Monday, April 16, 2007

The truth about Paul Wolfowitz

When rumors first started circulating that Paul Wolfowitz had used his position as President of the World Bank to give his girlfriend a big raise, I found it hard to believe that someone with as much experience as Wolfowitz would make such a mistake. Well, now that the documentary records have been released it is clear that this story has been the result of selective leaks geared towards damaging his reputation but with the barest relationship to what actually went on.

Before he even took the job at the World Bank, Wolfowitz informed the Bank that his girlfriend worked there and that this was a potential conflict of interest. The Bank's ethics committee recommended several options, one of which was that she be offered a salary increase in exchange for her having to leave her job. The head of the ethics committee then told Wolfowitz that it was his job as President of the Bank to instruct the human resources division to give her this offer. After receiving those written instructions from the ethics committee, Wolfowitz did so.
Needless to say, none of this context has appeared in the media smears suggesting that Mr. Wolfowitz pulled a fast one to pad the pay of Ms. Riza. Yet the record clearly shows he acted only after he had tried to recuse himself but then wasn't allowed to do so by the ethics committee. And he acted only after that same committee advised him to compensate Ms. Riza for the damage to her career from a "conflict of interest" that was no fault of her own.

Based on this paper trail, Mr. Wolfowitz's only real mistake was in assuming that everyone else was acting in good faith. Yet when some of these details leaked to the media, nearly everyone else at the bank dodged responsibility and let Mr. Wolfowitz twist in the wind.
So why would all these rumors have been put out there to make it look like he was just channeling money to his girlfriend. Could it have anything to do with his crusade to clean up the rampant corruption in the Bank?
All of this is so unfair that Mr. Wolfowitz could be forgiven for concluding that bank officials insisted he play a role in raising Ms. Riza's pay precisely so they could use it against him later. Even if that isn't true, it's clear that his enemies--especially Europeans who want the bank presidency to go to one of their own--are now using this to force him out of the bank. They especially dislike his anticorruption campaign, as do his opponents in the staff union and such elites of the global poverty industry as Nancy Birdsall of the Center for Global Development. They prefer the status quo that holds them accountable only for how much money they lend, not how much they actually help the poor.
Equally cynical has been the press corps, which slurred Mr. Wolfowitz with selective reporting and now says, in straight-faced solemnity, that the president must leave the bank because his "credibility" has been damaged.
Shamefully, some of the American media, such as the LA Times, is buying into this attempt to get Wolfowitz.

Trying to clean up the corruption at the World Bank is a truly Herculean task.
The World Bank will work with the United Nations and other agencies in a global drive to help developing countries recover assets stolen by corrupt leaders, the Bank said on Sunday, estimating that the extent of graft in poor states could reach $800 billion a year.
Wolfowitz is trying to clean up these stables. His enemies have shot at him and, I hope, have missed. Let him get on to his job. Goodness knows that there is a great need for someone to address the rampant corruption wasting tens of billions of dollars that was supposedly meant for helping poor nations.
The World Bank said annual proceeds from cross-border crime, corruption and tax evasion ranged from $1 trillion to $1.6 trillion, of which half involved developing countries and former communist states that are shifting to market economies.

Bribes received by public officials from these developing and transition countries totaled $20-40 billion, the Bank said, calling this an imprecise estimate that nevertheless underscored the need for urgent global action.

The corruption watchdog Transparency International has estimated that former Indonesian leader Suharto embezzled $15 billion to $35 billion from his country, while deceased former leaders Ferdinand Marcos of the Philippines, Mobutu Sese Seko of the former Zaire and Sani Abacha of Nigeria pocketed up to $5 billion each.

In 2004, the African Union said that Africa loses an annual $148 billion -- 25 percent of GDP -- to corruption. U.N. agencies said that in 1990s, corrupt officials in Nigeria embezzled some $5.5 billion, while more than $3 billion was lost to corruption in Kenya.
It may well be there is no possible way to channel aid to these nations where corruption is the daily way of doing things. Getting rid of a guy sworn to address that corruption will guarantee that the bribes can continue unimpeded.