I'm not going to shed any tears for Paul Wolfowitz. He was a smart guy with a lot of ideas, some good and some bad. But he was a neocon and an imperialist and responsible for some very questionable policy decisions during his time in the White House.
Like many of the neocons he had a lot to offer if you could just overlook his interest in taking over the world. But that's a pretty hard hurdle for some of us to overcome. Unfortunately, not caring much about Wolfowitz doesn't do much to lessen my dismay at the recent goings-on at the World Bank.
With the resignation of Wolfowitz from the World Bank we see a perfect example of the triumphant power of institutional bureaucracy in the form of a moneysucking, self-perpetuating, international organization which appears to be answerable to no one and convinced that they are above the law. What's worse, they seem to wallow in petty self-advancement, and profit by spending the money they receive from nations like the United States to expand their culture of corruption and contaminate the rest of the world.
The World Bank is a bloated bureaucracy with a budget of almost 30 billion dollars, 10,000 employees and an increasingly poor record of delivering on its mandate to reduce world poverty and help disadvantaged nations modernize. One of the largest problems is that allocation of aid from the bank has involved a great deal of input from client countries with minimal accountability to the countries providing funding for the bank, and decisions left up to high-handed bureaucratic mandarins who are answerable to no one. A great deal of money is spent very poorly and ends up in the pockets of corrupt regimes with little progress to show for all the spending. It has increasingly come to function as an wealth redistribution scheme which produces minimal positive results. Wolfowitz was expected to change the way the bank worked and tie aid from the bank to democratic reform and signs of fiscal responsibility in the client countries. This may just seem like common sense to most of us, but to those with a vested interest in the corruption promoted by the current system it was an unendurable threat, and they struck back with everything they had.
That the World Bank was corrupt and inefficient and existing primarily to serve the interests of its established clique of bureaucrats was a well established fact. Wolfowitz was appointed head of the Bank to clean house, root out corruption, and implement much-needed reforms. To the surprise and distress of most of those involved, he took that agenda to heart and seemed bent on actually putting an end to the corruption and neglect which riddled the bank. This didn't sit well with the bureaucrats who found their overpaid jobs and their substantial graft threatened.
Their reaction was to do everything in their power to bring Wolfowitz down. It was a rebellion of the bureaucrats against the reformers and the bureaucrats won. The World Bank has a long history of corruption, particularly characterized by reprisals by the institution and its leaders against whistleblowers and would-be reformers. Wolfowitz became the latest victim of the self-defense reaction of a coterie of corrupt bureaucrats who ironically used anonymous accusations of wrongdoing to try to tar Wolfowitz with the brush of the corruption which they themselves practice.
The events have now been pretty well established. Wolfowitz was appointed by the U.S. to the World Bank with the mandate to try to clean the place up. His girlfriend already worked there, so knowing there was a potential conflict of interest he went to the ethics committee and the board and asked them what he should do. They advised him to find her another job and settle a compensation package on her appropriate to make up for having to lose her position with the organization. Wolfowitz did exactly as they suggested and then got to work, preparing to fire corrupt employees, reform the Bank's questionable lending practices and discipline a body of bureaucrats who had been running pretty much out of control.
The bureaucrats didn't like this at all. They complained to the board. They leaked versions of the story which suggested that Wolfowitz had behaved improperly. They even began wearing blue ribbons to show their solidarity in opposition to Wolfowitz and his campaign of reforms. The accusations of impropriety ranged from the subjective to the bizarre.
Many of the accusations centered around what were basically policy decisions where Wolfowitz wanted to change bank policy to reflect a more conservative agenda, cutting wasteful pet projects, imposing stricter lending policies, reducing funds for Third World birth control projects and changing the wording of documents on global warming. These actions were generally not improper for the head of the organization, but were seen as threatening by bureaucrats with a vested interest in existing policies. Mostly it seems that World Bank employees didn't like Wolfowitz's background, his involvement in the Iraq War and his desire to implement reforms and policies they didn't agree with. The accusations suggested corruption, but were more in the nature of policy disagreements.
The only substantive charge was the one involving the removal of his girlfriend, Shaha Riza from the World Bank staff. Riza had worked there for eight years and was a very successful and outspoken advocate for womens rights reform in the Middle East. The solution to the potential conflict of interest when Wolfowitz came to the bank was to move Riza to the State Department where she could continue to work on projects she was involved with.
The problem was that her salary was still going to be paid by the World Bank, and as part of the arrangement, that salary was substantially increased to compensate her for the inconvenience of the situation and to make sure that she wouldn't sue the bank. All of this was done at the suggestion of the World Bank ethics committee and ultimately the complaint boiled down to their conclusion that the amount which she was compensated was more than they had expected and out of line with the normal pay structure of the bank. This is a legitimate but mostly technical complaint, but clearly one which could have been handled internally and was hardly a serious breach of ethics. It basically comes down to the opinion that Wolfowitz should have delegated someone else to sign off on the amount of her compensation.
The real problem for Wolfowitz was the aura of scandal created by the flood of anonymous accusations from within the bank. Although they had very little substance to them, the furor which they stirred up in the press was bad for the public image of the bank and reduced Wolfowitz's ability to do his job effectively. It became clear that the storm of opposition from within the bank would cost more than the board was willing to pay since they didn't have much affection for Wolfowitz either.
Wolfowitz has described the entire scandal as "bogus", and the ultimate resolution demonstrates that he was right. Once he had agreed to resign at the end of June, the board admitted both that he had done nothing wrong and that there were no meaningful causes for action against him, and that even in the case of the compensation for Shaha Riza, multiple other World Bank personnel had reviewed and approved the amount given. So Wolfowitz did nothing wrong, but nonetheless he's out on his ass and there's no punishment or accountability for the anonymous bureaucrats who launched the campaign of smears and whispers which brought him down.
President Bush is going to make every effort to replace Wolfowitz with another American who will continue to pursue an anti-corruption, reform agenda at the World Bank, but there is substantial international opposition, and the international left has candidates waiting in the wings, who fit the typical model of socialist stooges willing to tolerate corruption if it allows them to pursue their anti-American, anti-capitalist agenda.
There's a bigger problem here than just the corruption at the World Bank and the victimization of Paul Wolfowitz. More importantly, this struggle is a clear reminder that we're in a war which is as serious as the War on Terror, and it looks like we've suffered a major defeat at the World Bank. It's a war between the proponents of responsible and representative government and a bureaucratized worldwide culture of socialism and corruption which has grown out of control. The power and influence of these institutions is growing and they are forming alliances with the most dangerous groups and nations around the world – alliances which enable their corruption and provide them with the support they need to gain increasing autonomy.
We underwrite groups like the World Bank, but increasingly we have less and less say in what they do and how they spend our money. What is very clear is that their objectives are incompatible with our welfare as a nation and the best interests of free people world wide. Paul Wolfowitz was sent to the World Bank to represent our interests, but he failed; and his failure will make the enemies of freedom stronger. It's a failure for which we'll pay a serious price in the future.Powered by Sidelines