Libertarian Leanings

The U.N. Development Program

According to Claudia Rossett, the two World Bank officials with most to gain by ousting Paul Wolfowitz were critics, Mark Malloch Brown and Ad Melkert. 

Whatever else the ousting of Wolfowitz has achieved, it has done plenty to distract from the North Korea Cash-for-Kim scandal that just four months ago was threatening to engulf the United Nations agency piloted for the past eight years first by Malloch Brown and now largely by Melkert.

As with the Oil-for-Food scandal, it's unlikely there will be any serious reporting on this in the mainstream press.

Wolfowitz resigns

The Washington Post has a lengthy analysis of Paul Wolfowitz's resignation from the World Bank.  Written by Karen Young with help from the usual anti-administration character assassins, Walter Pincus and Thomas E. Ricks, the Post article concludes that Wolfowitz really brought it on himself.

Another former colleague who served with Wolfowitz in four administrations said that "the kinds of problems he got into were predictable for anybody who really knew Paul." Speaking on the condition of anonymity, the source voiced admiration for his intellect but said Wolfowitz "couldn't run a two-car funeral."

The bank's accusations of nepotism and unethical behavior, contradicted by its own internal memos, got barely a mention.  Their validity got tacit acceptance.  At the Post they seem to view the World Bank and its entrenched staff as a champions for the downtrodden.

Everyone agreed with Wolfowitz's emphasis on stopping corruption in the governments that received World Bank loans.

Sure they did.  The truer picture can be found at the Wall Street Journal. 

We've said from the beginning that the charges against Mr. Wolfowitz were bogus, and that the effort to unseat him amounted to a political grudge by those who opposed his role in the Bush Administration and a bureaucratic vendetta by those who opposed his anti-corruption agenda at the bank. That view was vindicated by yesterday's statement, which showed how little the merits of the case against Mr. Wolfowitz had to do with the final result.

Mr. Wolfowitz "assured us that he acted ethically and in good faith in what he believed were the best interests of the institution, and we accept that," the directors said, thus rejecting the findings of a rigged investigating committee that had ignored key evidence. The most damning judgment the directors could muster is that "a number of mistakes were made," including by the bank's own ethics committee that had refused to let Mr. Wolfowitz recuse himself from matters involving his girlfriend, Shaha Riza.

In other words, this was all about politics. And all that mattered to Mr. Wolfowitz's accusers was to be rid of him, whatever the pretext or methods.

At the bank and at the Post, folks seem quite content with that outcome.  For the bank bothersome anti-corruption measures may fall by the wayside.  For the Post anything that reflects poorly on the Bush Administration, whether true or not, is welcome news, destined for the front page.

Wolfowitz makes his case

Here is an excerpt from the statement by Paul Wolfowitz to World Bank officials who are trying to force him to resign from his position as President.

I sincerely believe the ethics committee wanted me to take responsibility to resolve the matter rather than handling it themselves.  After receiving the committee's informal advice in late July, 2005, that I should instruct Mr. Coll to carry out the terms of Ms Riza's external placement and promotion, I objected to being involved in any way.  The response I got, from Mr. Melkert, is reflected in his memo of August 8, 2005 which is Tab 3 of your packet.  In it he tells me that "The EC cannot directly interact with staff member situations, hence Xavier [Coll] should act on [my] instructions."  The memo did not say that I should or could delegate the matter to Mr. Coll.  It said he should act on my "instructions."  It did not suggest that I could delegate it to anyone else.  The memo also said I should tell Mr. Coll to meet with Ms. Riza as early as possible, that Mr. Coll should report back to me, and that I should report back to the Ethics Chair.  And all this was to be done in a matter of days.

Another member of the committee,  Otaviano Canuto, was asked what this instruction to me meant.  He says it meant, "Get it out of the way.  Do it."

Seven weeks after Ms. Riza resigned, the committee wrote Wolfowitz another letter stating that the outcome was "consistent with committee findings and advice."  After the Ethics Committee received an anonymous email about the matter Wolfowitz received another letter from them which concluded,

...the allegations relating to a matter which had been previously considered by the committee did not contain new information warranting any further review.

Wolfowitz makes a strong case in his statement, but I think the outcome is pre-ordained.  Exhibits are here.

Indiscreet

According to the World Bank ethics committee report, the most serious transgression by Paul Wolfowitz was defending himself.

At the surface is Wolfowitz's role in arranging a job transfer and pay raise for his longtime companion, Shaha Riza, who worked in the bank's Middle East department at the time he took over as President. The World Bank ethics committee decided that situation presented a conflict of interest, and that a transfer for Riza should be arranged. 

It was a task from which Wolfowitz had asked to be recused, but his request was denied.  But after instructing him to take charge of the situation personally, the committee said he should have delegated it and that the raise given Riza was excessive.

The Washington Post seems to be on the side of the bank.  In its description of events it presents Wolfowitz as seeking to place blame on others. 

Wolfowitz effectively blamed Riza for his predicament as well, saying that her "intractable position" in demanding a salary increase as compensation for her career disruption forced him to grant one to pre-empt a lawsuit.

But according to the bank's investigating committee, the real sin is that Wolfowitz has defended himself.

The report reserved its sharpest judgment for the public struggle Wolfowitz has waged to save his job in recent weeks, criticizing the bank's probe in the press.

"It has turned an internal governance matter into an ugly public relations campaign," the report said, asserting that in unleashing "public attacks," Wolfowitz "denigrates the very institution he was selected to lead."

How unforgivable that public charges of corruption and nepotism weren't refuted with a little more discretion.

Size matters

According to the Wall Street Journal (subscription required), a special World Bank panel has found that Paul Wolfowitz breached ethics rules when he secured a generous compensation package for his girlfriend, Shaha Riza. 

At issue is Mr. Wolfowitz's personal relationship with Ms. Riza. To avoid any conflict of interest, Mr. Wolfowitz initially proposed to recuse himself from personnel matters regarding her. The board's Ethics Committee rejected that proposal in favor of an arrangement under which Ms. Riza was detailed to work at the State Department. As part of the bureaucratic give-and-take over the transfer, Mr. Wolfowitz dictated the terms of her compensation, including pay increases and promotions.

Mr. Wolfowitz has said he acted in good faith, after the board's Ethics Committee had asked him to deal with Ms. Riza's job situation. Critics say Mr. Wolfowitz should have left the final details of the transfer to others.

In other words, the Ethics Committee required Wolfowitz to arrange her transfer and her pay raise, then complained after the fact that the raise she got was too big.