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Final act in Wolfowitz drama, WB Panel releases report

April 26, 2012

The ad hoc World Bank panel has criticized Wolfowitz for violating the ‘Code of Conduct and Staff Rules,’ and has rejected the arguments that he had earlier submitted in his defense. The panel appointed by the World Bank, to look into the charges leveled against World Bank President Paul Wolfowitz, submitted its second report on Monday. In its second report – submitted to the 24 member of the Bank’s executive board – the panel has concluded that Wolfowitz had shown favoritism while arranging a transfer and promotion for his companion, Shaha Riza, at the bank. The panel, thereby, rejected Wolfowitz’s case that he had acted in ‘good faith.’ It is worthwhile to mention here that Wolfowitz had argued that he had tried to distance himself from Riza’s transfer earlier but was compelled by the bank’s ethics committee. The panel concluded: …by becoming involved in the terms of Ms. Riza’s external assignment and directing the Vice President of Human Resources to agree to specific terms that went beyond the informal advice given by the ethics Committee, Mr. Wolfowitz engaged in a de facto conflict of interest. The 52-page report, submitted in Washington, said that by not accepting the bank’s policy on conflict of interest, Wolfowitz, manifested an attitude of considering himself beyond the ‘established rules and standards.’ The panel, which consists of seven of the 24 members of the World Bank, in effect, pronounced Wolfowitz guilty. The panel reproached Wolfowitz for shrugging off the responsibility over the entire incident and paralyzing the bank for weeks. Paul Wolfowitz is expected to meet the bank’s board at 5 p.m. today in a last ditch effort to save his job. Africa chides, Washington sides with Wolfowitz African nations have joined the chorus demanding Wolfowitz’s departure from the bank. The controversy has undermined Wolfowitz’s ability to lecture against corruption in Africa. The anti-graft message, that the World Bank is so fond of articulating, is in a serious trouble of losing its relevance. His stay would amount to a loss of moral high ground for the apex lending institution of the world. As it is, World Bank is viewed as a western instrument designed to hamper Africa’s development. Further delays would only strengthen this feeling. Meanwhile, Washington’s bureaucrats have once again illustrated their unwavering support for Wolfowitz. Several of Bush’s top aides have stepped up their frantic efforts to prolong Wolfowitz’s stay at the bank. US Vice President Dick Cheney, while questioned whether Wolfowitz should stay in his job replied, ‘I do.’ He added: I think Paul is one of the most able public servants I’ve ever known, and I’ve worked with him a lot over the years. I think he’s a very good president of the World Bank, and I hope he will be able to continue. U.S. Treasury Secretary Henry Paulson, lobbied fellow finance minister to garner support for Wolfowitz and blamed the entire issue on a communication breakdown. Paulson spoke to his counterparts and expressed that the circumstances did not merit dismissal. The day of reckoning For Wolfowitz, the fate is all but sealed. His departure from the World Bank is almost inevitable. Only the terms of his resignation remain to be negotiated. To pass a moral judgement on whether he was right or wrong in arranging suitable conditions for his companion would be wrong of us. The facts should be analyzed strictly in the light of established rules, and, whether he has indeed violated them. The latter, I’m afraid, the panel has already decided for us. To guess the direction in which the meeting between board and Wolfowitz is headed, I leave you with an extract from the panel’s report: The Group recommends the Executive Directors to consider: Whether Mr. Wolfowitz will be able to provide the leadership needed to ensure that the Bank continues to operate to the fullest extent possible in achieving its mandate. Sounds ominous for Mr. Wolfowitz, doesn’t it?