Wolfie out
[so who’s going to be his successor? will this weaken the US hold =
over the office? very interesting…]
FT.com - Published: May 17 2007 23:12 | Last updated: May 17 2007 23:12
Wolfowitz bows to pressure and quits World Bank By Krishna Guha and Eoin Callan in Washington
Paul Wolfowitz announced his resignation as president of the World =
Bank shortly after 6pm on Thursday, bringing to an end a turbulent =
two-year tenure as chief of the world=92s leading development institution.
His decision came after the US administration reluctantly yielded to =
pressure from European and other governments who insisted that he =
could not continue as bank president.
This follows the publication of a devastating report Monday into his =
handling of a secondment package for Shaha Riza, a bank official with =
whom he was romantically involved.
The report found that Mr Wolfowitz had broken the bank=92s code of =
conduct, three staff rules and the terms of his contract.
In a statement, the board on Thursday accepted Mr Wolfowitz=92s claim =
that he acted in good faith. His resignation will be effective June 30
His resignation while in good health is unprecedented in the history =
of the bank and marks what is likely to be an enduring shift in the =
balance of power at the institution, which has traditionally been =
dominated by the US-nominated president.
On Tuesday night Mr Wolfowitz had made an emotional plea to the =
bank=92s board to clear him of ethics violation charges, but it proved =
insufficient to keep him in the job. The White House earlier in the =
day had signalled for the first time that it was prepared to see him go.
The push to drive Mr Wolfowitz out was led by European =
representatives, but drew wide support from other regions of the =
world. With Canada accepting that Mr Wolfowitz should go, only Japan =
remained in the US camp.
The pressure on Mr Wolfowitz to step down has been growing all week =
following the publication of the report into his conduct. South =
African finance minister Trevor Manuel on Wednesday joined calls for =
Mr Wolfowitz=92s resignation and a German official told him he would =
not be welcome at a meeting in Berlin next week.
The report by the investigating panel had asked the bank=92s board to =
consider, in the light of its findings, =93whether Mr Wolfowitz will be =
able to provide the leadership needed to ensure that the bank =
continues to operate to the fullest extent possible in achieving its =
mandate=94.
It suggested the board should take into account in making this =
judgment the =93damage done to the reputation of the World Bank group =
and its president, the lack of confidence expressed by internal and =
external stakeholders in the present leadership, the erosion of =
operational effectiveness … and the important strategy and =
governance challenges the World Bank group is facing=94.
Following the release of the panel=92s report, 37 of the bank=92s 39 =
country directors sent a letter to the board demanding it =93practice =
what it preaches on governance and accountability=94.
The report asked the board to undertake a review of the bank=92s =
governance structures =93with the aim of ensuring that it is capable of =
effectively dealing with the challenges raised for the institution=94.
The report=92s findings =96 released by near unanimous demand of the =
board =96 had lent momentum to the push for Mr Wolfowitz to resign or =
be forced out.
It concluded that Mr Wolfowitz broke staff rule 3.01 on professional =
conduct, rule 5.02 on external service and 6.01 on pay. It stated =
that the initial pay rise, 8 per cent a year, later rises and =
presumed additional promotion on Ms Riza=92s return to the bank, were =
excessive and never envisaged by the bank=92s ethics committee.
It said Mr Wolfowitz=92s attitude evidenced =93questionable judgment and =
a preoccupation with self interest=94.
The report also concluded that Mr Wolfowitz violated the terms of his =
contract, which require him to abide by the bank=92s code of conduct.
The situation involving Ms Riza was =93not unique,=94 the report said, =
and that other members of staff had faced difficult choices in order =
to comply with rules prohibiting one employee from working under the =
ultimate authority of another with whom that person was romantically =
involved.
Mr Wolfowitz=92s decision to keep the bank=92s top lawyer out of the =
negotiations on terms and conditions for Ms Riza =93was inconsistent =
with the principle of good governance and concern for the interests =
of the bank=94 it said.
=93He did not agree with the advice he received about the legal =
requirements in connection with the conflict of interest, so he =
stopped seeking advice from the bank=92s legal vice-presidency.=94
The report dismissed Mr Wolfowitz=92s claim that he thought he had been =
asked by the ethics committee to provide detailed instructions on =
terms and conditions, saying =93the interpretation given by Mr =
Wolfowitz to the ethics committee=92s advice simply turns logic on its =
head.=94
The report noted =93with dismay the mis-statements to the press=94 =
attributed to one close Wolfowitz aide, and blasted Mr Wolfowitz and =
his lawyer for engaging in =93attacks on the board and on a board =
process=94 that was mandated by finance ministers at the Development =
Committee meeting in April.
It said Mr Wolfowitz=92s attitude in general =93evidences questionable =
judgment and a preoccupation with self-interest over institutional =
best interest=94.
Speculation swirled over possible successors to Mr Wolfowitz. Some =
people close to the administration suggested that Bob Zoellick, the =
former deputy secretary of state, could be nominated for the job. =
Other sources speculated that Paul Volcker, the former chairman of =
the Federal Reserve, could be brought in as an interim president.