Paul Wolfowitz World Bank Scandal

Paul Wolfowitz’s tenure as president of the International Bank of Reconstruction and Development (better known as the World Bank) appears about to end after a scandal over preferential treatment of his girlfriend. The bank’s staff association and the Financial Times are calling for his resignation, which I suspect will coon be forthcoming.

AP’s Jeannine Aversa has the basic details:

At issue are the generous compensation and pay raises of a bank employee, Shaha Riza, who has dated Wolfowitz. She was given an assignment at the State Department in September 2005, shortly after he became bank president. “In hindsight I wish I had trusted my original instincts and kept myself out of the negotiations,” Wolfowitz said. “I made a mistake, for which I am sorry.”

The World Bank Group Staff Association is demanding that Wolfowitz step down. “The president must acknowledge that his conduct has compromised the integrity and effectiveness of the World Bank Group and has destroyed the staff’s trust in his leadership,” the association said Thursday. “He must act honorably and resign.”

The FT editorial board agrees.

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 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.

It’s hard to disagree.

Wolfowitz may well have made an honest mistake here. My guess is that Riza is extraordinarily bright and capable and she may well have been worthy of both the position to which she was assigned and the salary she was paid. Still, Wolfowitz should have had enough judgment to have those decisions made by an independent body–or better yet, persuaded his girlfriend to seek employment in the private sector to remove all doubt of impropriety. Wolfowitz is a smart man with years of experience at the highest levels of public policy making. He simply should have known better.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. legion says:

    The WaPo article has more… unflattering details:

    Wolfowitz attempted to address about 200 staffers gathered in the bank’s central atrium but left after some began hissing, booing, and chanting “Resign. . . . Resign.” He had approached the gathering after holding a news conference in which he said, “I made a mistake for which I am sorry.”

    He didn’t make a mistake, he committed a crime.

    Bank insiders confirmed reports from the bank’s staff association that Wolfowitz directed personnel officials to give Shaha Riza, his longtime companion, an automatic “outstanding” rating and the highest possible pay raises during an indefinite posting at the State Department, as well as a promotion upon her return to the bank.

    One of these days people are going to look back and realize that pretty much every single person Bush has ever trusted is either a crook, an idiot, or both.

  2. James Joyner says:

    automatic “outstanding” rating and the highest possible pay raises

    First I’ve seen that detail. It’s hard to come up with an innocent explanation for that. Yikes.

  3. Steven Plunk says:

    I’ve been a fan of Wolfowitz. Very intelligent and capable to say the least but this is a big mistake. He should resign and move on.

    That said I fail to see how “pretty much every single person Bush has ever trusted is either a crook, an idiot, or both”. Extreme statements like that really don’t say much but they do expose the old Bush derangment syndrome.

    We can’t connect every bad thing in the world to Bush.

  4. M1EK says:

    “pretty much every single person Bush has ever trusted is either a crook, an idiot, or both”

    When you follow Cheney’s job history, you find out he hasn’t ever really succeeded at _anything_. Ditto with guys he brought on board like Feith.

    There’s a few who have succeeded but are pretty clearly crooks: Rove, Rumsfield (succeeded at some things earlier, at least), etc.

    I wouldn’t go with “everyone”, but he sure as heck seems to have trusted the crooks and idiots more than the honest guys like Powell and Scowcroft.

  5. “When you follow Cheney’s job history, you find out he hasn’t ever really succeeded at _anything_.”

    Other than being President Ford’s chief of staff, a well-respected Congressman, and the Defense Secretary during the victorious Persian Gulf War Cheney’s been a complete failure.

  6. M1EK says:


    He’s been appointed to a lot of positions – but his decisions in those roles have uniformly been disasters. The Gulf War was saved largely by the people around him.

    Here’s a good start:

  7. legion says:

    Yeah, perhaps not _every_ one, but jeez – Rumsfeld, L Paul Bremer, Brownie over at FEMA… Remember Christie Todd Whitman? Remember how her EPA blatantly, flat-out lied about the safety & air quality around Ground Zero just after 9-11 to get people back to work? An old friend of mine died as a direct result of that lie. And then there’s Mueller, the head of the FBI who can;t seem to make his own agency obey even the marginally-restrictive laws the Patriot Act left for them. Speaking of intel, there was “slam-dunk” Tenet. And his semi-replacement, “death squad” Negroponte? He had lots of fun being “in charge” of the intelligence community, except for having no direct authority over anyone outside his personal staff & no budget authority, and no real ability to “reform” anything… he bailed, and I suppose his replacement McConnell hasn’t screwed up yet, but then, considering the lack of ‘hands-on’ that position has (kinda like GWOT Czar! Who’ll get _that_ hot potato?), his best bet is to keep a low profile.

    Oooh, and Chertoff over at Homeland Security – how many bombs have test teams been able to smuggle through airport security _this_ month? How’s that fence across the Mexican border coming? And let’s not forget Condi Rice… As Security Advisor, she couldn’t be bothered to keep Bush informed about anything he wasn’t interested in… you remember when she became part of the parade of people put in charge of re-building Iraq, because they suddenly realized they had never actually planned for the re-building part? How long did she have that job, two weeks? And as SecState, has she been able to recover _any_ of the respect the world has lost for us over the past few years? (Admittedly, that’d be a herculean task for _anyone_)…

    I’m willing to believe there’s some out there, but can you name some Bush senior appointees who _haven’t_ been jokes or failures?

  8. Steven Plunk says:

    Rumsfeld led the Pentagon through major changes internally and led us through a difficult war. Brown got dragged into the swamp of Louisiana politics and corruption while congress was telling him to do anything and do it fast. The Clinton administration had the same slam dunk intel as well as other countries. Mueller’s FBI is full of partisan malcontents. Chertoff’s homeland security has kept us safe, as in no real bombs.

    My point is we can look at this administration and both come away with a different opinion that is still reasonable and sound. Trying to constantly make this administration look bad is boring many of us to tears. Wolfowitz’z thing is his thing, stupid, dumb, but not related to Pres. Bush in the slightest.

  9. legion says:

    Well, Rumsfeld “led”, according to insiders, by basically bulldozing, insulting, and firing anyone who disagreed with him. Brown was incompetent long before Katrina – he may have been getting confusing direction from Congress, but during the hurricaine itself, he adamantly refused to do what any rational person would have expected to be “his job”. If Mueller’s FBI is full of partisan malcontents, why _shouldn’t_ Mueller have some of the blame? And how many “terror suspects” has DHS arrested & prosecuted? You’d think that’d be a)easy to pin and b) something they’d want to blast all over the airwaves… And how many actual _attempts_ has DHS stopped? As opposed to their own security tests, which they routinely fail…

    Wolfowitz’z thing is his thing, stupid, dumb, but not related to Pres. Bush in the slightest.

    On this, actually, I agree. This is totally Wolfie’s screwup, and bringing Bush into it wasn’t really necessary. It just makes me laugh. When I’m not crying.

  10. M1EK says:

    “Wolfowitz’z thing is his thing, stupid, dumb, but not related to Pres. Bush in the slightest.”

    People who expressed concerns about Bush’s comparative lack of intelligence and experience were told that he’d be surrounding himself with excellent people who would advise him well.

    Remember that?

  11. Andy says:

    I’ve been a fan of Wolfowitz. Very intelligent and capable to say the least but this is a big mistake. He should resign and move on.

    I guess that’s one way to look at someone who was catastrophically wrong about the rebuilding of Iraq and completely incapable of running the World Bank in any sort of rational manner.

  12. C.Wagener says:

    Wow, if Rolling Stone Magazine thinks there’s a problem with Cheney, I’m convinced. I wonder what High Times has to say.

  13. cj says:

    First of all, I never realized the World Bank was such a lilly-white organization.

    Secondly, I’ve never seen such a self-serving list of reasons-why-we-totally-disagree-with-this-guy, but-we’re-jumping-on-THIS-reason-to-fire-him.

    Thirdly, take none of the above as a defense of Wolfowitz.

  14. RR says:

    He should have “known better”?

    Well, that is the understatement of the decade.