The Full Story

I really haven't commented on the recent press frenzy over Paul Wolfowitz and the entire World Bank matter. Something felt wrong about the way it was being reported, but I did not have any way of sorting it out. Well, the Opinion Journal has taken the time to do so, using documents that Wolfowitz demanded be released by the board of the bank. Those papers reveal that this whole frenzy looks like an inside setup.  

The paper trail shows that Mr. Wolfowitz had asked to recuse himself from matters related to his girlfriend, a longtime World Bank employee, before he signed his own employment contract. The bank's general counsel at the time, Roberto Danino, wrote in a May 27, 2005 letter to Mr. Wolfowitz's lawyers:

"First, I would like to acknowledge that Mr. Wolfowitz has disclosed to the Board, through you, that he has a pre-existing relationship with a Bank staff member, and that he proposes to resolve the conflict of interest in relation to Staff Rule 3.01, Paragraph 4.02 by recusing himself from all personnel matters and professional contact related to the staff member." (Our emphasis here and elsewhere.)

That would have settled the matter at any rational institution, given that his girlfriend, Shaha Riza, worked four reporting layers below the president in the bank hierarchy. But the bank board–composed of representatives from donor nations–decided to set up an ethics committee to investigate. And it was the ethics committee that concluded that Ms. Riza's job entailed a "de facto conflict of interest" that could only be resolved by her leaving the bank.

Ms. Riza was on a promotion list at the time, and so the bank's ethicists also proposed that she be compensated for this blow to her career. In a July 22, 2005, ethics committee discussion memo, Mr. Danino noted that "there would be two avenues here for promotion–an 'in situ' promotion to Grade GH for the staff member" and promotion through competitive selection to another position." Or, as an alternative, "The Bank can also decide, as part of settlement of claims, to offer an ad hoc salary increase."

Five days later, on July 27, ethics committee chairman Ad Melkert formally advised Mr. Wolfowitz in a memo that "the potential disruption of the staff member's career prospect will be recognized by an in situ promotion on the basis of her qualifying record . . ." In the same memo, Mr. Melkert recommends "that the President, with the General Counsel, communicates this advice" to the vice president for human resources "so as to implement" it immediately.

And in an August 8 letter, Mr. Melkert advised that the president get this done pronto: "The EC [ethics committee] cannot interact directly with staff member situations, hence Xavier [Coll, the human resources vice president] should act upon your instruction." Only then did Mr. Wolfowitz instruct Mr. Coll on the details of Ms. Riza's new job and pay raise.

This looks like Wolfowitz was pushed into doing what the committee demanded - by the committee chairman - and is now being blamed for doing so. The article also reveals a bit about the inside politics of the bank and the fact that this looks quite a lot like an attempt to stop Wolfowitz's reforms of that institution.

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  By madmatt, Monday, 16 April , 2007 @ 11:23 am

  Nobody else gets 2 raises in a year or raises gauranteed in the future…she does because of her relationship…that is corruption no matter how you look at it.

Other Links to this Post

1. Blue Crab Boulevard » Don’t Believe Everything You Read — Saturday, 28 April , 2007 @ 7:30 pm