Tuesday, May 01, 2007

A few articles on Wolfowitz

I'm linking here a few articles on Wolfowitz I don't want to lose track of. (Update, I'll probably add a few more over time. Also, see things in the comments, such as the FT document of Danino's statement.)

David Ignatius, Washington Post, May 2, 2007, here, endorsing the lynching on the grounds not that the scandal was a scandal but that Wolfowitz brought it on himself by being a neocon ... fairly typical of Ignatius, I guess, chanelling the spirit of the Bank's high-toned mobocracy but not admitting it, and endorsing the idea that the only way to "reform" the World Bank is to do ... what the senior professional staff wanted all along. Ignatius wraps this in the "more in sorrow than anger," but aimed at declaring Wolfowitz's departure a done deal. What Ignatius describes as the intellectual arrogance of the Bank staff would be better described as its own very special internal culture of impunity. (Oh well, catty but true, Ignatius' new novel is not very good, either - I read a big chunk of it hanging out at Barnes & Noble over the weekend but realized I'd never manage to get all the way through it. Cover photo is great, though.)

Bret Stephens in the WSJ, here, May 1, 2007, noting that Wolfowitz followed the advice of the Bank's very own ethics committee - and that the Bank has a long history of special deals and conflicts of interest and all sorts of sorry stuff.

My own view is that Wolfowitz ought to call for full disclosure by all Bank personnel of all contracts and compensation arrangements, and that in the interests of complete transparency, they should all be posted as a matter of policy to the internet. That would reveal, I am quite certain, an amazing number of special arrangements, private deals, inequities in compensation. (I would make this a requirement of nonprofit corporate governance across the board.)

Indeed, my experience of nonprofit organizations - many of which have long traditions of lack of transparency in such matters despite the issues of public trust - suggests that organizations where employees cut many special deals have a particular tendency to shaft the women in the organization. For what it's worth, my experience in the nonprofit world suggests that maximum transparency tends to favor gender equity. And that secretive organizations like the World Bank often conceal considerable gender inequity through lack of transparency.

No doubt the staff kicking and screaming surrounding a call for compensation transparency at the Bank would make it impossible to implement. So I would urge Wolfowitz to announce his own, personal transparency - let him post his tax returns and any contracts and arrangements on the web - and call for voluntary compliance by people of integrity at the Bank. Grandfather the existing staff, while calling on them to do as Ban Ki Moon has done - and Annan never did - and make a completely transparent financial disclosure. Let's see who is willing to go public and who not.

The Wall Street Journal has an editorial in yesterday's April 30, 2007 paper dissecting the trail of bad faith at the Bank, and the members of its ethics committee in particular, here.

The Washington Post has a story on Wolfowitz's defense of himself by staff writer Karen DeYoung, here, that actually shows that a reporter has read the documents produced by the Bank's ethics committee. It is a cut above the rest of the reporting, particularly the execrable work done at the Financial Times.

Andrew Young has an op-ed supporting Wolfowitz in yesterday's April 30, 2007 Washington Post, here. I don't suppose it will sway any Euro-grandees of the Bank, but perhaps it will give the White House some backbone, or anyway some cover to support Wolfowitz.

The Right Man for the World Bank

By Andrew Young

Monday, April 30, 2007; A15
Wash Post

"Daddy King" -- the Rev. Martin Luther King Sr. -- was always reminding us that "hate is too great a burden to bear." Even after a childhood of racist oppression and the cruel assassination of both his son Martin by white men and his wife by a deranged black man as she sat at the organ of Ebenezer Baptist Church playing the Lord's Prayer, he daily affirmed that we must never stoop to hate.

Yet I came closer to hating Paul Wolfowitz than I ever came to hating Bull Connor, the Ku Klux Klan or the killers of Martin Luther King Jr.

You see, I saw Wolfowitz as the neocon policy wonk who led us into a war in Iraq but who had never even been in a street fight himself. My personal fantasy was to catch him alone and give him a good thrashing.

It seems our European friends are now indulging my fantasy. But I've come to realize how wrong that impulse is and how right Archbishop Desmond Tutu is when he says there's "no future without forgiveness."

I've also come to believe that the impatience of Wolfowitz and others with Saddam Hussein's violence grew from a more massive destruction than the world could ignore -- Hussein's murder of more than a million Shiites, Kurds, Kuwaitis and Iranians, even without possessing atomic weapons. I was in Kuwait after the Iraqi invasion of 1990. I saw the horror and bloodshed of their occupation, and I knew Hussein had to be restrained. I may disagree with the means that were used, but not with the problem.

At the World Bank, however, an aggressive impatience with the evils of disease and poverty is exactly what is needed.

I first spent time with Paul Wolfowitz in Anacostia in 2005, when I participated in a program of the Operation Hope financial literacy initiative. In reading the program notes, I discovered that his PhD from the University of Chicago concerned the politics and economics of water resources management and that George Shultz had been his mentor at the State Department. When he was Treasury secretary, Shultz took me on my first trip to Africa as a congressional delegate to a World Bank gathering in Nairobi. Shultz also opened the diplomatic dialogue with the African National Congress at a time when much of Europe and America wrote off Oliver Tambo, Nelson Mandela and Thabo Mbeki as hopeless communist terrorists.

I therefore decided to work with Paul Wolfowitz as a brother, and I have not been disappointed. We were together in Nigeria in 2006 for a Leon H. Sullivan Summit. I saw his effectiveness and warmth at work in a setting of 12 heads of state and 2,000 delegates from 22 countries.

His commitment and aggressiveness in promoting African development, as well as his abhorrence of needless bureaucratic "CYA" behavior, have been welcomed by those who love Africa and the developing world as well as by those willing to admit the complicity of the haves in the crisis of the have-nots.

It is my sincere hope that our European friends and allies can make the distinction between the U.S. Defense Department and the World Bank. While we still abhor the mismanagement and hubris of the Iraq invasion, we can share an aggressive impatience with poverty, disease, illiteracy and bureaucratic nitpicking and get on with our efforts to prevent the future wars and environmental crises.

France, Norway and the Netherlands have always been at the forefront of this struggle. I'm hopeful they will see the greater good of working together at the World Bank on these present evils and allow history, the World Court or the United Nations to judge Wolfowitz on his role in our previous conflicts.

We must get beyond the current crisis at the World Bank, a careful examination of which will show that Wolfowitz was operating in what he felt was the best interest of the institution and with the guidance of its ethics committee.

This crisis also should not redound to the detriment of Wolfowitz's companion, Shaha Riza, a British Muslim woman who is an admired World Bank professional and a champion of human rights in the Muslim world.

I am a Protestant Christian minister, a product of America's excessive Puritanism. I've always looked to Europe for sophistication, temperance and the tolerance the world needs to survive. It is my appeal that we offer Paul Wolfowitz the same chance to learn from the misjudgments of the past and move on together to construct a more just, prosperous and nonviolent world.

Andrew Young has served as executive director of the Southern Christian Leadership Conference, as mayor of Atlanta and as the U.S. ambassador to the United Nations. He is co-chairman of Good Works International, a consulting firm offering advice in emerging markets in the Caribbean and Africa.


Anonymous said...

Roberto DaƱino statement

April 30

1. Upon PW’s election as President of The World Bank in March 2005, the Board as is customary entrusted the negotiation of his contract to the Dean and Co-Dean of the Board, with the assistance of the General Counsel (GC) of the Bank. At the time, I was the Bank’s GC.

2. PW retained the firm of Williams & Connolly (Robert Barnett / RB) to represent him in the negotiation .

3. At the time of his nomination, in March 2005, there were newspaper reports about the relationship of PW with SR which led to a press release from PW vowing to comply with all Bank rules. I was therefore instructed by the Deans to discuss the matter with PW’s attorney. During the negotiation of his contract during the month of May 2005, PW acknowledged through his lawyers that he was in ”a de facto conflict of interest” under Staff Rule 3.01, paragraph 4.02.

4. In the discussion with his lawyers, I indicated to them that SR would need to be removed from any position having a direct or indirect reporting line to PW. This could be achieved through termination with compensation, external secondment at the Bank’s expense, or reassignment to one of the Bank units not reporting to the President, i.e, Administrative Tribunal, Evaluation Office, Inspection Panel or Executive Directors’ offices.

5. PW’s attorney rejected these alternatives and I believed had proposed instead to cure the conflict by having PW (i) recuse himself from all professional contact with SR and (ii) recuse himself from all personnel actions regarding her.

6. Before submitting this matter, amongst others relating to his contract, for the consideration of the Deans, I communicated in writing to RB my understanding of the above proposal, i.e., PW’s recusal from both professional contact and personnel actions.


8. I communicated this to the Deans who determined, correctly, in my view, that the proposal was insufficient because it provided for ongoing professional contact violated Bank rules. They noted that spouses and domestic partners are required (Staff Rule 4.01, paragraph 5.02) to be excluded from any position with a direct or indirect reporting relationship or professional contact with the other spouse or partner, and that neither can be involved in any personnel actions related to the other.

9. I informed RB that under the Bank’s rules PW’s proposal was unacceptable, and that the problem was not with respect to his recusal from personnel matters but rather with his insistence on maintaining ongoing professional contact with SR.

10. PW insisted on his proposal to maintain ongoing professional contact and formally requested that the matter be referred to the Ethics Committee for resolution.

11. The EC took jurisdiction of the matter, obtained legal advice from me as General Counsel, interviewed various Bank officers and reviewed all options available as discussed in the Memorandum in Annex 6. After extensively analyzing the matter, the EC provided guidance to PW on how to cure the de facto conflict of interest defined in Staff Rule 3.01, paragraph 4.02.

12. The specific guidance provided by the EC was that PW (a) needed to cause SR to be seconded at the Bank’s expense to a position outside the Bank but (b) could consider an in situ promotion as a way to mitigate the disruption in her Bank career, and could take into account that she was already on the short list for a competitive promotion. No additional benefits were ever to my knowledge recommended by the EC. It should also be noted that the EC could not itself directly order changes in staff personnel arrangements because of the limitations of the Articles of Agreement, preserving to the President the responsibility for the organization, appointment and dismissal of staff, subject only to the ”general control” of the Board.

13. I understand that, to avoid embarrassment to PW, the Chair of the EC and PW agreed that the EC’s guidance would be provided to him on an informal basis so as when it was implemented, PW would withdraw his formal request for guidance.

14. PW informed the EC that the EC’s informal advice had been implemented and therefore that the conflict had been resolved. PW withdrew his formal request for EC guidance and the EC proceeded to close the case and inform the Board that the matter had been resolved.

15. As indicated to the Cmte, I believe PW acted correctly when he instructed the Vice President, Human Resources (VPHR) to proceed with (a) the secondment and (b) the in situ promotion, because these two steps were in accordance with the guidance received from the EC.

16. However, as I also indicated to the Cmte, I believe PW acted incorrectly when he instructed that,in addition to (a) and (b), the VPHR should also (c) make an extraordinary salary increase, (d) guarantee an outstanding review for each year of secondment (with the corresponding top yearly salary increase), and (e) guarantee a second promotion upon her return to the Bank. I did not learn of these actions prior to my departure from the Bank in January 2006.

17. In my opinion, this was incorrect because:

(i) PW was in a de facto conflict of interest under Staff Rule 3.01, paragraph 4.02, which should have precluded him from providing these benefits to the very person who was part of the conflict;

(ii)These benefits far exceeded, and were granted in addition to, those recommended by the EC;

(iii) None of the additional benefits were disclosed to or approved by the Board, the EC or the General Counsel (I also understand they were granted over the objections of the VPHR but I was not involved in that phase); and

(iv) The Bank was effectively deprived of legal representation to review whether these benefits complied with Bank rules.

18. From the released documents, I have now learned that the Gibson Dunn law firm was hired by PW to review the arrangements that had already agreed between PW and SR. But, their legal opinion clearly indicates that they made a limited review of the matter and there is no indication that they reviewed whether the agreement complied with the Bank’s own rules.

19. I have now learned from Ms. Robin Cleveland ”draft” email that I, as General Counsel, was barred from participating from this point onwards because Ms. Cleveland had instructed the VPHR to exclude me on the ground that the GC could not represent both the EC and the President. She apparently was unaware or ignored that the GC is Legal Advisor of the Bank as a whole and not the President’s personal lawyer. Furthermore, in this case, PW already had his own personal legal representation. Nevertheless, as a consequence of Ms. Cleveland’s decision, the Bank did not have legal representation to assure compliance with its own legal framework. Thereafter, I was also barred from any meaningful professional contact with the President and that situation led to my decision to resign from the Bank.

20. I have also indicated to the Cmte that I did not believe that a lawsuit by SR, if at all possible given the Bank’s immunities, would be likely to succeed on the merits since the Bank was simply enforcing its own Staff Rules and doing so by providing for adequate mitigation for any disruption in her career.

21. I have also indicated to the Cmte that I believe PW acted incorrectly, not only providing the additional benefits discussed in 17 above, but also by trying to blame the Board, the EC, the General Counsel and the VPHR when these actions became public. It is only after the inaccurate assertions of PW or his spokespersons were denied by the affected parties and when PW’s express instructions in writing became public, that PW admitted he had made a mistake.

22. However, PW has subsequently indicated that his mistake was his acceptance of the EC’s rejection of his recusal. But the EC did not reject his recusal; it only decided that his proposal was insufficient inasmuch it insisted on maintaining professional contact with SR. PW has also said that those criticizing him do so because they oppose his anti corruption agenda or because they disagree with his role in the Iraq war. This is simply not true in my case.

23. I would also like to record my strong protest at the way PW has excerpted the published documents of the EC in the Bank’s web site. The excerpting relating to statements attributed to me is misleading.

24. The first excerpt mentions my mail to RB asking him to confirm that the President would agree to recuse himself both from professional contact and from personnel actions. However, the selected statements omit his reply which expressly indicated that the President ”would not -- I repeat, not involve recusal”, from professional contact with SR. The omission thus presents a half-truth that misleads the reader and hides PW’s wish not to comply with Bank rules.

25. A second excerpt is a sentence from a long background memo for the EC which creates the misimpression that an extraordinary salary increase was recommended in addition to the in situ promotion. This certainly was not the advice provided to the President. The advice did not include a salary increase beyond the one normally included in a promotion, nor did it suggest guaranteeing ”outstanding” reviews or promising an additional second promotion upon her return. However, by just quoting one sentence out of a menu of options, the excerpt again misleads readers to believe that the extraordinary salary increase was somehow recommended in addition to the in situ promotion.

26. Consequently, I formally request that the Board take the necessary steps to have these misleading statements removed or to present them in a complete and non-misleading way.

27. Finally, the Cmte requested my overall view of this matter. In my opinion, the matter presents not merely questions of legal compliance but also -- and more importantly -- questions about the moral authority of the Bank’s President and the confidence he commands from the Bank’s own staff and around the world. I believe that PW made serious substantive errors by providing unauthorized benefits to a person with whom he had a relationship that created a conflict of interest. As indicated in 17 above, the EC advised him to do (a) and (b), but he decided on his own and despite his conflict of interest also to do (c), (d) and (e). He then failed to disclose these actions and later blamed them on others, apparently trying to deceive the board, the staff, and the general public. He or his spokespersons falsely suggested that his actions had been approved by the Board, the EC, the GC and/or the VPHR. Later statements have charged his accusers with political motivations. In my judgment, these actions and statements have badly hurt the morale of the staff, damaged the reputation of the Bank, and eroded his moral authority to lead the Bank.

Copyright The Financial Times Limited 2007


petrenkov said...

It is rather interesting for me to read that article. Thanks the author for it. I like such topics and anything connected to them. I definitely want to read a bit more soon.

Best wishes
Darek Wish