the rungs continue to fall...getting ever closer to the TOP
How Wolfowitz lost the World Bank war
By Steven R. Weisman
Thursday, May 17, 2007
WASHINGTON: Paul Wolfowitz was chafing at the Pentagon in early 2005, thwarted in his bid to become defense secretary or national security adviser, while the Iraq war deteriorated. When the World Bank presidency came open, he jumped at the opportunity. It offered him a "second chance" to redeem his reputation and realize his ambitions, a friend says.
Months later, another friend ran into the new bank president and asked how he was enjoying the job. Wolfowitz unleashed a torrent of bitter complaints about the bank's bureaucracy, saying it was the worst he had ever seen - worse than the Pentagon.
Now, as friends and critics sort through the wreckage of Wolfowitz's bank career, they wonder if it was doomed from the outset.
Supporters say that he arrived at the bank, a citadel of liberalism, from a four-year stint at the Pentagon, bearing the stigma of Iraq. He was determined to shake up the status quo by rooting out what he saw as corruption and waste and demanding measurable results from the bank's many aid programs.
"The bank leadership didn't like Paul challenging their assumptions," said Robert Holland 3rd, who represented the Bush administration on the board until last year. "They have all been there a long time, and they are used to promoting each other's interests and scratching each other's back."
But others think Wolfowitz, in seeking a second chance after Iraq, repeated the same mistakes he made at the Pentagon of adopting a single-minded position on certain matters, refusing to entertain alternative views and marginalizing dissenters.
"Wolfowitz unsettled people from the outset," said Manish Bapna, executive director of the Bank Information Center, an independent watchdog group. "His style was seen as an ad hoc subjective approach to punishing enemies and rewarding friends."
At the Pentagon, Wolfowitz was an early champion of going to war with Iraq, just a few days after Sept. 11, 2001, and continued his advocacy for regime change in Iraq over the next year. His time at the Pentagon was also characterized by infighting, especially with the Central Intelligence Agency, which he thought underestimated Iraq as a threat to the United States. He clashed with General Eric Shinseki, the army chief of staff, and others who warned - correctly, it turned out - that the United States needed more forces in Iraq. His vision of democracy in the Arab world also ran aground in Baghdad.
Despite the administration's aversion to multilateral institutions, many at the World Bank had initially hoped that Wolfowitz - a neoconservative intellectual, former academic dean and ambassador to Indonesia - could help forge a new consensus with liberals on ways to more effectively aid poor countries.
But his low-key, intellectual approach to subjects belied a determination to get his way, according to bank officials.
These accounts, coming as Wolfowitz was negotiating the terms of his departure, are from friends and current and former colleagues, both at the Pentagon and the World Bank, who have remained in contact with him.
Wolfowitz waged his first fights even before he took office, when he demanded provisions in his contract that would allow him to write a book about Iraq and accept fees for public speeches.
When these were rejected, he soured on the office of the general counsel, Roberto Dañino, the first official who suggested to him that Shaha Ali Riza, his companion and a bank employee, could not remain at the bank because she would come under his supervision.
Recently released bank documents show that Wolfowitz rejected Dañino's advice on Riza and went directly to the bank board's ethics committee in search of a different ruling. He also refused to deal with the general counsel on all other matters. An associate said he called Dañino "incompetent."
Dañino, forced to resign last year, told a reporter at the time: "He presumes that anyone who opposes him is incompetent or corrupt."
The battle with Dañino laid the groundwork for battles with Ad Melkert, the head of the bank board's ethics committee, and Xavier Coll, a vice president for human resources, over the handling of Riza's case.
Coll testified that Wolfowitz had told him to keep the terms of Riza's pay package secret from Melkert and Dañino. Wolfowitz disputed his contention.
In early 2006, according to a memorandum from Coll, the bank president lacerated him with expletives, charging that his enemies were leaking details of Riza's pay to the press. The disagreements over the handling of the pay, promotion and transfer of his companion might have faded into irrelevance had Wolfowitz not waged other battles with the bank staff, many bank officials say.
Wolfowitz also rankled people by bringing in two close aides from the Bush administration, Robin Cleveland and Kevin Kellems, and using them not only as advisers but as managers who issued directives to senior officers.
Among those with whom he tangled were Christiaan Poortman, a vice president for the Middle East, over Wolfowitz's demand that the bank establish a greater presence in Iraq. Poortman, ordered to transfer to Kazakhstan, resigned instead.
Gobind Nankani, a vice president for Africa, also resigned after disputes with Wolfowitz over the size of his staff, according to several bank officials.
Another official who left was Shengman Zhang, the top deputy to James Wolfensohn, Wolfowitz's predecessor. Wolfowitz charged that it was hypocritical for bank officials to allow Zhang's wife to work at the bank but to banish Riza. Zhang, now a senior vice president at Citigroup in Hong Kong, was furious, several associates say, because bank rules permit husbands and wives to work at the bank under circumscribed conditions, which Zhang said he followed, but they bar bank employees from having a sexual relationship with a top bank official outside of marriage.
"What Paul didn't understand is that the World Bank presidency is not inherently a powerful job," said a Bush administration official, speaking anonymously to be more candid. "A bank president is successful only if he can form alliances with the bank's many fiefdoms. Wolfowitz didn't ally with those fiefdoms. He alienated them."
In a dispute with Chad over its use of revenues from a bank-financed oil pipeline, Cleveland ordered a suspension of funding to Chad, according to several officials.
"It produced unpleasant negotiations and made people angry," said a bank official. "The approach by Mr. Wolfowitz and Ms. Cleveland was one of confrontation. It positioned us as adversaries rather than partners."
A similar decision to suspend funding for a health program in India last year rankled the British, a funding partner in the program. It caused the British development minister, Hilary Benn, to retaliate by withdrawing a nominal amount of funding for another bank program.
That matter helped ensure that Benn and his ally, Gordon Brown, chancellor of the Exchequer and expected to be the next prime minister of Britain, have not been in Wolfowitz's corner in the current fight over his future.
In his final appeal to the bank board to save his job, Wolfowitz promised to change his management style. His statement was filled with phrases like "I relied much too long on advisers who came in with me from the outside" and "I am aware of the concern that I need to place more trust in the staff."
Wolfowitz also said he hoped to continue pressing for programs to stop corruption, combat AIDS in Africa and avian flu in Asia, achieve new records of funding for the world's poorest countries of the world and do more to combat global warming.
In the end, however, his supporters said his willingness to resign - the terms for which were still being hammered out Thursday afternoon - came not because he had violated rules over the handling of Riza's compensation, but because his leadership style had impeded progress on these issues. Whether or not the denouement was inevitable, Wolfowitz and his supporters came to see it more as a result of the war within the bank than the one in Iraq. |
