Wolfowitz Hangs On Despite Ethics Charges
In his nearly two years as World Bank president, Paul Wolfowitz has been under sharp and repeated attack from many staffers in the international financial institution.
Some were critical of his reliance on a close-knit group of Republican aides, while others viewed his anticorruption program as a mission that was not consistent with the bank's role as an antipoverty institution. Some even were critical of his former role as a Defense Department official in planning the U.S. invasion of Iraq.
Now, in the wake of the furor over his decision to arrange a pay raise and promotion for his companion, Shaha Riza, Wolfowitz's days as president are likely numbered, despite the aggressive counterattack launched by Wolfowitz himself, and his allies.
One significant indicator: the resignation earlier this week of Kevin Kellems, Wolfowitz's right-hand man. Kellems, who also worked with Wolfowitz at the Defense Department, issued a statement saying that it was "difficult to be effective'' in "the current environment.''
The bank's 24-member executive board, which usually moves at a glacial pace, put together an ad hoc committee to review Wolfowitz's dealings with Riza. That panel concluded, in a report delivered to Wolfowitz a few days ago, that he violated ethics rules in arranging the pay raise and promotion.
Bank documents show that Riza was transferred to the State Department and given a healthy raise after Wolfowitz took over the presidency in mid-2005. Wolfowitz has pointedly noted that he sought to recuse himself in dealing with Riza's personnel issues but was directed by the board's ethics committee to handle the matter.
Wolfowitz has retained a prominent Washington attorney, Robert Bennett, a tough-minded advocate who issued a statement Tuesday afternoon lashing out at the ad hoc committee's conduct.
Bennett said the panel delivered more than 600 pages, including its report, to Wolfowitz on Sunday night and gave him only a short time to respond. Bennett also complained that the panel had failed to "control leaks about its draft conclusions."
The panel's report, and a response from Wolfowitz, will be reviewed by the full executive board. Among other possible actions, the board could fire him or ask him to resign–in either case, an extraordinary development for so traditionally cautious an entity.
The pressure is clearly building for Wolfowitz to step down.
Some bank officials and executive board members believe that he can no longer effectively lead the bank, which dispenses more than $20 billion annually to needy countries. The executive board represents the 185 member nations that make up the bank.
Traditionally, the United States nominates the bank's president, notes one bank insider, asking not to be identified.
"The Europeans are still trying to find a graceful way for him to leave," says the insider. "The Europeans are saying, 'We will not mess with your right to nominate the president of the bank, but let's get this done.' "
Despite all the controversy, the White House continued on Tuesday to support Wolfowitz.
Whatever happens in the next few days, Wolfowitz's vaunted anticorruption program could be in deep trouble. The program has been the subject of intense criticism; many bank officials and staffers have felt that Wolfowitz was selective in the countries he targeted for investigation. And some insiders argued that his investigations into staff misconduct made it appear as if the staff was rife with corruption.
Wolfowitz made fighting corruption a hallmark of his presidency, pumping more money into the unit and hiring more investigators. But the internal investigative unit, known as the Department of Institutional Integrity, was actually created by Wolfowitz's predecessor, James Wolfensohn. Although she was initially brought to the bank by Wolfensohn, the head of the unit, Suzanne Rich Folsom, an ethics lawyer, could be ousted if Wolfowitz leaves, some bank officials believe. In January 2006, Wolfowitz named Folsom to run the integrity unit, and bank staffers widely complained that she got the appointment because she was a Republican.
A Wolfowitz departure could also mean that another of his top aides, Robin Cleveland, would be out. She came to the bank with Wolfowitz and has been under harsh criticism for her brusque and aggressive nature. A sign of the times: Cleveland was recently moved to a smaller office on the 12th floor of the bank's opulent Washington headquarters–a symbolic move to show that her influence was waning, according to bank sources.
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