Thread: Pressure grows on Wolfowitz to resign

Pressure grows on Wolfowitz to resign
By Krishna Guha and Eoin Callan in Washington

Published: April 12 2007 19:03 | Last updated: April 13 2007 04:37

Paul Wolfowitz was under pressure to resign as president of the World Bank on Thursday after admitting he was personally involved in securing a large pay rise and promotion for a Bank official with whom he was romantically involved.

The Bank president issued a public apology, saying: “I made a mistake for which I am sorry”.

The apology came after the Financial Times revealed that Mr Wolfowitz ordered the World Bank’s head of human resources to offer Shaha Riza the pay rise and promotion as part of a secondment package.

The instructions were set out in a memorandum dated August 11 2005, according to two sources who have seen the document.

The Bank’s board of directors, who represent its shareholder governments, met late into the night in an emergency session to review the findings of their own investigation into the Riza assignment and decide on the next step.


Pressed at the opening press conference of the Bank’s spring meeting as to whether he would resign over his handling of the Riza case, Mr Wolfowitz said he would “accept any remedies” the board proposes.

He did not comment on the specifics of the memo.

Moments later, amid chaotic scenes in the lobby of the Bank’s headquarters in Washington, the Bank president made an impromptu address to staff who had gathered to call for his resignation.

An emotional Mr Wolfowitz told staff the controversy had been “very painful” and apologised to them in person for his handling of the affair.

Alison Cave, the chair of the staff association, welcomed the apology but said Mr Wolfowitz must “act honourably and resign”.

Mr Wolfowitz said he acted as he did in order to shield the Bank from the threat of a lawsuit if Ms Riza was forced to leave because of staff rules that prohibit its employees from working for anyone with whom they are romantically involved.

He denied charges of an attempted cover-up, declaring: “I did not attempt to hide my actions nor make anyone else responsible.”

The Bank president made a plea for “understanding” saying he faced a “painful personal dilemma” at a time when he was new to the Bank and “trying to navigate in uncharted waters”.

Ms Cave said Mr Wolfowitz had “broken the staff’s trust on this and many other issues” and if the board failed to ask him to step down, the staff association would call a vote of no confidence in him.

In the August 11 2005 memorandum, two sources told the Financial Times, Mr Wolfowitz directed Xavier Coll, the Bank’s vice-president for human resources, to offer Ms Riza specific terms as part of a secondment package to the US State department.

These included a promotion, a pay rise above that normally associated with the promotion, and arrangements to ensure Ms Riza received exceptional annual pay increases. Only the promotion had been recommended by the board’s ethics committee, two sources told the FT.

The terms and conditions were not approved by the Bank’s ethics committee or its senior legal officer, then general counsel Roberto Danino.

A copy of the memorandum has been seen by the subcommittee of the bank’s board of executive directors who were charged with investigating the Riza assignment, two sources said.

Mr Wolfowitz went to the board on Thursday morning and proposed that it should “establish some mechanism to judge whether the agreement reached was a reasonable outcome.”

http://www.ft.com/cms/s/ee84cc80-e91e-1 ... 10621.html

~~~~~~~
An editorial to this article:


Wolfowitz must be told to resign now
Published: April 12 2007 17:54 | Last updated: April 12 2007 17:54

The president of the World Bank has one asset: his credibility. The Bank’s capacity to make a difference lies not in its money and ideas but in its ability to be the world’s voice for development. This includes, as Paul Wolfowitz, the current president, has insisted, being the voice for good governance. Recent revelations have, however, demonstrated such serious failures that the Bank’s moral authority is endangered. If the president stays, it risks becoming an object not of respect, but of scorn, and its campaign in favour of good governance not a believable struggle, but blatant hypocrisy.

It is important to understand what is not at issue here. It is not Mr Wolfowitz’s unpopularity, even though his role as an architect of the Iraq war made him disliked from the start. It is not failures of management, even though his reliance on a group of outside appointees made him mistrusted by many inside and outside the Bank. It is not disagreements over development doctrine, where some convergence of views has occurred. It is not a romantic relationship with a subordinate, itself hardly a rarity in today’s world.

The issue is whether the failures of corporate governance are serious enough to damage the Bank’s moral authority. In a world where curtailing corruption and improving governance have become central to the practice of development, the world’s premier development institution must, like Caesar’s wife, stand above suspicion.

What then is the story? When Mr Wolfowitz became president of the World Bank he also became the boss of his girlfriend, Shaha Riza. To resolve this situation – inconsistent, rightly, with Bank rules – Ms Riza was seconded to the US State Department.

So far, then, so unproblematic. Yet, it is alleged, the terms of the appointment, which appear astonishingly generous, violate a number of Bank protocols. Worse, it now appears Mr Wolf*owitz personally directed the Bank’s head of human resources to offer his girlfriend these exceptional terms. Worse still, this has come out after misleading claims by a senior official that the ethics committee of the board, in consultation with the general counsel, approved the agreement.

What then do we see here? The answer is: an apparent violation of Bank rules; favouritism that borders on nepotism; and a possible cover-up. It is true Mr Wolfowitz and Ms Riza were put in a difficult position. Even so, what has come out would be bad in any institution. In an institution that spear-heads the cause of good governance in the developing world, it is lethal.

The World Bank has moved from being a self-proclaimed exemplar of best practice in corporate governance to an example of shoddiness. As long as Mr Wolfowitz stays, this can be neither repaired nor forgotten, be it outside the Bank or inside it. In the interests of the Bank itself, he should resign. If he does not, the board must ask him to go.

http://www.ft.com/cms/s/18b3bad0-e914-1 ... 10621.html

His judgment on this issue was about as good as his judgment on the Iraq War.

(mod edit)


This post has been edited and I do not think the edit was called for.
I said that Wolfowitz should do the honorable thing, which is to commit suicide.

That statement is far less offensive than the misery and death that man has brought to this world.

The whole world bank should go. Just another nest of scheming barstewards.

Wolfowitz dictated girlfriend’s raise
World Bank president who led push for Iraq war assailed for arranging raise
By Karen DeYoung and Krissah Williams
The Washington Post
Updated: 9:07 p.m. PT April 13, 2007
World Bank President Paul D. Wolfowitz personally dictated the terms under which the bank gave what it called his "domestic partner" substantial pay raises and promotions in exchange for temporarily leaving her job there during his tenure, according to documents released by the bank's executive board yesterday.

The board issued a statement saying it will "move expeditiously to reach a conclusion on possible actions to take," amid rising speculation over whether the embattled Wolfowitz will resign or be asked to step down. Board deliberations over his future were suspended yesterday morning as the bank began its spring meeting, an annual rite attended by finance ministers and central bank presidents, and one now being overtaken by the controversy surrounding Wolfowitz.

"He has apologized, and there is a process in place," Treasury Secretary Henry M. Paulson Jr. said after a meeting with his counterparts from the world's richest nations yesterday. "I don't intend to comment on that here. I do not want that to be read as a lessening of U.S. support for Paul Wolfowitz."

Bank employees call for his ouster
Wolfowitz joined the bank in 2005 after working at the Pentagon, where as deputy defense secretary he was a principal architect of the Iraq war. This made him a controversial figure at the bank, where he fostered resentment among its member nations and 7,000 Washington employees. A number of the bank's leading donor nations, including Britain, expressed public concern about aspects of his leadership long before the current uproar over his girlfriend, Shaha Riza, which began when details of her pay package were publicly revealed last month.

As bank staffers and development activist groups continued to call for Wolfowitz's resignation, White House spokeswoman Dana Perino said that he has President Bush's "full confidence" and that "we expect him to remain as World Bank president."

Defenders also surfaced from other quarters. The Wall Street Journal said in an editorial that "the forces of the World Bank's status quo," angered by Wolfowitz's efforts to fight "corruption-as-usual" and institute more accountability in the institution's lending practices, had seized on a trivial issue to bring him down. One former bank staffer said that "some of the countries who failed to block his election are trying to set him up, and he walked into that trap really well."

‘A matter of corporate governance’
But while few knowledgeable observers were prepared to predict Wolfowitz's departure, many expressed concern that the turmoil is threatening to undermine the work and credibility of the bank.

"The issue now, as far as many of us are concerned, is a matter of corporate governance," said a senior bank staffer who spoke on the condition of anonymity for fear of reprisal. "The Europeans want him out. The U.S. remains silent, and the board is divided."


Others expressed concern about the effect that the controversy could have on this year's negotiations to finance the International Development Association, the bank's lending vehicle for the world's poorest countries. Europe contributes 60 percent of the IDA's funding, and the United States and Japan together give about 26 percent. U.S. contributions and pledges to the current three-year program total about $3 billion.

Among the more than 100 pages of internal letters, memorandums, and legal and ethics opinions released by the board yesterday was an angry letter from Riza to the board, written Monday, to authorize the release of the documents "in the interest of expediting and facilitating the resolution of this issue."


Wolfowitz thought documents would aid him
Riza, a Tunisian-born British citizen who worked at the bank as a communications specialist, made it clear that "I did not wish to leave the Bank." She said she had objected to the arrangements for her departure. "My effort to accommodate the Board's Ethics Committee and avoid creating distractions for Staff, Board and Management from their noble mission while protecting my interest, has only resulted in the most vicious public attacks on me."

Wolfowitz had also asked for the release of the documents, believing that they would show that the board's ethics committee had rejected his offer to recuse himself from consideration of Riza's employment and ordered him to find a solution.

But the documents also revealed that Wolfowitz's description of events has been less than candid. In a May 25, 2005, letter to Wolfowitz's personal lawyer negotiating his contract, Roberto Dañino, then the bank's general counsel, acknowledged that Wolfowitz had disclosed "a pre-existing relationship with a Bank staffer" and had proposed to resolve it "by recusing himself from all personnel matters and professional contact related to the staff member."

Wolfowitz lawyer Robert Barnett responded two days later with an e-mail stating that the proposal "WOULD NOT -- I REPEAT, NOT -- INVOLVE RECUSAL FROM PROFESSIONAL CONTACT" with Riza. "THIS MATTER," Barnett wrote, "MUST BE RESOLVED" before Wolfowitz would sign his contract.

Severance deal called for promotions, raises
The board eventually ruled that "professional contact" between the two violated bank policy and instructed Wolfowitz to order the personnel department to arrange her departure. But the board insisted yesterday that it neither "commented on" nor "reviewed or approved" the agreement that Wolfowitz ordered his human resources department to make with her.

In a memo to the bank's vice president for human resources dated Aug. 11, 2005, Wolfowitz wrote, "I now direct you to agree to a proposal which includes the following terms and conditions." Riza was to be "detailed to an outside institution of her choosing while retaining Bank salary and benefits." She was to receive an immediate raise with approximate annual increases of 8 percent.

By 2010, when Wolfowitz's five-year term expired, she would reach a salary of $244,960, significantly above the maximum of $226,650 allowable for her pay grade. On her return to the bank, she would be automatically promoted to the level of senior country director; if her return were delayed another five years by a second Wolfowitz term, she would be elevated to the level of bank vice president.

http://www.msnbc.msn.com/id/18084845/

European leaders turn screws on Wolfowitz
By Krishna Guha in Washington

Published: April 15 2007 03:50 | Last updated: April 15 2007 03:50

European leaders took the lead on Saturday in voicing public criticism of Paul Wolfowitz, the embattled World Bank president, as a divided international community wrestled with whether to press for the Bank chief’s resignation.

Mr Wolfowitz himself, meanwhile, lobbied world finance and development ministers gathered in Washington to stay in the job, chalking up expressions of support from several African leaders and positive remarks from Japan.

The struggle follows the revelation that Mr Wolfowitz personally directed the Bank’s human resources chief to offer a big pay rise and promotion to a Bank official with whom he was romantically involved as part of a secondment package.

Germany’s development minister Heidemarie Wieczorek-Zeul, said Mr Wolfowitz has to decide “whether he still has the credibilty to represent the position of the World Bank.”

The UK development minister Hilary Benn said “this whole business has damaged the Bank and should not have happened.”

“It is not the World Bank’s credibility but Mr Wolfowitz’s credibility that is on the line,” said Swiss economics minister Doris Leuthard.

The latest European critics joined France’s finance minister Thierry Breton, who took the lead in challenging Mr Wolfowitz on Friday.

Mr Breton said the Bank “is an institution whose governance and ethics must obviously be impeccable. I fully trust the governing board to draw the consequences it must draw.”

Brazil’s finance minister Guido Mantega also voiced criticism of Mr Wolfowitz, telling reporters “we will have to see if Wolfowitz will be able to retain the moral authority necessary to fulfill his duties.”

However, several African nations expressed support for Mr Wolfowitz, who often declares that Africa is his number one priority.

“He has made us believe in ourselves,” said N’Gandu Magande, finance minister of Zambia.

Antoinette Sayeh, finance minister of Liberia and a former World Bank official, praised Mr Wolfowitz’s “visionary leadership” – adding “he has certainly championed Africa’s cause in the two years of his leadership.”

Japan’s finance minister Koji Omi said he would not comment on the specific issues surrounding the Shaha Riza affair, but said “I rate his work as World Bank president highly.”

With no consensus yet in place as to what should happen to Mr Wolfowitz, many world economic leaders took refuge in declaring their respect for the process currently underway at the Bank’s board, which has promised to decide what further action it should take “expeditiously”.

The expressions of respect for the board process are somewhat disingenuous, as the board directors represent the Bank’s shareholder governments, and will do what their ministers tell them to do.

Some nations see this stalling tactic as offering Mr Wolfowitz the opportunity to decide whether to quit the Bank of his own accord, a choice that would prevent them from having to take the tough decision as to whether to fire him.

As of Saturday night, though, there was no sign that Mr Wolfowitz would go voluntarily.

http://www.ft.com/cms/s/ebf27b56-eafa-1 ... 10621.html

Originally Posted by Hosay

His judgment on this issue was about as good as his judgment on the Iraq War.

(mod edit)


This post has been edited and I do not think the edit was called for.
I said that Wolfowitz should do the honorable thing, which is to commit suicide.

That statement is far less offensive than the misery and death that man has brought to this world.

Hosay
You may not think that the "edit" was called for, however, re-read the rules at the top of every forum page. That should make it clear as a bell.

And you also know that you did NOT say he should commit suicide.
You used extremely violent language which is a NO NO.

There are no exceptions, Hosay. Wouldn't you agree that it would be very unfair to the rest of us if there were?

Hosay,

Questioning a moderator's actions on the open boards is a BIG no-no, or haven't you bothered to read the rules?

I suggest you back off or you will find your posting privileges suspended.

That is all...

Top deputy tells Wolfowitz to step down: sources
Thu Apr 19, 2007 12:38 AM ET



By Lesley Wroughton

WASHINGTON (Reuters) - A deputy to Paul Wolfowitz urged the World Bank chief on Wednesday to resign in the interests of the institution during a meeting of the bank's management, sources who participated in the meeting said.

The sources told Reuters that World Bank Managing Director Graeme Wheeler, a bank veteran named by Wolfowitz as one of his two deputies a year ago, raised the issue at a meeting of the bank's vice presidents.

Asked to comment, World Bank spokesman Marwan Muasher said: "I feel it is inappropriate to comment on private meetings."

Wheeler, a former World Bank treasurer who joined the bank from the New Zealand treasury, is widely respected in the institution.

He was one of the first career staffers Wolfowitz brought into his management team after he took the helm of the bank in 2005 and came under fire for surrounding himself with people he brought with him from the Pentagon and White House.

Wheeler could not be reached for comment.

The World Bank is reeling from a controversy over leaked documents that show Wolfowitz played a role in dictating the terms of a high-paying promotion for his companion and bank employee Shaha Riza, before she was moved by the bank in 2005 to the State Department because of their relationship.

Wolfowitz has said he does not intend to resign and has apologized for his handling of the matter, even as World Bank member governments worry that the matter had damaged the credibility of the poverty-fighting institution and dented staff morale.

The White House on Wednesday repeated that President George W. Bush still had "full confidence" in Wolfowitz, a key Iraq war architect who left the Pentagon in 2005 to become World Bank president.

"We still have full confidence, the president has full confidence in President Wolfowitz," White House spokesman Tony Fratto told reporters.

The bank's 24-nation board is examining Wolfowitz's role in helping to arrange the promotion for Riza, while the organization representing bank employees has called for his resignation.

"I think the effort of the World Bank board should be to get to the facts, treat it with fairness and think of the long-term effectiveness of the institution," Fratto said.

http://link.toolbot.com/reuters.com/75249

Originally Posted by 2ndamendsis

Hosay
You may not think that the "edit" was called for, however, re-read the rules at the top of every forum page. That should make it clear as a bell.

And you also know that you did NOT say he should commit suicide.
You used extremely violent language which is a NO NO.

There are no exceptions, Hosay. Wouldn't you agree that it would be very unfair to the rest of us if there were?

Well this is a forum page. Where are the posting rules at the top of the page?

The reason I didn't repeat what I said was that the moderator deleted it in the first place, so it would be quite provocative to go ahead and repost it.

What I said was nearly an exact quote from an episode of "Sharpe's Rifles," a BBC presentation that was shown on PBS in the United States. Prim and Proper British stuff. Shown on BBC during prime time. Probably considered family entertainment.

Such action was also expressly shown in the movie, "The Shawshank Redemption," which was rated R, not for that scene, but for the male on male rape.

2ndamendsis:

The posting rules are listed at "illegal immigration debate Forum Index" ...
"Announcements" ... "ALIPAC Rules for the Discussion Groups Area."
I've read them, and I see the relevant rule, and I'll respect it.
I don't think that what I said was really what they are talking about when they talk about violent language or gun talk, but I can see the need for rigid rules.
Otherwise, we'll be on the same slippery slope we long ago got on with the immigration laws.