World Bank Jobbery

More evidence the Wolfowitz accusers chose to ignore.

Wall Street Journal
Tuesday, May 15, 2007 12:01 a.m.

The World Bank board meets today to consider the fate of President Paul Wolfowitz, and the truth is that the verdict may already be in. The board will consider the report of an investigating committee dominated by the same European nations that have been orchestrating the media campaign to depose him.

As almost daily newspaper leaks have disclosed for weeks--in violation of bank rules--the committee concludes that Mr. Wolfowitz violated bank rules in awarding a promotion and salary increase for his girlfriend, Shaha Riza. We've previously reported on the World Bank documents that make it clear this was at worst a misunderstanding--if not a setup by bank officials who wanted his fingerprints on any raise for Ms. Riza. Mr. Wolfowitz had tried to recuse himself, only to be told he couldn't do so and would have to be the one to give her the raise and new job. (See "The Wolfowitz Files," April 16.)

But we've now seen two other documents that reveal the investigating committee's clear bias against Mr. Wolfowitz. They concern its key witness, Xavier Coll, the bank's vice president of human resources, who has joined those saying Mr. Wolfowitz dictated a raise he knew was excessive and then tried to cover it up. In his testimony, Mr. Coll claims that "there is no doubt that the President [Mr. Wolfowitz] knew or had been made aware of by me that this was outside the rules." The investigating panel relies heavily on Mr. Coll's claims to support its findings against Mr. Wolfowitz.

But to reach that conclusion, the committee had to ignore a pair of August 2005 memos in which Mr. Coll told a very different story. Mr. Coll dictated those memos for his own files and marked them "Strictly Confidential and Personal--For Xavier Coll's eyes only unless authorized explicitly by Xavier." They are a contemporaneous account of his negotiations with Ms. Riza and Mr. Wolfowitz.


In an August 22 memo, Mr. Coll reports that "I also felt that we were in a very difficult situation--with no precedent at the Bank--and that it had enormous potential to damage the Bank's reputation. In balance, I thought that the situation required more flexibility than in other past cases and that there was great risk to the Bank if we could not come to a workable agreement in a few days." Yet the investigating panel now asserts that the situation wasn't all that unusual and that Mr. Wolfowitz should have been allowed no such "flexibility" in how he tried to settle the matter.

In the same memo, Mr. Coll also reports that he had urged a lump-sum settlement with Ms. Riza as she left the bank, and concedes that Mr. Wolfowitz "agreed that I should raise this alternative with Ms. Riza. . . . I felt comfortable that I raised my points of concern with the President and that he has taken these seriously and given due consideration."

And regarding a later conversation Mr. Coll had with Ms. Riza, Mr. Coll wrote, "I indicated that while the President wanted to come to an agreement quickly (he was leaving that afternoon for an overseas trip) he also wanted to make sure that we came to the right solution, both for the institution and the staff." Mr. Coll added that Ms. Riza rejected his proposed "financial settlement."

Only then did Mr. Wolfowitz decide to settle the matter by dictating its terms to Mr. Coll. After Mr. Coll recommended that any future raises for Ms. Riza should be contingent on a review of her work outside the bank by "a committee of her peers," Mr. Coll wrote that "this addition brought the process for potential promotions more in line with current practice at the Bank. I felt that, on balance, this was a reasonable way to move forward and find a solution given the very complex and difficult set of circumstances."

Based on our fast reading late yesterday of the final investigating committee report, we could not find these quotes from Mr. Coll's memos. Yet they clearly show that Mr. Coll thought at the time that Mr. Wolfowitz was trying his best to come to a fair conclusion that would not harm Ms. Riza, would protect the bank from any possible litigation, and would do well by bank rules.

All of this is further evidence that what Mr. Wolfowitz is facing here is a kangaroo court. The Europeans and bank staff thought they could get him to leave quietly if they smeared him and Ms. Riza enough in the press. But now that he has fought back to clear his name, the Europeans led by Dutch politician Herman Wijffels have decided to ignore evidence to justify their one-sided conclusions. They also largely ignore Ms. Riza's own statements to the committee while condemning her for objecting to a process that all but ended her career at the bank.


So now the full 24-member board will take up the case, even as European ministers try to browbeat the White House and Treasury to get Mr. Wolfowitz to resign as part of some "plea bargain." But what does Mr. Wolfowitz get out of that--except more leaks saying he left under a cloud?

President Bush should understand that none of this is about Mr. Wolfowitz's "ethics." It is all about the European desire to punish a Bush appointee for his support for the Iraq war and his determination to change the bank's policies to fight corruption rather than simply push taxpayer money out the door. If the board really wants to oust Mr. Wolfowitz, the White House should insist on a recorded vote. We wonder if Europeans really want this showdown.

And oh, yes: President Bush could also help by declaring that, if the Europeans do oust Mr. Wolfowitz, his likely choice as a successor would be Paul Volcker, the former Fed Chairman who has made a recent career of fighting corruption. There is certainly a lot of that to clean up at the World Bank.