Economy & Budget

The Trial of Paul Wolfowitz

Facing an overflow crowd of reporters and a battery of cameras and photographers yesterday, an embattled Paul Wolfowitz would not say whether he had been in touch with the White House as he battled to keep his job as President of the World Bank during the spring meeting of the Bank and International Monetary here this weekend.
 
However, signs were strong that, for at least the time being, the 63-year-old Wolfowitz had staved off calls for his scalp among the World Bank/IMF staff over whether he acted out of line in seeking a pay raise for a girlfriend who worked at the World Bank.  Sources told me that Wolfowitz did well in fielding difficult questions at the closed-door lunch of finance and development ministers attending the meeting at IMF headquarters here.  During one break in the session, I asked a Swedish diplomat who was participating how Wolfowitz was doing at the lunch and whether he would hang on to his presidency.  “I think so,” he replied, “So far, so good.”

Arriving at the IMF press room shortly before the news conference of the Bank’s Development Committee, I found an overflow crowd of print and electronic journalists more akin to a national convention of a political party than the regular meeting of an international lending institution.  There was no argument that the recent personal controversy surrounding Wolfowitz dwarfed the agenda of the bank he heads, including its present passionate case for more assistance to Africa. 
 
“Did you get our communiqué?” a spokeswoman asked me almost immediately.  As I began to read the eighteen paragraph document issued by the Development Committee, she then said: “I think you are looking for Paragraph 16.”
 
Sure enough, Paragraph 16, which would be referred to often during the rest of the day, addressed the Wolfowitz business: “We have to ensure that the Bank can effectively carry out its mandate and maintain its credibility and reputation as well as the motivation of its staff,” it read, “The current situation is of great concern to all of us.  We endorse the board’s actions in looking into this matter and we asked it to complete its work.  We expect the Bank to adhere to a high standard of internal governance.”
 
Translated:  Wolfowitz hangs on for now, pending an internal investigation of whether he violated any ethical rules in dictating a compensation package for lady friend Shaha Riza.  After he disclosed their relationship to the Bank’s Ethics Committee while negotiating his contract as president, the panel determined she must leave her work there and ordered Wolfowitz to arrange a compensation package through the Bank’s human resources department.  This he did, the results being an increased pay grade, major raises and promotions upon Riza’s eventual return. 
 
During the press conference, I cited the White House’s expressed support for Wolfowitz remaining in his position and asked “Did you have any subsequent conversations over the weekend with the White House or with Secretary Paulson that would lead you to think they weren’t as solid in their support of you?”
 
“It’s a good try,” Wolfowitz told me with a chuckle, “but I’m not going to get into that.  I’d come back to what we said in the Communiqué, and I think that’s the right place to be working on this issue.  It is a serious issue. The Board has — stick to the words of it–the Board is looking into the matter, and they are going to complete their work, and "We expect the Bank to adhere to a high standard of internal governance."  I think that’s what we all agree on.
 
At the regular White House briefing for reporters this afternoon, the top spokeswoman for the President made it clear their support of Wolfowitz was unchanged.  Asked about Wolfowitz by radio talk show host Les Kinsolving, Acting White House Press Secretary Dana Perino said: “Let me just reiterate for you that the President does have full confidence in Paul Wolfowitz.  He has done a very good job at the World Bank, where they are working to lift people up out of poverty around the world.  He’s focused on Africa and other areas around the world that need the World Bank’s attention.  And the President continues to have confidence in him.


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