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 Wolfowitz's World Bank War

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Nombre de messages : 1737
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Date d'inscription : 01/06/2005

Wolfowitz's World Bank War Empty
25042007
MessageWolfowitz's World Bank War

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Copyright 2007 The New York Sun, One SL, LLC
All Rights Reserved

The New York Sun










April 25, 2007 Wednesday









SECTION: OPINION; Pg. 7









LENGTH: 855 words












HEADLINE: Wolfowitz's World Bank War







BYLINE: KEVIN HASSETT









BODY:
The struggle over the World Bank president, Paul Wolfowitz, is
the most important moment in the institution's history since its
founding in 1944. The good news for developing nations is this: The
status quo at the bank is going to lose, no matter what happens to Mr.
Wolfowitz.The background of the story is a bad dream. When
Wolfowitz was negotiating his employment contract with the World Bank,
he disclosed that he was in a relationship with Shaha Riza, an employee
of the institution. He offered to recuse himself from all
decisions regarding her career, provided she be allowed to stay at the
bank, but an ethics committee refused his proposal. The panel decided
Ms. Riza couldn't remain employed at the bank.This ruling was
clearly a blow to Ms. Riza. She was in the middle of a successful
career at the bank and was being told she would have to give it up.
Under such circumstances, healthy compensation for the damaged party is
par for the course. Because the ethics committee failed to provide
clear guidelines on how Ms. Riza's compensation was to be determined,
Mr. Wolfowitz crafted a generous pay package as she was transferred to
the U.S. State Department.That package was likely so generous
because Mr. Wolfowitz said he feared that Ms. Riza may have litigated
over her departure. Still, the appearances were quite bad, as Mr.
Wolfowitz himself was involved in the negotiations.Last week, public calls for Mr. Wolfowitz to resign resounded from the World Bank staff.So,
we have been treated to a spectacle wherein a man asks a bureaucracy
what to do, follows its advice, and is subsequently pilloried by the
same bureaucracy. Talk about a Catch-22. I wonder where he would be
today if he had ignored their advice?Which brings up the million-dollar question: Why is the staff so eager to get Mr. Wolfowitz fired?This is where the story gets really interesting. Mr. Wolfowitz has made cleaning up corruption his primary objective at the bank, and in recent months, his efforts have made tremendous progress.His
trusted deputy, Suzanne Folsom, took over the Department of
Institutional Integrity, known as INT, and began the first serious
crackdown on corruption in bank history.Ms.
Folsom remarked on the change in a recent Web chat: "There were rumors
that in the past INT's reports weren't taken as seriously as they
should have been. I can tell you that President Wolfowitz has made it a
priority." The change has made a difference: In the past two years, 22
staff members have either been terminated or barred from being rehired,
and 11 others have been disciplined, she said.While most of the
World Bank staff are, of course, honorable professionals, these steps
introduced a level of accountability that was previously unknown and
created a serious labor-relations issue for those used to absolute job
security. At the same time, Mr. Wolfowitz obstructed the flow of funds
to countries that he viewed as corrupt, often disregarding staff
judgments. This heightened the staff feeling of resentment.In
the same chat, Ms. Folsom said the fight isn't over: "It's still a
struggle, though, to be honest. There are still a small number who
don't value the work of this department."Is it any wonder that delicious details about Mr. Wolfowitz and his girlfriend are being leaked to the press?Yet the connection to a corruption investigation raises red flags. Why are the staff and the board so worried about Mr. Wolfowitz's anti-corruption campaign? There are two main possibilities.The
first is that an unscrutinized bureaucracy in charge of billions of
dollars has, for many years, been up to no good. In this scenario, the
Folsom investigations have hit the tip of the iceberg, and something
along the lines of the United Nations "oil-for-food" scandal will
eventually emerge.The second, and more likely, possibility is
that the staff and the board simply want to avoid embarrassment over
their unwillingness to deal effectively with corruption in the past.Adam
Lerrick, my colleague at the American Enterprise Institute who was
senior adviser to the chairman of a commission that took a critical
look at international financial institutions, put it this way to me:
"The bank doesn't want to know the answers to these questions. They
view a project as completed if the money is out the door. Their goal is
to keep the money flowing, and the money flow to poor countries will
slow to a trickle if they worry about corruption."To
be sure, Mr. Wolfowitz has made some missteps. But the coordinated
effort to harm him has revealed to polite society in Washington that
something at the World Bank is seriously wrong.Polite society
has both Democratic and Republican members. The bureaucrats at the bank
might have their way and they might get Mr. Wolfowitz's head. But if
they do, they can be assured that America is going to focus even more
intently on corruption at the bank.The
effort to discredit Mr. Wolfowitz has raised the stakes immeasurably.
It seems unlikely the World Bank will ever be the same.Mr. Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist.









LOAD-DATE: April 25, 2007









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