World-Class Mess

Wednesday, May 16, 2007

THE SEVEN executive directors of the World Bank who this week submitted their second report on bank President Paul D. Wolfowitz managed to leave both Mr. Wolfowitz and themselves looking worse than when the process began.

Start with Mr. Wolfowitz and the way he handled salary increases for his companion Shaha Riza, an employee of the bank. We already knew that Mr. Wolfowitz showed poor judgment in playing any role in shaping Ms. Riza's job conditions when he joined the bank in the summer of 2005. What the report makes clear is that Mr. Wolfowitz's role didn't just look bad; it was bad.

The bank's ethics committee, which Mr. Wolfowitz had consulted, had recommended that Ms. Riza receive a raise. But the maximum annual increase that bank rules contemplated was $20,146.80, according to the report. Mr. Wolfowitz instead approved an increase of $47,340, to a salary of $180,000. In so doing, he implicitly accepted Ms. Riza's contention that she had been unfairly denied raises in the past, a contention he was in no position to rule on. Mr. Wolfowitz also showed inexcusably poor judgment in agreeing to future raises for Ms. Riza and in narrowing the circle of bank officials who were consulted in arranging her promotion.

At the same time, the report refuses to face up to the bank's role in this mess or to acknowledge any mitigating circumstances. Yes, the directors admit, Mr. Wolfowitz was the one who surfaced the potential conflict of interest; yes, the ethics committee told him that the bank's vice president for human resources "should act upon your instruction" in settling the matter. And, yes, the ethics committee twice approved what Mr. Wolfowitz had done -- and at least on the second occasion had access to all the details of Ms. Riza's salary package. Ethics committee chairman Ad Melkert -- whose main goal throughout seems to have been to duck any responsibility for anything -- at that time advised Mr. Wolfowitz that "on the basis of a careful review" the committee had no objection to make.

Yet the most the directors can muster is that the committee's advice "was not a model of clarity" and that "there is a need to review the role as well as procedural and other aspects of the Ethics Committee." Astonishingly, they go on to rebuke Mr. Wolfowitz for turning the controversy "into an ugly public relations campaign" -- this after bank officials have leaked one accusation after another against him and refused to allow Ms. Riza to publish an op-ed in her own defense.

Mr. Wolfowitz did not behave corruptly, but he exercised exceedingly poor judgment. Bank officials did not behave corruptly, but they have behaved cravenly from beginning to end. It's enough to make you want to wash your hands of the whole thing. But the bank still matters as an institution that helps the world's poor. Bush administration officials so far have fought for Mr. Wolfowitz to keep his job. That's no longer in the bank's best interest.

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