Wolfowitz strikes back

World Bank president Paul Wolfowitz is uncloaking new measures at the institution apparently designed to appease his critics and regain the initiative after weeks of fast retreat in the face of accusations of nepotism and an international downpour of criticism for his management style.

The Wolfowitz offensive includes:

  • a modified family planning strategy to replace a highly controversial proposal;

  • reactivation of an otherwise slumbering probe unit to investigate staff complaints;

  • a new letter to World Bank personnel urging them to give him more time; and

  • hiring a top-notch defence lawyer.

Off balance for weeks, Wolfowitz announced his latest move in a message he sent to his staff early on Tuesday, asking for their “continued patience.”

It is the first public comment Wolfowitz has made since the stormy annual meetings of the World Bank and the International Monetary Fund last week when he admitted he had made “a mistake”.

At issue is a scandal involving excessive pay he coordinated for his girlfriend and then-World Bank employee Shaha Riza before seconding her to the United States State Department as a part of an exorbitant compensation package.

Wolfowitz’s message briefs the staff on his meeting with the vice-presidents of the bank and their deputies that took place on Monday. “The vice-presidents have been candid in their feedback to me on the challenges facing the Bank,” he wrote.

Trying to offer changes to his much-criticised management style, which relies on a handful of close allies and appointees, he said he offered to consult them as a collective sounding board for finalising major changes “in the way my office and the senior management team work”.

In the letter, Wolfowitz urges the staff to focus on work because “we have an enormous agenda of work ahead of us”.

Family planning

Another shot in the battle over his ouster came in a leaked document from the World Bank showing a new, revised family-planning and reproductive-health language, different from earlier versions where Wolfowitz’s allies have deleted references to family planning — outraging European Bank directors and gender groups on the way.

The originally proposed family-planning strategy reflected the ultra-conservative line embraced by Wolfowitz-appointee MD Juan José Daboub.

The new strategy, however, contains new language added as an amendment to the report and dates from Friday April 20.

Bank insiders say the new language was provided by Joy Phumaphi, World Bank vice-president, according to the “Wolfowitz Resign” campaign, where bank staff members take part and share information with the public online.

It talks about “providing financial support and policy advice for comprehensive sexual and reproductive-health services, including family planning, and maternal and newborn health”.

Phil Hay, a communications adviser to the bank, in a message says that “European board members are understood to be pleased to see this language”.

Volcker Panel

Another front activated by Wolfowitz is the sudden revival of the Volcker Panel, established in February and led by Paul Volcker, former chairperson of the US Federal Reserve, to probe complaints by bank staff over how the Department of Institutional Integrity (INT) was conducting its business.

The INT is the office that investigates allegations of internal fraud and corruption. It is run by Suzanne Rich Folsom, another Wolfowitz appointee, who prompted many protests inside the bank against her heavy-handed style. In face of rising resentment, the 24-member board of directors, representing the bank’s shareholder governments, was forced to mandate an investigation in 2006 to be carried out by the Volcker Panel.

Ironically, the staff association has apparently been asking to meet Volcker and his panel since it was formed — but the bank workers have had little luck.

Volcker has been accused of dragging his feet with his independent review and now many inside the bank note that the decision to turn on the panel has finally come, in the midst of the scandal facing Wolfowitz.

With recriminations in the air, Wolfowitz is also taking another step in his fight for his well-paying position at the helm of the bank: legal measures to guarantee his safety.

He announced on Monday that he is hiring a new attorney, Robert Bennett, a master specialist in crisis management.

Bennett, best known for representing former US president Bill Clinton in the notorious Paula Jones sexual-harassment case, has so far asked for more time, like Wolfowitz, and warned against a “rush” to judge the beleaguered bank president by the board members, who are looking into the case.

Wolfowitz has also recently offered to rein in two of his hard-line advisers, Robin Cleveland and Kevin Kellems, who not only are outraging bank staff by their harsh style but also by the nearly $250 000 salaries they are reportedly making.


Wolfowitz is facing an escalating scandal surrounding his promotion and higher-than-usual pay package for Riza.

The nepotism charges added to a long list of complaints about his management style have triggered an open revolt from bank staff. Some of the institution’s top managers joined calls from across the world for Wolfowitz to resign.

On Monday, a group of 42 former senior World Bank executives wrote a letter to the Financial Times asserting that Wolfowitz “has lost the trust and respect of bank staff at all levels”.

Even the bank’s own watchdog group, the Independent Evaluation Group, warned that trust is eroding in the bank.

“Indications are that the ability of staff — particularly those working in client countries — to carry out daily interactions with clients, as well as the institution’s ability in convening partners, are eroding,” said the group in a memo to the board of directors on April 20. “Trust is being damaged.” — IPS

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Emad Mekay
Guest Author

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