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At World Bank Meeting, Frustrations Boiled Over

by Steven R. Weisman

WASHINGTON - At a meeting between Paul D. Wolfowitz and his top managers at the World Bank last week, Mr. Wolfowitz made an unusual confession. “I understand that I’ve lost a lot of trust, and I want to build that trust back up,” he said, according to people present.

But the beleaguered bank president was immediately confronted by one of his top deputies, who asserted that Mr. Wolfowitz was wrong to think that the furor over his leadership sprang only from his handling of the pay and promotion for his companion or from unease over his support of the Iraq war while at the Pentagon.

0425 02Graeme Wheeler, the bank’s managing director, said at the meeting that the fight over whether Mr. Wolfowitz should stay on at the bank amounted to the “the biggest crisis in its history.”

He said it arose from a range of issues, including fears that Mr. Wolfowitz and his aides were trying to impose Bush administration ideas on family planning and climate change at the bank and worries over a possible conflict of interest in the bank’s hiring of a Washington law firm, Williams & Connolly, to investigate leaks. A partner at the firm had earlier negotiated Mr. Wolfowitz’s employment contract with the bank.

Mr. Wheeler also said Mr. Wolfowitz’s staying on would cause “fantastic damage” to the bank’s reputation and effectiveness.

The exchange, described in detail by people who attended the closed meeting, illustrated how far the turmoil surrounding Mr. Wolfowitz has spread since it erupted in public a few weeks ago. It also revealed his determination to remain on the job and the deep wellspring of antipathy toward him among the bank’s board and senior staff.

With the hiring of Robert S. Bennett, a prominent lawyer, to defend his record before the board, Mr. Wolfowitz has effectively revealed that his hope is to play for time, overhaul his management team and plead that a hasty exit would be disruptive to the bank, especially since he was not planning to stay for more than three more years anyway.

According to the people at the meeting last week, the vice presidents were startled when Mr. Wolfowitz said he might not even be at the bank for another year, though this was not said to be a sign that he would resign, only that a fight over whether he should stay was not worth the trouble.

Mr. Wolfowitz has promised to mend his ways and has warned that a forced ouster would damage the bank. But it has become clear that there is a larger sense of unease, especially among Europeans, about American influence over the bank and its strategies toward ending poverty. There is also tension between the United States and Europe over who is to blame for the shortfall in commitments to raise $30 billion to reach that goal.

“There is no one issue that is motivating people,” said Robert B. Holland III, a Texas businessman who served as the United States member of the bank’s board until last year and who is a strong supporter of Mr. Wolfowitz. “There is a built-in ideological opposition to Wolfowitz that was there from day one. The opposition has been looking for any opportunity to exploit to get him out of there.”

Mr. Holland said that Mr. Wolfowitz had sought from the outset to trim the bank’s bureaucracy and enforce new standards of honesty in countries receiving bank assistance.

But such steps as cutting off money to programs and countries suspected of graft alienated two groups of officials: the bank’s 24-member board of directors, which runs the bank’s daily affairs in tandem with Mr. Wolfowitz, and a group of 30 or so vice presidents and their equivalent.

Early in his tenure, Mr. Wolfowitz suspended $1 billion in funding for a program providing health services, including maternal health, to India. That enraged aides to Prime Minister Tony Blair, since Britain was helping to fund the program.

The board then stepped in to rewrite Mr. Wolfowitz’s approach on corruption. Last month, it promulgated an anticorruption policy that handcuffed Mr. Wolfowitz by preventing him from acting to freeze programs without consultation and by asserting that the bank would not finance groups in countries over the objections of their governments.

The corruption issue exposed a cleavage at the bank between Mr. Wolfowitz, who initially wanted to make “governance” a priority equal to, or even ahead of, poverty alleviation, and Europeans who argued that poverty alleviation must trump all other considerations.

The people who agreed to describe the closed meeting of vice presidents last week would do so only when promised anonymity. The descriptions were provided both by critics and defenders of Mr. Wolfowitz, who said they wanted to ensure that the public got an accurate account of the proceedings.

Those who attended the meeting said that Mr. Wheeler, the managing director, did not raise the issue of the anticorruption agenda, but that the residue of the battles on that issue continued to be felt. Mr. Wheeler said that if Mr. Wolfowitz did not resign, bank staff and colleagues would direct their ire at the board of directors and also the finance ministries around the world for not taking action against him.

The board is studying whether Mr. Wolfowitz violated bank rules in arranging a pay-and-promotion package for Shaha Ali Riza, his companion, and whether she violated bank rules in traveling to Iraq in 2003 as a temporary employee of a defense contractor.

Mr. Bennett, the lawyer, is seeking to make the case that Mr. Wolfowitz’s role in arranging the package when Ms. Riza was detailed to the State Department in 2005 was not a “hanging offense.” But he has apparently failed in his effort to persuade the bank board to give Mr. Wolfowitz more time to make his case on the matter of Ms. Riza.

“I have heard that the board is not inclined to meet with me,” Mr. Bennett said in an interview. “I’m very concerned about that because I think there’s a lot of bad information out there, and I want to make sure the board has all the information, some of which I believe is exculpatory.”

A new indication of how deep the divisions are over Mr. Wolfowitz surfaced Tuesday. The bank board met to give support to a broad strategy on maternal health policies and got into a wrangle with the American director, Eli Whitney Debevoise II, over language referring to comprehensive reproductive “services,” which some equate with abortion.

Bank officials said that word of the dispute touched off a new round of e-mail messages and telephone calls at the bank, with most officials charging that the United States was trying to impose a conservative agenda on bank policies. Mr. Wolfowitz, seeking to allay suspicions on this issue, has told many bank officials that he favors all aspects of the bank’s family planning approaches.

By the end of the day, some bank officials said that the dispute had been resolved, and the word “services” stayed in the paper.

There were few details on Tuesday of what changes in his management team Mr. Wolfowitz might make. Bank officials said he had told colleagues that he might bring in a senior operating officer or even a “coach” to help him manage the bank without alienating people.

This was apparently a reference to what some said was an abrasive style by some of his aides. Officials said he also told the bank vice presidents last week that although many of them distrusted him, he regarded them as his top aides and looked to them for leadership on helping him run the bank.

He was said to have told the vice presidents that his future was now in the hands of the bank board, but his assumption was that at the end of the process, “I’ll be here.”

Copyright 2007 The New York Times Company

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13 Comments so far

  1. Nietzsche April 25th, 2007 1:57 pm

    For God’s sake Wolfie, buy yourself a rocking chair and a front porch. We all know you can afford it.

  2. bakunin April 25th, 2007 2:46 pm

    Wolfowitz MUST GO. Like the rest of the terminally arrogant neo-cons, he knows no shame and feels no personal responsibility for his heinous acts like promoting the war in Iraq. He has hired lawyer Robert Bennett to organize his fight to stay on at the World Bank, but he no longer has enough support within the bank to stay on. His fight is doomed, and ultimately he will be forced out.

  3. ericf April 25th, 2007 4:54 pm

    Something I haven’t seen addressed yet: does the board have the authority to remove Wolfowitz? Or are they just nervous about cheesing off Bush? Can Bush remove him at will, since this isn’t a US government agency? Can anyone tell him to go whether he likes it or not?

  4. Gail April 25th, 2007 8:04 pm

    “Mr. Wolfowitz has promised to mend his ways and has warned that a forced ouster would damage the bank. But it has become clear that there is a larger sense of unease, especially among Europeans, about American influence over the bank and its strategies toward ending poverty.”

    It was a “forced installation” that damaged the bank. A forced outster might actually bring some credit back to this intitution that has done very little to reduce world poverty, let alone, end it!

  5. ezeflyer April 25th, 2007 8:59 pm

    Mammon rules and the Wolf is at the door.

  6. seditious April 25th, 2007 9:32 pm

    The best thing this thug could do for the World Bank and everyone involved is to find the highest window at the bank and jump out of it.

  7. RJKT April 26th, 2007 3:32 am

    Given that its been a case of from one Wolf ( Wolfenson) to the other (Wolfowitz) - what chance do the lambs have.

  8. fd32 April 26th, 2007 7:14 am

    There sometimes appears,though not often enough for most of us, to be a measure of justice in this old world. We are witnessing an example of it in the Wolfowitz imbroglio. Really rotten people who achieve wealth and power actually do become intoxicated by their endless success even when their success is ill-gotten, and, if sufficiently lacking in character and wisdom,will ultimately be taken down by their own hubris. And what is more pleasing to witness than the downfall of a narcissistic Zionist neocon chickenhawk murdering racist? Nothing you can name, I submit.

  9. Wilo Keets April 26th, 2007 12:42 pm

    “Mr. Wolfowitz made an unusual confession. “I understand that I’ve lost a lot of trust, and I want to build that trust back up,” he said, according to people present.”

    Is it just me? It seems this “Bushie” idea that, until you are caught its ok to lie, cheat, steal, murder, etc… But once the lights go on, its all about “Building trust back up”.

    I call foul! Trust won’t be built up until all these crooks go to jail or the wall.

  10. luckylefty April 26th, 2007 1:23 pm

    Everyone who worked in the III Reich was “doing their job”. Everything they did was “legal” because they made it “legal”.

    No Americans will be allowed to return this country to its ‘Citizens’. Who will crush America as we crushed the Germans?

  11. purvis ames April 26th, 2007 1:45 pm

    The World Bank is a quasi-private enterprise financed by the sale of its bonds. It’s primary mission is to saddle resource rich third world countries with intolerable debt so as to privatize everything, even drinking water. Wolfowitz is just the latest piece of human filth to head this criminal enterprise and, of course, is merely a puppet of the Bush crime family.

  12. jungleboy April 27th, 2007 12:29 am

    “The Bush Crime Syndicate” what a band name! It a shame all the papers and media don’t do there job. If they did the world bank wouldn’t be here. All the “contractors” would be gone and we would all be in great health care and good jobs. Credible news, what a concept! Bias free! Bush family sold to the Nazis, and he is our prez? What laws could be made to stop these guys from disenfranchizing all these countless peoples?! We stopped Bush in WWII from selling the war machine to the Germans! These things have to happen again!? All that support this is awfull. Where/Who does the money come from?

  13. roncer April 27th, 2007 3:30 pm

    The World Bank is a den of corruption and has been for a long time. This Wolfowitz issue makes it look like there are some true leaders inside the bank that want to see honesty and righteous served. I don’t think so. I suggest to all that have interest in such goings on to have a look at John Perkin’s book, “Secret of an Economic hit Man”. It is very enlightening.

    Ron

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