Paul Wolfowitz’s future as World Bank president hung in the balance on Friday after the bank’s board issued a damaging finding of facts on his role in the Riza affair and promised to reach a decision on what steps to take next “expeditiously”. The board said its “consideration of the matter” would “focus on all the relevant governance implications for the Bank”.
The promise of further action kept up pressure on Mr Wolfowitz to step down of his own accord to avoid possible censure for securing a large pay rise and promotion for Shaha Riza, a former bank official with whom he was romantically involved. As of 9pm Friday, though, there was no indication that the board was ready to try to force Mr Wolfowitz to quit, or that the bank president – who issued a public apology on Thursday – was ready to give up the fight.
Editorial comment:
Pressure on Mr Wolfowitz mounted when the bank’s former top legal officer confirmed to the FT that he told the board’s ethics committee there was no serious legal risk to the bank if it had dealt with the Riza situation by offering her a severance package rather than the attractive secondment deal Mr Wolfowitz eventually dictated – challenging one justification Mr Wolfowitz gave a day earlier for his actions.
World economic leaders gathering in Washington for the semi-annual meetings of the World Bank and IMF were tightlipped over Mr Wolfowitz’s future.Trevor Manuel, South Africa’s finance minister, told reporters political leaders should avoid rushing to judgment. `We must not behave like a kangaroo court,’’ he said.
The first US critics started to call for Mr Wolfowitz to go on Friday. John Edwards, the Democratic presidential candidate and former senator, said: “America’s ability to lead in the fight against global poverty is undermined by Paul Wolfowitz at the helm of the World Bank. He should resign.”
Related story:
Ken Rogoff, a former chief economist at the International Monetary Fund, told the FT: “President Wolfowitz’s credibility is so badly compromised that the board is eventually...going to have to force him to resign.”
There is concern within the administration about the damage the civil war inside the Bank is doing to the institution. But, in an apparent hardening of the White House position, a spokesperson said “the president has full confidence in Paul Wolfowitz’’ adding “we expect him to remain as World Bank president.’
The board announcement came after a marathon emergency session of the 24-member board, made up of representatives of the bank’s shareholder governments. People close to the board said European members took the lead and pushed for full disclosure of internal documents and the threat of action – despite some initial resistance from the US, which nominated Mr Wolfowitz.
François Bourguignon, the World Bank’s respected chief economist, told the FT that the future “efficiency and efficacy of the bank may be damaged, may be hurt, by what is going on today”. Mr Bourguinon said: “What we have to hope for is that there will be a quick resolution – whether that resolution goes in one direction or it goes in another direction.”
In Europe meanwhile, development activists, many of whom opposed Mr Wolfowitz’s appointment, put pressure on their governments to demand his resignation. Alex Wilks, co-ordinator of the European Network on Debt and Development said: “we are concerned that too many of them are wobbling and might let him off the hook in exchange for vague promises”.
