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As the World (Bank) Turns

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from: Bonnie Goldstein

Posted Tuesday, April 17, 2007, at 2:11 PM ET

Paul Wolfowitz was never a popular choice for president of the World Bank. When President Bush gave him the job in 2005—a longstanding "gentleman's agreement" permits the U.S. government to make the selection—the bank's staff and member nations resented being led by a major architect of the Iraq war. Bush had earlier passed over Wolfowitz to run Iraq's Coalition Provisional Authority because (Bob Woodward writes in State of Denial) "Wolfowitz did not have a strong reputation as a manager. … [H]e could barely run his own office." Yet the president was perfectly happy to put Wolfowitz in charge of an international agency that employs 13,000 people and provides reconstruction loans and grants of roughly $20 billion a year to the world's most desperately poor nations.

Two years later, Wolfowitz is in serious danger of losing his job because of a small but intractable conflict of interest that he resolved unsatisfactorily when he first arrived at the bank. A woman Wolfowitz was dating, Shaha Riza, happened to be a World Bank employee. The bank has strict nepotism rules that forbid one person to have authority over another if the two maintain a personal relationship. (Wolfowitz was married for more than 30 years to Clare Wolfowitz, but they separated in 2001, before he began dating Riza.) To avoid a conflict of interest, the bank transferred Riza, over her objections, to a temporary duty station at the State Department. Perhaps to make it up to her, Wolfowitz insisted that the terms of her move and eventual return to the bank be extremely generous.

In late March 2007, details of Riza's hefty salary raises were leaked via the Government Accountability Project, a pro-whistleblower nonprofit. Around the same time, Donald L. Barlett and James B. Steele revealed in Vanity Fair that Riza had performed work for a private defense consultant; further investigation by GAP established that Riza had not received the World Bank's permission to do so, as is normally required. World Bank staff members were outraged, and the World Bank Group Staff Association's internal Web-based bulletin board filled up quickly with angry anonymous posts. Wolfowitz at first tried to bluster his way through the scandal, but by mid-April, his job was hanging by a thread.

Alison Cave chairs the World Bank Group Staff Association. In the remarks below and on the following page, she calls on Wolfowitz to resign. Cave also asks the bank to make public a Wolfowitz memo to the vice president of human resources spelling out terms for Riza's future employment ("outstanding" performance ratings, automatic promotion on return), along with a copy of the formal contract negotiated with Riza's attorney. In the meantime, if anyone would care to leak these documents, you know where to find me.

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hot document
entries
12
from: Bonnie Goldstein

Posted Tuesday, April 17, 2007, at 2:11 PM ET
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Bonnie Goldstein is a former special investigator to the U.S. Senate and investigative producer for ABC News.
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