# News Conflict of Interest at World Bank

1. Apr 13, 2007

### Staff: Mentor

Paul Wolfowitz left the Bush Administration to head up the World Bank as its president. Now he is in hot water!

Turmoil Grows for Wolfowitz at World Bank
http://www.nytimes.com/2007/04/13/world/13wolfowitz.html

2. Apr 13, 2007

### BobG

She's the highest paid employee of the US State Department. She makes $193,000 and Rice only makes$180,000. Interestingly, when she first went to the State Department, she worked for Elizabeth Cheney, Dick Cheney's daughter.

If it's bad judgement, it's a chronic disease. Two aids he brought along with him make even more than Riza: The World Bank, Stuck In the Mud.

Those two aids may be earning him more enemies than Riza. Kellems, Cleveland, and Wolfowitz have alienated quite a few people in the World Bank. Enemies within the World Bank probably tossed Riza out there because she'll cause more embarrassment than Kellems and Cleveland.

Last edited: Apr 13, 2007
3. Apr 21, 2007

### BobG

More and more, the "Riza scandal" looks like a hatchet job. It's appearance creates embarrassment that will cause Wolfowitz more trouble than the real issue the World Bank has with Wolfowitz.

Here's the memo from Wolfowitz to HR on the 'promotion': http://edition.cnn.com/2007/BUSINESS/04/15/wolfowitz.memo.reut/index.html [Broken]

There's some ethical questions raised by the incident, including whether it's ethical for a person's career to be effectively dead-ended just because the bank hired her boyfriend. Wolfowitz clearly felt there were better ways to handle the situation than the one chosen, but his selection as World Bank President did create at least the appearance of a conflict of interest.

The "Riza scandal" isn't the real issue, anyway. The real issue is people at the World Bank don't like Wolfowitz or his two aids, Kellums and Cleveland.

Last edited by a moderator: May 2, 2017
4. Apr 21, 2007

### Staff: Mentor

It is not necessarily a hatchet job, although Wolfowitz perhaps handed his adversaries a hatchet.

But the memo IS troubling, particularly -
While the memo does mention recusal at the very end, the preceding text seems to infer an expectation that Riza should be promoted. Wolfwitz should have structured the memo differently stating that Riza was in an unprecedented situation (fact), that he had to recuse himself (obviously because of the relationship), but he should not be specifying promotional levels. His wording seems a bit like a lawyer leading a witness.

Certainly there are those who don't like Wolfowitz or his associates, ostensibly because of ties to the Bush administration, among other things.

Last edited by a moderator: May 2, 2017
5. Apr 21, 2007

### BobG

Actually, the best option would have been for Wolfowitz to recuse himself from the settlement between the World Bank and Riza. Then he wouldn't have had to worry about the wording at all.

He took advice from the wrong person: Ad Melkert. Granted, Melkert was chairman of the bank's ethics committee at the time, but Melkert probably was never a good choice for his job.

In any event, Wolfowitz is probably finished: http://www.theaustralian.news.com.au/story/0,20867,21590994-2703,00.html [Broken]. The early favorite is for Ashraf Ghani to become the first non-American to ever be President of the World Bank.

Last edited by a moderator: May 2, 2017