Normally the World Bank leads a fairly sheltered existence. It gets on with making important policy decisions, lending money and collecting debt in the name of global poverty reduction. Occasionally, however, officials at the Washington-based institution find themselves at the centre of popular and media attention.
The last time was the turn of the millennium when anti-globalisation marches surrounded the institution several times. But that was nothing compared to this month. Because of the antics of the Bank’s president and his senior appointees the World Bank has been all over the airwaves, front pages and blogs, and not for the right reasons.
The Bank states its aim as creating “a world free of poverty”. Paul Wolfowitz, its president for the last two years, made it his mission to stamp out corruption as one important way to do this. Providing public money to invest in health care, education, agriculture and similar is certainly very important: it’s what I work on. But the World Bank and its current president, have very fixed views on how to achieve this, and they have the power (of the purse) to make their views stick.
Many people have challenged the fanatical focus on corruption that Wolfowitz brought with him to the Bank (and some felt it was a cover for his lack of vision on other matters and an attempted distraction from his role as a key author of the Bush administration’s failed Iraq policy. They are troubled by not only Wolfowitz’s substantive agenda, but also his style. He surrounded himself with key aides from the Pentagon and proceeded to consult them rather than the Bank’s staff (with years of experience) or board (with the political mandate to make decisions).
In a nutshell Wolfowitz proceeded to make more enemies in and around the World Bank, to add to the long list from his previous job.
So when news broke two weeks ago of corruption and nepotism at the top of this poverty-fighting, anti-corruption public institution, Wolfowitz had few friends to call on. And many people waiting to pounce.
My organization – European Network on Debt and Development – contested George Bush’s 2005 nomination of Wolfowitz very strongly. We did the normal things – write public letters, do media statements, lobbied government representatives, etc. But we also set up a specialist blog – dedicated only to the World Bank president issue. I’d never blogged before and had not seen one used in this way. But it was a roaring success – with the outgoing World Bank president telling his staff just three weeks after our launch that if they looked at our site they would know as much as he did. Then we had Reuters and other DC-based correspondents on the phone to us (in Belgium and in rural England) dying to know what we’d heard. We’d managed a kind of electronic encirclement of this major institution – encouraging Bank insiders to set up webmail accounts to send us the latest, and leveraging our network of activists worldwide to send us tips.
Anyway, this month we’re back and our World Bank president blog has again been used intensively by journalists, activists, officials and more. We’ve listed ten charges against Wolfowitz – the scandal is spreading by the day as hundreds of people pore over the documents released as part of the Bank board’s investigation.
The allegations certainly look serious enough, and there is lots of evidence released in public, for the Bank’s main man to go. In brief they are:
1) That Wolfowitz trampled Bank pay and staffing codes by awarding abnormal payrises to his romantic partner, Shaha Riza. To comply with ethics guidelines Riza had to leave the Bank once Wolfowitz took charge, but she was given pay rises to ‘compensate’ her for working at the State Department, and guaranteed automatic promotion for when she returns to the Bank. More details here and here.
2) That Wolfowitz was less than honest about his role in the pay affair, before admitting a mistake and saying he was sorry only last week. Details.
3) That the State Department-established job for which Shaha Riza is being paid more than Condoleeza Rice does not amount to much: the Foundation for the Future has yet to make a grant. Details.
4) That in less than two years of Wolfowitz’s tenure at the Bank over half of Bank senior managers have left – many either pressured by the president or unhappy with this style and direction. Details.
5) That senior management positions have been filled by appointees from governments who had supported the Bush administration in the run-up to the Iraq war. Details.
6) That Wolfowitz brought in two special advisers who had worked with the Bush administration, ensured they also were paid astronomical salaries and worked with a cabal of them and others rather than Bank staff or board members. Details.
7) That some of Wolfowitz’s senior management and/or senior staff appointees have been pushing a Republican Party line on family planning, including removing all mentions of reproductive health from certain Bank planning documents, including the Madagascar Country Assistance Strategy. Details.
8) That Wolfowitz has been continuing to promote the Bush administration’s line on Iraq (see this) using his position at the Bank to accelerate the Bank’s re-engagement in Iraq, and has also brought his political views to bear when making other lending decisions). See Wolfowitz Watch commentary here and here.
9) That the World Bank’s internal machinery for dealing with ethics and internal corruption issues is not working properly and may have been populated with Wolfowitz cronies. Suzanne Rich Folsom, head of the Bank’s Institutional Integrity department may have been reluctant to investigate a Bank staff’s whistleblowing on the Riza issue because of her ties to Wolfowitz via her husband George Folsom, former president of the International Republican Institute. One of Suzanne Folsom’s hires in that department (supposed to probe corruption within the bank) was Allison Brigati, the daughter of former national chairman of the GOP, Frank Fahrenkopf. See the Village Voice expose.
10) Another one is the question of on what basis Wolfowitz’s partner Riza went to work in Iraq for a defence and intelligence contractor (see this story). Questions include whether Riza notified the Bank (which forbids its staff taking on politically sensitive assignments, and whether Wolfowitz might have had a hand in obtaining her the position (he was still at the Pentagon).
As well as these ten points, the affair does raise some more general policy and political issues.
Firstly the deep problems with the World Bank’s top job selection process. At present the White House Chief of Staff draws up a shortlist which is presented to the US president who decides which American citizen should get the position and foists it on the Bank’s board. Not very impressive for an international organization with over 180 government members and a penchant for talking about good governance. See my comment piece of two years ago on this site.
Secondly: blowback for the Bush administration’s cavalier approach to multilateral institutions. Few have forgotten Wolfowitz’s presence in the administration when it was desperate to drum up votes in the UN Security Council before the Iraq War. Nor that many of the allegations and predictions on Iraq by Wolfowitz and others turned out not to be true. See this CNN story if you can’t remember.
This time it’s not just a radical fringe of protesters who are surrounding the World Bank and calling for change. Ministers, Bank senior staff, the editorial board of several leading newspapers worldwide, thinktank bosses and many more have told Wolfowitz to practice what he preaches and get out of the Bank. I think it’s likely he will go, but he and the US government will hold out for some kind of deal and face-saving maneuver. This interim period looks like being a good time for bloggers and a very bad one for the World Bank.