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Muttering at the World Bank
Wolfowitz's Appointment of Loyalists Disturbs Some Staffers

By Paul Blustein
Washington Post Staff Writer
Wednesday, February 8, 2006

At the World Bank, they are sometimes referred to as "the entourage," "the palace guard," or "the circle of trust," because of their close relationship with bank President Paul D. Wolfowitz. They are Americans with ties to the Bush administration, and the immense clout they wield has sparked a furor in the ranks of the giant development leader.

Their roles have rekindled fears among the staff that Wolfowitz, the former U.S. deputy defense secretary, is bent on imposing a conservative agenda on the bank. Wolfowitz has repeatedly sought to dispel such concerns since he became bank president in June. He has pledged his commitment to the bank's mission of alleviating poverty, and his unassuming manner has charmed many staffers who were averse to his role as a chief strategist of the U.S.-Iraq war.

But after months of seeming tranquillity, the bank is stewing with discontent over Wolfowitz's choice of several confidantes with administration or Republican connections to serve in key bank posts. The most influential is Robin Cleveland, who worked closely with Wolfowitz when she was a senior official at the Office of Management and Budget and is now his top adviser. Two others are Kevin S. Kellems, a former spokesman for Vice President Cheney who last month became the bank's chief communications strategist; and Suzanne Rich Folsom, a former Republican activist named last month to head the Department of Institutional Integrity, the bank's internal watchdog unit. Kellems also holds the title of senior adviser to the president, and Folsom has the title of counselor to the president.

With little development experience, one or more members of that trio advise Wolfowitz on many of his major decisions and act as his conduits to other bank officials. The arrangement, bank veterans said, is unprecedented at the 184-nation institution, which has a multinational staff of 10,000 and lends about $20 billion a year to developing countries for projects ranging from roads and medical clinics to the creation of financial systems.

Top bank officials, who spoke on the condition of anonymity for fear of offending the new team, said a sense of powerlessness prevails in the bank's upper echelon because of the requirements for important matters to go through the Wolfowitz coterie. Several high-ranking officials have left -- notably Shengman Zhang, the bank's former No. 2, and Roberto Daniño, the general counsel, both of whom told colleagues that they felt cut out of decision-making.

Further fueling the disquiet was the disclosure last week that Ana Palacio, who was foreign minister of Spain when that nation sent troops to Iraq, has received a short-term contract as a bank consultant -- perhaps positioning her for a permanent job.

In an interview, Wolfowitz said the anxiety was understandable, but he scoffed at suggestions that his lieutenants are distancing him from longtime bank staffers. "I can't be 'surrounded' by two-and-a-half people," he said, noting that he has appointed several non-Americans to important posts -- Graeme Wheeler, a New Zealander, as acting managing director; Letitia A. Obeng, a Ghanaian, as his office director; Lars H. Thunell, a Swede, as head of the bank's private-sector investment arm; and Vincenzo La Via, an Italian, as chief financial officer.

"I really like hearing different points of view," Wolfowitz said. "I like to encourage people to disagree with me." With a grin, he added that he has told staffers that they should withhold opposing views only when they are meeting with an official from some foreign government, "and you're agreeing with him, not me."

Kellems observed that Wolfowitz has made extensive efforts to hear from staffers -- including holding "town hall" meetings to answer questions and eating lunch in the cafeteria, where he sits with strangers to ask them what is on their minds.

"He also gave out his personal e-mail address" to a large number of staffers, Kellems said. "The offer was, 'I don't care what rank you are, if you have a concern, or idea, whatever it is, send it to me. I pledge to read it. I do not pledge to answer them all. But I promise you, if you want the contents to remain anonymous, it will.' Then he sometimes sends them to us -- if he wants it acted on, he'll strip off who it is from, and say, 'What do you think of this?' or, 'This looks like it might be a real problem.' "

Although the World Bank president is by tradition a U.S. citizen, no previous president has filled his office with Americans, much less a group of politically kindred spirits, according to bank staffers who have worked there since it was run in the 1970s by former defense secretary Robert S. McNamara. Common as such a staffing approach may be at, say, a U.S. Cabinet agency, it goes down poorly among the bank's international civil servants.

Part of the problem, bank staffers acknowledged, is that many of them don't care for Republican policies. (The party affiliations of Wolfowitz's U.S. aides are not so clear-cut; both Cleveland and Kellems once worked for Democratic senators -- Cleveland for Birch Bayh of Indiana and Kellems for John Glenn of Ohio.)

The political antipathy is evident in the relish with which many staffers call attention to Cleveland's role in a scandal involving Pentagon contracts for aircraft leases. In that case, e-mails showed that Cleveland -- who was overseeing the Defense Department budget at the OMB -- sought help from Air Force Secretary James G. Roche in securing a job for her brother with a defense contractor at the same time as Roche was seeking Cleveland's support for an air-tanker lease deal. Asked for comment, Cleveland said: "The U.S. attorney's office looked into the matter and notified me that there was no basis for any further action."

Wheeler, the acting managing director, sought to soothe the staff in an interview posted on the bank's internal Web site. "It's natural for the President to want to have around him some people who he has worked with in the past and who can help him settle into the new organization," Wheeler said.

The staff gave his comments a thumbs down, as measured by their use of a system allowing them to rate the comments with one star ("not very informative"), two stars ("somewhat informative") and three stars ("very informative"). More than 1,100 of them had responded yesterday with an average rating between one and two stars, a far larger number of respondents and lower rating than is usual for the Web site.

Some of the sharpest criticism has targeted Folsom's appointment to run the Department of Institutional Integrity. A staffer at the Republican National Committee in the 1980s who also worked in the 1989 inauguration of President George H.W. Bush, Folsom went to work for a major law firm in the 1990s, specializing in ethics law. She came to the bank in 2003 as a counselor to Wolfowitz's predecessor, James D. Wolfensohn, who assigned her to help manage the bank's relations with the administration and Congress. Her star has shone brightly under Wolfowitz, who named her acting director of the watchdog unit in October and made the appointment permanent on Jan. 17.

Folsom's detractors note that she had little experience as an investigator. The bank's staff association circulated a letter citing widespread "dismay" over her appointment as well as Kellems's. The letter expressed concern that the bank needs to set a pristine example in its hiring practices, for developing countries that are trying to avoid cronyism.

In an interview, Folsom disputed suggestions that politics played a role in her appointment. "I haven't had a political job since my 20s. I'm in my 40s now," she said, adding that the main reason for her selection by Wolfowitz was his belief that as acting director she invigorated a once-lethargic department with a long backlog of investigations. "Talk to people" in the department, she said. "They're energized."

They are, judging by conversations with staffers who spoke on the condition they would not be identified. "I've been pleasantly surprised," one said. "Things are no longer languishing. We now have street cred within the institution. . . . They're starting to put some teeth in the anti-corruption-speak."

Kellems, who attracted notice in the movie "Fahrenheit 9/11" as the Wolfowitz aide who helped comb the deputy defense secretary's hair, shrugged off concern over the personnel moves. "Anytime there's a transition to a new leader, especially one at a public institution, it's only human nature that that will bring with it varying levels of unease," he said. "There's been far less of that unease to date than many of us expected."

But there is no ignoring the hullabaloo. "At one meeting, someone stood up and said that they heard the reason I got this job was because my son worked for Wolfowitz at the Pentagon," Folsom said. "My son is 9. If he worked at the Pentagon, I want the back pay."

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