How will the Wolf survive?

Posted by Justin Fox Friday, April 13, 2007 at 9:36 am

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This Paul Wolfowitz World Bank scandal, while it's lots of fun to rant about and has just reminded me of a great Los Lobos album that I used to own in vinyl, is starting to nag at me a little.

Thing is, Wolfowitz faced a really difficult choice when President Bush foisted him upon the World Bank. The love of his life, or at least the love of this particular phase of his life, one Shaha Riza, already had a good job there, as acting head of external affairs for the bank's Middle East and North Africa region.

According to the statement released early today by the World Bank's executive directors, Wolfowitz asked the bank's ethics committee what he should do about Riza, and was told she "should be re-located to a position beyond potential supervising influence by the President or assigned to external service and compensated for the potential disruption to her career by an in situ promotion as consistent with the practice of the Bank."

After that is where things went wrong. To quote Paul Lukasiak's excellent translation of World Bank gobbledygook from the comments to a previous post on this:

Wolfie then became personally involved in setting up his friend's new job -- and telling our Personnel Office to implement the deal he'd made without regard to standard employment protocols and procedures.

The deal involved moving Riza to the State Department but having the World Bank pay her salary, which was bumped up from $133,000 to almost $194,000, tax free. In his apology Thursday, Wolfowitz said that he had been "trying to navigate in uncharted waters" to resolve a "painful personal dilemma." Which makes it sound like Riza was really pushing for that raise, doesn't it?

This presented Wolfowitz with not just a painful personal dilemma but a painful workplace dilemma. And since Time's Official Workplace Dilemma Expert is gamboling about in Japan at the moment, I'm going to take it upon myself to offer three alternate approaches Wolfowitz could have followed that would have kept him out of trouble.

1) Shaha, honey, I know you deserve some sort of compensation for having your career sidetracked by mine, but it would be political dynamite if I arranged any kind of raise for you. So why don't you go work at the State Department and bide your time for a couple of years, and in the meantime I'll always pay for dinner.

2) Shaha, honey, I know your career is important, too. But this is a once in a lifetime opportunity for me. I really do want to help the world's poor, and there's no way any future U.S. president will pull the strings to get me this job. I've got to seize the opportunity. Besides, it's kind of amusing to have a Wolfowitz succeed a Wolfensohn, no? Anyway, there's no way for you to hold on to your job that won't spell political trouble for me. So you're just going to have to quit the bank and find other work. I hear the Carlyle Group is hiring.

3) Shaha, honey, you're right: This job is more important to you than being World Bank president is for me. Besides, the Iraq war has made me so unpopular around the world that I'll never be able to accomplish much at the bank. I'll be opposed at every turn no matter how good my ideas are. A lower-profile bank president could have a much bigger impact. So you keep your job, and I'll go find something else to do. I hear the Carlyle Group is hiring.

Painful choices, sure. But all better than the one Wolfowitz actually made.

Update: The corruption-fighters on the W$J editorial page weighed in on the Wolfowitz case this morning. Inexplicably they picked some lame thing about North Korea as their free editorial of the day instead, so it's for subscribers only. But here's a choice excerpt:

The forces of the World Bank status quo are now making their power play, demanding that the bank's board ask him to resign over an ethics flap involving his girlfriend. The dispute is so trivial that it betrays that this fracas has little to do with Mr. Wolfowitz's ethics. The real fight here is over his attempt to make the bank and its borrowers more accountable for results, especially by exposing and punishing corruption.

Now it is sweet to see somebody defend poor Wolfie while the rest of us pile on, but first of all, what kind of dough do those editorial writers at the WSJ make that a $60,000 tax-free raise -- apparently arranged outside official channels, with more to come -- seems trivial? And if it was so obvious from the time of ~~Wolfensohn's~~ Wolfowitz's appointment that "the bureaucratic interests at the bank and in the global 'development' industry" would try to oust him, as the Journalistas write, then why did President Bush get him the job? Why not give it to somebody equally committed to "exposing and punishing corruption" who didn't come with all the baggage that ~~Wolfensohn~~ Wolfowitz did?

Update 2: Sebastian Mallaby, who wrote the book on the World Bank, has a smart column on the Wolftroversy today, in which he emphasizes that it's not just about Riza:

The scandal centers on the pay of people around Paul Wolfowitz, the World Bank president. Kevin Kellems, an unremarkable press-officer-cum-aide who had previously worked for Wolfowitz at the Pentagon, pulls down $240,000 tax-free -- the low end of the salary scale for World Bank vice presidents, who typically have PhDs and 25 years of development experience. Robin Cleveland, who also parachuted in with Wolfowitz, gets $250,000 and a free pass from the IRS, far more than her rank justifies. Kellems and Cleveland have contracts that don't expire when Wolfowitz's term is up. They have been granted quasi-tenure.

Which brings us to the really important question here: How can I get a job at the World Bank?

Update 3: Time Washington bigfoot Michael Duffy weighs in here.

Update 4: A very cursory reading of the big document dump made this morning by the World Bank (a link to the pdf can be found at the bottom of this page) indicates that Wolfowitz really didn't want to be involved in reassigning Riza. He asked the then-chairman of the World Bank Ethics Committee, Dutch politico Ad Melkert, to handle it. But Melkert told Wolfowitz the Ethics Committee didn't do stuff like that, and that Wolfowitz and the head of HR had to take care of it. They certainly didn't make it easy on the guy.

Update 5: All the stuff Anonymous Coward says in the comments, plus this unnerving Sebastian Mallaby retrospective from Brad DeLong. As a journalist who has gotten things seriously wrong on occasion in the past, I'm of course deeply opposed to what Brad's doing. But as a blogger who has previously written that Mallaby is full o' baloney, maybe I'm not so opposed.