The World Bank’s board of directors is expected to install Paul Wolfowitz as the Bank’s new president Thursday, despite the many arguments against his nomination.

While some pundits are comparing it to the nomination of Robert McNamara (who headed off to the Bank in 1968 after a disastrous escalation of the Vietnam War), others in the Washington media establishment have unabashedly welcomed it as a grand day for American exceptionalism, invoking familiar tropes of twisted logic that manage to conflate the neoconservative’s imperialist ideology with democracy.

“Despite the unpopularity of the Iraq war, Wolfowitz's strength is that he'll make the bank a tool of U.S. policy,” Sebastian Mallaby wrote in the Washington Post (3/28). “The problem with the Bush administration has not been that it bent the World Bank to its foreign policy. It's been that it often failed to do so. The planning for postwar Iraq might have been smarter if the administration had consulted the bank's experts early,” he added.

Mallaby’s clincher: Wolfowitz is the perfect person to “fight the corruption that deters private investment and to create the rule of law. … For this new challenge, democratic virtues such as accountability and transparency are essential, and appointing a passionate democratizer as World Bank president seems less outlandish after all.”

How Wolfowitz can be praised for “fighting corruption” and following the rule of law is difficult to fathom, given his track record. As Deputy Secretary of Defense, Wolfowitz somehow managed to ignore the Pentagon’s failure to follow competitive bidding requirements for the reconstruction of Iraq -- an omission that made Halliburton the king of American war profiteers. The Pentagon’s failure to protect American taxpayers has led to an ongoing epidemic of waste and fraud, as well as huge abuses of the “Iraqi people’s” oil revenues which, Wolfowitz assured the House Budget Committee before the war, would alone pay for the country’s reconstruction: “If we liberate Iraq those resources will belong to the Iraqi people.” Instead, billions were siphoned off by the occupational authority (CPA) to pay Halliburton and other U.S. contractors, leaving just $2.9 billion of $20.6 billion in oil-related revenues behind, . (This week Newsweek printed a photo of CPA officials ready to hand out stacks of money, with a caption that reads “Free Fraud Zone.” http://www.msnbc.msn.com/id/7306162/site/newsweek/)

If the contractors had finished the job, it would be harder to complain. But the dense tale of corruption and mismanagement created many problems that broadened popular opposition to the occupation. Wolfowitz did his part to alienate Iraqi hearts and minds. Recall that for months he barred foreign companies from receiving reconstruction contracts, a policy that delayed the procurement of spare parts for machinery and electrical generating equipment. The result: lower-than-estimated electrical generating capacity, further civil unrest and increased support for the resistance.

According to Rep. Henry Waxman (D-CA), many tales of waste and corruption involving the CPA’s abuse of the “Iraqi people’s” oil revenues were hidden from international auditors. The Development Fund for Iraq (DFI) -- successor to the Oil-for-Food Program that has received a startling amount of investigatory attention by comparison -- was created in May 2003 by a U.N. Security Council Resolution (1483). The UN resolution also created an obscure body known as the International advisory and Monitoring Board (IAMB) whose principle mission is to oversee U.S. stewardship of the DFI.

“We arguably have a greater obligation to oversee the DFI than the Oil for Food Program given that the DFI was under U.S. control,” Waxman pointed out in a letter to Christopher Shays (R-CT), chair of one of the five committees investigating the Oil-for-Food Program.

What does all that have to do with Paul Wolfowitz and the World Bank? It’s directly linked. As directed by the UN, the IAMB’s work is overseen by the heads of the IMF, the Arab Fund for Social and Economic Development and -- the World Bank.

In other words, unless Wolfowitz chooses to recuse himself, in his new position he will have a significant say in whether the IAMB will be able to pursue to the end its audit-based investigation which, all signs indicate, would lead back to Wolfowitz’s friends at the Pentagon and Halliburton.

Of course this is just one example, as Nobel Prize-winning ex-Bank economist Joseph Stiglitz has suggested, of how the Bank under Wolfowitz’s leadership is likely to "become an explicit instrument of US foreign policy" around the world. "It [the Bank] will presumably take a lead role in Iraqi reconstruction…. That would jeopardize its role as a multilateral development body."

Under Wolfowitz, any attempts to reform the Bank are likely also off the table. A Bank expert review panel’s recommendation that it stop loaning money for oil, mining and gas projects – already given little weight under current president James Wolfensohn – will be ditched for good in favor of helping jump-start the extraction of Iraq’s “fabulous” oil reserves. And Wolfowitz will be able to use the Bank’s significant resources to influence which countries and companies are involved. Want to guess what company (despite the many instances of bribery and fraud that should lead the bank to debar it) has the inside track?

Charlie Cray is director of the Center for Corporate Policy (www.corporatepolicy.org) and a collaborator on Halliburton Watch (http://www.halliburtonwatch.org). He is co-author of The People’s Business: Controlling Corporations and Restoring Democracy (Berrett-Koehler).

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