/ 19 April 2007

Heat turns up on Wolfowitz

Embattled World Bank president Paul Wolfowitz looked more isolated than ever on Thursday as directors debated his fate amid the rumblings of a civil war among senior staff.

The 24 executive directors, who are national appointees, cleared out their weekly agenda to discuss what action to take over a pay and favouritism scandal that has engulfed the former Pentagon deputy chief.

The meeting came a day after Wolfowitz attended a stormy meeting of senior staffers during which one of his two top deputies — MD Graeme Wheeler of New Zealand — told him directly to quit.

Wheeler could not be immediately reached for comment, but insiders said his call was an astonishing display of top-level anger about the damage that is being done to the World Bank’s reputation.

”The characterisation from people involved in the meeting was, ‘I can’t believe you’re asking our opinion,”’ one bank insider said after Wolfowitz offered to make some management changes in a bid to rebuild his support.

”It’s not about management style. It’s not about interaction with staff,” the source said on condition of anonymity. ”There was an exasperation that was conveyed to Wolfowitz: what part of ‘resign’ don’t you understand?”

Reports said senior managers from Latin America and Asia sided with Wheeler, but that Wolfowitz enjoyed backing from officials he had appointed to head the bank’s Middle East and Africa divisions.

Pay rise

The board was meeting for the first time since last week revealing that Wolfowitz in 2005 personally ordered a hefty pay package worth nearly $200 000 and guaranteed promotions for his girlfriend at the bank, Shaha Riza.

On releasing the documents, which include detailed instructions from Wolfowitz to the bank’s human resources division, the directors said last Friday they would ”move expeditiously” to decide on possible actions to take.

On Sunday, at the annual spring meeting of bank ministerial policymakers, governments expressed ”great concern” over the affair and supported the board’s inquiry. Wolfowitz, meanwhile, vowed to fight on.

Battle lines were drawn over the weekend between European governments, which have long been suspicious of Wolfowitz, and a camp of supporters that includes the United States, Japan and some African countries.

While campaigning against corruption, Wolfowitz is also leading a drive to raise up to $25-billion from rich donors to sustain the World Bank’s development funding for the poorest countries. That has left some campaigners worried that governments in Europe could use his fate as a bargaining chip over the US government.

White House

Even the White House, while continuing to back Wolfowitz, has urged the board to ”get to the facts … and think of the long-term effectiveness of the institution”.

The bank’s five biggest shareholders — in descending order, the US, Japan, Germany, Britain and France — appoint a director each. The 19 other directors represent the rest of the bank’s 185 member states.

After Wolfowitz took over the World Bank in June 2005, the Libyan-born Riza was sent on assignment to the US State Department to prevent any conflicts of interest. But she has remained on the bank’s payroll.

It has also emerged that while Wolfowitz was still at the Pentagon, Riza visited Baghdad as a consultant for US military contractor Science Applications International Corporation in 2003, just after the US-led invasion of Iraq.

That has fuelled the anger of World Bank staff, who have long been fuming at Wolfowitz’s appointment of former White House aides to key jobs in his inner circle, and complained at his attempts to revive a bank presence in Iraq. — Sapa-AFP