The current president of the World Bank and former U.S. Deputy Sec. of Defense, Paul Wolfowitz is facing an uphill fight to keep his job after the Bank’s directors promised a quick decision on his future. An investigation has discovered that Wolfowitz was personally involved in dictating the terms of promotion and pay increase for his girlfriend Shaha Riza. The terms that Wolfowitz dictated were overly generous to say the least. He insisted that she get both a promotion and a $60,000 raise, in exchange for moving to a different department where she would not be under his direct supervision.

The Bank’s executive directors said in a statement that, “The Ethics Committee, including its chairman, had not been involved in the discussions with the concerned staff member.” The directors said that they will, “will move expeditiously to reach a conclusion on possible actions to take.” According to the directors, Wolfowitz got himself in trouble by sending a memo to the bank’s personnel manager that, “directed him to reach an agreement with the staff member and specifying in detail the terms and conditions.” Wolfowitz, to his credit, never tried to hide his relationship with Riza, and when he joined the bank, he asked the Ethics Committee what he should do.

The Ethics Committee recommended that he should reassign Riza. He did this, but crossed the line when he involved himself the details of her reassignment. In a statement yesterday, Wolfowitz asked the directors to show some understanding. “Let me also ask for some understanding.  Not only was this a painful personal dilemma, but I also had to deal with it when I was new to this institution and I was trying to navigate in uncharted waters.  The situation was unprecedented and exceptional.  This was an involuntary reassignment and I believed there was a legal risk if this was not resolved by mutual agreement.  I take full responsibility for the details.  I did not attempt to hide my actions nor make anyone else responsible. I proposed to the Board that they establish some mechanism to judge whether the agreement reached was a reasonable outcome.  I will accept any remedies they propose.”

The goal of the World Bank is to help alleviate poverty around the world. The often requires the organization to be critical of wealthy nations who are either slow or negligent in keeping funding their commitments to the bank. How can Wolfowitz be critical of the ethics of others when he has shown ethical lapses of his own? There is little doubt that keeping Wolfowitz could hurt the bank’s future ability to raise funds.

For the good of the organization, Wolfowitz needs to go. The problem is that the World Bank is essentially a puppet for its largest contributor, the United States. If the White House wants their boy Paul to stay, then he will be tough to fire. Paul Wolfowitz is a very intelligent man, and this is a mistake which he should have known better than to make. This was a clear decision ethically speaking, and if can’t be trusted to make the correct decision in this simple situation, then he shouldn’t be trusted to run a large organization like the World Bank. One doesn’t need a perfect moral compass to come to this conclusion.

  Text of Wolfowitz statement

Text of statement by World Bank executive directors

Jason Easley is the editor of the politics zone at 411mania.com.  His news column The Political Universe appears on Tuesdays and Fridays at www.411mania.com/politics

Jason can also be heard every Sunday afternoon at 1:30 pm (ET) as the host of The Political Universe Radio Show at http://www.blogtalkradio.com/thepoliticaluniverse
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