World Bank Irony Watch: Anti-corruption Crusader Wolfowitz Apologizes for Inappropriate Influence

by Peggy McGuinness

Paul Wolfowitz, who, according to an intriguing profile in this week’s New Yorker, has made the fight against government corruption a center piece of his tenure as World Bank President, was forced to issue an apology for arranging a job for his “significant other” (a World Bank employee) at the State Department. As the NYTimes reports, Wolfowitz’s favorable treatment may put him in hot water with the Bank’s board:

“I made a mistake, for which I am sorry,” Mr. Wolfowitz said in a statement on the World Bank’s Web site. He said that in retrospect he should have “trusted my original instincts” and stayed out of the job negotiations involving the woman, Shaha Ali Riza.

The transfer of Ms. Riza from the World Bank to a higher-paying job at the State Department has caused resentment among employees of the World Bank, and at an unfortunate time. The controversy threatens to overshadow the annual meeting of the World Bank and its sister organization, the International Monetary Fund, in Washington this weekend. The yearly event draws finance ministers from hundreds of countries.

Mr. Wolfowitz seemed to be throwing himself on the mercy of the World Bank board members, who are meeting today. “I will accept any remedies they propose,” he said in his statement. He had promised earlier to “cooperate fully” with the board’s review of the episode.

“I cannot speculate on what the board is going to decide,” Mr. Wolfowitz told The Associated Press.

But the World Bank’s staff association said today that Mr. Wolfowitz had “compromised the integrity and effectiveness” of the bank and “destroyed the staff’s trust in his leadership,” and so should resign, The A.P. said.

Mr. Wolfowitz, 63, has said that he arranged for Ms. Riza’s transfer because World Bank rules bar the institution’s employees from supervising anyone with whom they have a personal relationship, and that he consulted the bank’s executive board. But the transfer — and Ms. Riza’s salary, which the Government Accountability Project, an independent watchdog group, said is $193,500, about $10,000 more than Secretary of State Condoleezza Rice’s — only fueled more resentment among bank employees.

Here is what Wolfowitz said a year ago about the problem of corruption and the “good governance” solution:

In the last half-century we have developed a better understanding of what helps governments function effectively and achieve economic progress. In the development community, we have a phrase for it. We call it good governance. It is essentially the combination of transparent and accountable institutions, strong skills and competence, and a fundamental willingness to do the right thing. Those are the things that enable a government to deliver services to its people efficiently.

Will the World Bank board apply the same standard to its president that it applies to the leadership of developing countries?

10 Responses

  1. Can somebody tell me what Wolfowitz did that was wrong. They developed a relationship, they could not work together, so he helped her get another job. I don’t understand what the big fuss is about, other than thirst for a neo-con scalp.

  2. I think “trusting his original instincts” is probably what got him into trouble in the first place.

  3. From the Washington Post:

    World Bank President Paul D. Wolfowitz publicly apologized yesterday for the “mistake” of personally orchestrating a high-paying job and guaranteed promotions for a bank employee with whom he is romantically involved, as new details of his role in the arrangement emerged and staff members angrily demanded his resignation.

    Wolfowitz attempted to address about 200 staffers gathered in the bank’s central atrium but left after some began hissing, booing, and chanting “Resign. . . . Resign.” He had approached the gathering after holding a news conference in which he said, “I made a mistake for which I am sorry.”

    Bank insiders confirmed reports from the bank’s staff association that Wolfowitz directed personnel officials to give Shaha Riza, his longtime companion, an automatic “outstanding” rating and the highest possible pay raises during an indefinite posting at the State Department, as well as a promotion upon her return to the bank.

    Until yesterday, Wolfowitz and his aides had insisted that “all arrangements concerning Shaha Riza were made at the direction of the bank’s board of directors.” Bank sources said, however, that neither the board nor the ethics committee was aware of the terms of the final agreement.

  4. Oh this is really just lovely.

  5. I was amazed how careless he was about the whole thing, as if no one was going to notice or get upset.

    Regarding the post by “Confused” I think this would be a minor deal if her new post was in private industry, but it appears he was pulling governmental favors in the State Department.

  6. اتمنا ان يكون كل شيء على ما يرام شكرا لكم.”>

  7. اكبر الواقع المسيحية حطم .

  8. + + +

  9. Please.

    They both knew, or should have known for the amount of money our government has been paying each of them, that their relationship would spill over when he as appointed chairperson of the bank.

    He should have stayed out of her job search for a new position.

    She should have concentrated on areas where there wasn’t a conflict. Here’s an idea: what about the private sector?

    Why should she benefit from his appointment?

    They both, if they are as smart as they both say they are, should have known what they were doing wasn’t within the boundaries of current governmental policy.

    Another example of the elitist attitude of the Bush Administration.

  10. Thanks for posting the Washington Post article, it makes it clearer what the true conflict of interest was in this situation.

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