Another Perspective

Paul and the Big Bad Bank

Wolfowitz proved no match for the wolves.

By 5.18.07

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When the idea was first suggested that he should take over as president of the World Bank, Paul Wolfowitz must have thought he had just fallen into a honey pot. One term as the head of that immense international institution and he would be on the way to some multi-million dollar top post at any one of a number of major financial firms.

He was a natural for the job they had said at the White House. Someone decided that his previous stints as Ambassador to Indonesia and Asst. Secretary of State for East Asian and Pacific Affairs had given Paul adequate exposure to developing economies to justify the top job at the World Bank. The trouble was that he and they ignored the fact that he knew nothing of the world of multinational banking.

To begin with, what had been an interesting and manageable organization when Robert McNamara made the transition from Sec. of Defense to the World Bank forty years ago was now a top-heavy financial behemoth. Its table of organization is a melange of administrative and operational sinecures where regional vice-presidents vie with functional vice-presidents in asserting authority over twenty billion dollars of projects annually.

The bank's board of governors has never seriously considered the changed character of their client nations. If they had, they would have recognized that now only the poorer countries in Africa and Central America really need the specific services of the World Bank. Furthermore, the African Development Bank and the Inter-American Development Bank could be funded to handle any financial or technical contributions now offered by the present World Bank structure.

Two years ago Wolfowitz arrived at the bank's Washington headquarters determined to modernize his new charge. Corruption in World Bank projects abroad was endemic and well known. The extremely well paid staff was bloated in the home office beyond all parameters even for a town that is used to such organizational obesity. No problem for Paul, though. He hadn't been daunted by the famous Pentagon bureaucracy. How much more difficult could the World Bank be?

The part that Wolfowitz missed, however, was that he was not only considered an outsider by the immense staff of international banking careerists, but he was also one of the architects of the dreaded Iraq War. In the eyes of the leadership of the world's leading liberal financial instrument the United States had become an international aggressor. Paul Wolfowitz was seen as Al Capone taking over the Salvation Army.

Paul obviously sensed some of this antagonism, but he completely misjudged the willingness of the professional staff and directorate to do him in. His focus on ending corruption and incompetence as well as rationalizing priorities ran completely counter to the culture of indolent sophistication of the bank.

The word went out that Wolfowitz intended to Rumsfeldize the bank. "Leaner and meaner" was the watchword Paul put forth. But this was not the Pentagon, and Paul Wolfowitz did not have the chain of command to pull up short.

THEN HE MADE HIS really big mistake. He and Shaha Ali Riza had been a Washington couple since around 2002 where Ms. Riza was a respected figure in the Washington international set. Reportedly born in Tunisia, reared in Saudi Arabia, she eventually gained a British passport as well as a degree from Oxford. She was employed as a communications official at the World Bank.

Paul's special relationship with Shaha was made clear to the bank's ethics committee in order to avoid any infraction of the house rules against even the appearance of nepotism. However, ignoring the small print in other rules, Paul then went ahead and arranged a secondment of his girlfriend to the State Department with a very nice promotion and assorted perks.

This provided the legal device to oust the meddlesome Wolfowitz from the presidency. He fell right into the trap because of his own arrogance and the vigor of his enemies, who saw their own protected fiefdom in danger of disappearing through the reorganization ambitions of the Wolfowitz regime.

Paul Wolfowitz long has had a charmed career, shifting over from the Democrat Party to the Republican with the newly crowned neoconservatives of the eighties. Except for his relatively brief stint as Ambassador to Indonesia, he has never strayed far from the flagpole. It is a tried and true system of advancement in Washington, but this time his own success appears to have brought him down. Sic transit gloria mundi!

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About the Author
George H. Wittman writes a weekly column on international affairs for The American Spectator online. He was the founding chairman of the National Institute for Public Policy.