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POLITICS: Charges of Dishonesty Fly at World Bank
By Emad Mekay
WASHINGTON, May 3 (IPS) - The controversy over allegations of misconduct
by World Bank President Paul Wolfowitz is turning ever more sour, with
Wolfowitz and former top managers, who together oversaw billons of dollars
in loans to thousands of projects in developing nations, trading barbs and
accusations of dishonesty.
On Thursday, an embattled Wolfowitz sent a message of protest to Herman
Wijffels, who is chairing the ad hoc committee probing allegations that he
may have violated Bank rules by giving his girlfriend, Shaha Riza, an
unusually generous pay and promotion package.
The committee will issue a report to the 24-member board of the Bank,
which shares the responsibility of running the institution's day-to-day
affairs with the management. The Board will likely decide Wolfowitz's fate
sometime next week.
In the message, Wolfowitz said he was "dismayed and troubled" at the tone
of recent statements by the Bank's former managing director, Roberto
Danino, and Ad Melkert, former chair of the Ethics Committee of the World
Bank Board of Directors.
Both have disputed Wolfowitz's account of how he came to organise the
lucrative package that triggered accusations of nepotism and charges that
he had failed to gain approval from the Bank's personnel department or the
Board.
Last week, Wolfowitz defended his decision by saying that he acted in good
faith and had sought an early recusal from the affair.
Melkert and Danino directly challenged those statements. Both contended
that Wolfowitz insisted on having ongoing professional contact with Shaha
Riza while on the job, a violation of Bank rules.
"Contrary to what the staff rules allowed for, Mr. Wolfowitz's proposal
explicitly insisted on the possibility of maintaining professional
contacts with Ms. Riza. He kept that opinion even after grudgingly
following the advice by the Ethics Committee," Melkert said in his
statement, referring to the committee he chaired.
"The Ethics Committee was not consulted, nor did it approve, the terms and
conditions of the external placement," he added.
The heated exchange saw Melkert accusing Wolfowitz's lawyer of spreading
lies.
"I only became involved with the press when it became clear that those
speaking for Mr. Wolfowitz were intent on continuing to spread erroneous
information on the role and actions of the Ethics Committee," he said.
In his statement, Danino also said that Wolfowitz appears to be
deliberately misleading the public by selectively releasing certain
documents. He took issue with Wolfowitz's definition of "recusal", saying
the president "wish[ed] not to comply with Bank rules."
He said the selected statements omit a statement from Wolfowitz that
expressly indicated that the president would not be isolated from
professional contact with Riza.
"The omission thus presents a half-truth that misleads the reader and
hides (Paul Wolfowitz) PW's wish not to comply with Bank rules," Danino
said.
Sources inside the Bank say that Danino had originally rejected the terms
of Riza's reassignment at the U.S. State Department, leading to his
exclusion by Wolfowitz from the actual contract negotiations.
But in his message on Thursday, Wolfowitz urged the committee to reject
their allegations that he lacks credibility. He contended again that he
had acted within the guidelines of the World Bank.
"While I am prepared to acknowledge that we all acted in good faith at the
time and there was perhaps some confusion and miscommunication among us,
it is grossly unfair and wrong to suggest that I intended to mislead
anyone, and I urge the committee to reject the allegation that I lack
credibility," Wolfowitz said.
Bank critics following the controversy from the start say, however, that
it appears as if Wolfowitz, seemingly on the advice of his attorney Robert
Bennett, is still being misleading about his role in the affair.
"Wolfowitz and Bennett are engaging in wordplay with the term 'recusal' in
order to deceive the public about what really happened," said Bea Edwards
of the Government Accountability Project (GAP), a whistleblower protection
agency based in Washington that leaked information about the controversial
high-paying package given to Wolfowitz's girlfriend.
"The fact is that Mr. Wolfowitz never intended to end professional contact
with Shaha Riza. Wolfowitz's 'recusal' was nothing of the kind," she
added.
The controversy continued to unravel this week with more voices calling
for Wolfowitz's resignation, citing the negative impact to the
international standing of the Washington-based World Bank.
On Tuesday, five former finance ministers from Latin America wrote to the
Financial Times newspaper saying that they were concerned with "the
unprecedented state of turmoil at the World Bank resulting from the
confrontation of Paul Wolfowitz with the board of directors and the
staff."
They urged Wolfowitz's ouster. "In the interest of multilateral
cooperation for the alleviation of poverty, Mr Wolfowitz should resign,"
said the group that included Domingo Cavallo, former minister of finance
in Argentina and Rubens Ricupero, former Brazilian finance minister.
While the Bank has often been accused of subjugating economies in
developing countries to the world's richest governments and companies, its
reputation has been further undermined by the charges of nepotism at its
highest levels.
The controversy has been particularly embarrassing for Wolfowitz and the
Bank because since he came to office in 2005, Wolfowitz has sought to make
fighting corruption a signature of his tenure.
Last year, he announced a "long-term strategy" for using the Bank's funds
and expertise to help developing countries rid their governments of
bribe-taking and other dishonest practices.
Many now say that by clinging to his job, Wolfowitz is taking down the
Bank with him.
(END/2007)
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