated the Byzantine bureaucracy of the World Bank, and was determined to stamp out corruption and waste. At least so say his friends. Less supportive voices judge that his single-minded dictatorial style showed a lack of essential diplomatic skills. The International Herald Tribune weighs up the arguments.
Source: The International Herald Tribune
“To find all of this intelligible or fair, you have to be able to say it’s completely right that a senior woman at the World Bank is told she loses her job when her partner is made the president. I can’t see how––in any sense, legal or moral––that is fair, and if I had been her, I would have sued,” says author and political pundit Christopher Hitchens.
Source: ABC Lateline
According to Guardian columnist Ruth Sunderland, the pay deal for Shaha Riza was never the issue in Wolfowitz’s ouster, but only a convenient opening for his enemies. As well as disliking his management style, his connections to President Bush, and his part in the Iraq war, his opponents also resent the U.S. domination of the World Bank.
Source: The Guardian
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