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Row over Wolfowitz's Partner Intensifies
The dispute over the pay increase and promotion awarded to the partner of the World Bank president, Paul Wolfowitz, when she was seconded from the bank to the US State department intensified on Friday when both the then head of the board's ethics committee and its then general counsel challenged the version of events put forward by bank officials.Ad Melkert, who chaired the committee and is now number two at the United Nations development programme, is said to be unhappy at the way bank officials characterised his role in the agreement over Shaha Riza, which news reports, unchallenged by the bank, say raised her salary to $193,000 (£98,000) free of tax.
Mr Melkert's spokesman told the Financial Times it was "entirely up to management to determine the specific terms and conditions of the placement".
A senior bank official had earlier told the FT: "After consultation with the then general counsel, the ethics committee of the board approved an external assignment agreement."
Mr Melkert's spokesman challenged this explanation, stating that the members of the committee "were not aware of, nor did they approve, the details of the agreement".
The spokesman for Mr Melkert also took issue with the official's claim that the board had "instructed" Mr Wolfowitz to resolve the issue of what would happen to Ms Riza, who under bank rules could not work for her partner, through an external assignment.
Mr Melkert's spokesman said: "The role of the ethics committee is to advise on issues of integrity, not to mandate."
Meanwhile, Roberto Danino, the bank's then general counsel, told the FT: "I categorically deny that I was involved in any way in the implementation of the ethics committee advice to the president regarding the Shaha Riza matter."
Earlier, Reuters had reported that a bank official claimed Mr Danino negotiated the deal along with Ms Riza's lawyer and Xavier Coll, the bank vice-president for human resources.
According to the bank staff association - which sent an e-mail to all employees this week demanding an explanation of how the agreement was reached - the Riza terms violated three specific bank rules.
The bank's board, which is made up of representatives of its shareholder governments, met in emergency session on Thursday afternoon to discuss the allegations and agreed to investigate them.
The claim that Ms Riza received special treatment could hugely embarrass Mr Wolfowitz, who has championed the cause of good governance globally.
The FT asked the bank whether Mr Wolfowitz or any members of his office had been involved in the negotiations. At the time of going to print, the bank was unable to respond to this request.
The controversy has inflamed tensions between Mr Wolfowitz and staff at the bank's headquarters in Washington and has the potential to ignite fresh conflict between him and the board and between the bank and the UNDP.
Mr Wolfowitz declined to comment. Ms Riza did not respond to a request for comment.
Copyright The Financial Times Limited 2007
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10 Comments so far
Show AllThe best thing for Ms Riza is to resign or even better for Wolfowicz to resign as well. Every body would be happy to see this happening (as this ex-hawk from the Bush administration was lucky enough not to follow his friend Rumsfeld into oblivion). He was smarter to jump out of the sinking republican boat in 2005.
When we think that the World Bank is supposed to fight against poverty, we understand why Wolfowicz took this decision to increase the income of his maîtresse: he wished to help her have a better life!
"The claim that Ms Riza received special treatment could hugely embarrass Mr Wolfowitz, who has championed the cause of good governance globally."
Championed the cause of good governance? What is his philosophy of "good global governance" and what has he accomplised that would fall under that heading?
jconsult April 7th, 2007 2:32 pm
"When we think that the World Bank is supposed to fight against poverty, we understand why Wolfowicz took this decision to increase the income of his maîtresse: he wished to help her have a better life!"
Good one, jconsult, but what has he done to help the poor have a better life?
« Good governance »: yes, indeed, let's find out. May be Wolfowicz helped his friend Cheney start the profitable Irak war where some few friend companies made and are still making hundred of millions of $ of profits. This is really good governance. The question is to know where the money goes!
"To help the poor have a better life?: that is the question too. As far as 2005 when Wolfowicz took over in the World Bank, one may say that he delivered many speeches as it is usually the case in these huge organisations and certainly did as much as he could to help US companies "help the poor countries". But to be honest, I don't think Wolfowitcz is interested by the poor countries, his only interest is himself and his friends
You might start looking for some of the monies in Dubhai. It is rumored that Halliburton is keeping a rainy day fund there for the likes of Wolfowitz and those he works for.
How shocking! A Bush administration employee, and one deeply involved in the planning of the Iraq war, caught involved in a corruption scandal, handing out favors to friends and looting the coffers. Wow, never saw this one coming!
The rampant, corrupt criminality of these clowns takes one's breath away. Here's a guy who ideologically believes in a "New American Century" of US hegemony and imperial dominance - hey, let's make him head of the World Bank! While we're at it, let's make the guy who drafted laws dispensing with international law, the Genevea Conventions, and bans on torture, the US Attorney General! (The previous guy, who wanted to institute a post-Armageddon theocracy, for some strange reason was just too mild.) And let's make the guy who wants to get rid of the UN, the US Ambassador to the UN! Want to bring "freedom" and "democracy" to Iraq? Who better to apoint these tasks than the convicted felons who oversaw and ran Reagan's covert Latin American death squads and terrorist outfits! And let's get creationists to head scientific posts, corporate lobbyists to draft environmental laws…
Why don't we just get rid of the World Bank. This is mainly U.S. tax dollars at work. Want budget cuts? Here's the place to start.
Wolfowicz: What he did for Fallujah, he can do for the world.
« Why don't we just get rid of the World Bank. »; ouah! This is a drastic decision and completely wrong. It is true that the US is the main contributor to the World Bank but it is the first benefactors as strange as it may seem. If it were not true, the US would have withdrawn long ago.
There is something to remember is that most international organisations are still dominated by the USA who impose their views and interests to the majority of other countries in the world. And when, these other countries disagree, the US vetoes the decision. Getting rid of the World Bank will not serve the US interests.
In the meantime, Wolfowicz is serving His interest as well as the American interests and if someone tries to dismiss him, the US government will veto this decision.