Conflict of Interest at World Bank

[Astronuc]

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

WASHINGTON, April 12 — Paul D. Wolfowitz’s tenure as president of the World Bank was thrown into turmoil on Thursday by the disclosure that he had helped arrange a pay raise for his companion at the time of her transfer from the bank to the State Department, where she remained on the bank payroll.

In a chaotic day of revelations and meetings at a normally staid institution, Mr. Wolfowitz apologized for his role in the raise and transfer of Shaha Ali Riza, his companion, to a few hundred staff members assembled in the bank building atrium, only to be greeted by booing, catcalls and cries for his resignation.

Earlier, the bank’s staff association had declared that it was “impossible for the institution to move forward with any sense of purpose under the present leadership.” The association had helped spearhead an investigation into Ms. Riza’s transfer and raise, details of which came into the open in the last 24 hours.

The events injected a new ugliness into what had already been a bitter rift between Mr. Wolfowitz and many of the bank’s employees, who have questioned his suitability for the job as a former deputy secretary of defense and architect of the Iraq war, and have challenged many of his policies at the bank, especially those cracking down on corruption in which he suspended aid to several countries without consulting the board.

The World Bank’s 24-member executive board, the body that elected Mr. Wolfowitz to the job after he was nominated by President Bush in 2005, held hurried meetings throughout the day amid mounting speculation that it might reprimand him or ask him to resign.

What was this guy thinking? Is this just bad judgement?

 

[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.

 

[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

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.

 

[Astronuc]

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

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.

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

But the memo IS troubling, particularly -

"Should I stay on to serve a second term, (she) should return at a 'J' level, which she notes would be one year from retirement.

"Since we have created a situation which precludes normal Human Resources review of her performance, you should propose the promotion to I (or J) level would be contingent upon a review of her work outside the Bank by a committee of her peers to be appointed by mutual agreement between Ms. Riza and HR at the time.

"I understand your preference would be to offer her a financial settlement that would compensate her for both the lost opportunities related to promotion and the pain, suffering, and damage to her professional reputation that has been involved in her forced departure.

"Based on your advice, I direct you to provide her a choice between her proposal and your alternative of financial compensation in lieu of promotion to 'I' or 'J' level. The 'H' promotion should be included in either alternative.

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.

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.

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

 

[BobG]

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.

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 . The early favorite is for Ashraf Ghani to become the first non-American to ever be President of the World Bank.