News Round Up, May 16, 2007
WSJ- Wolfowitz's Support Diminishes --- White House Wavers As World Bank President Continues to Fight for Job
NYT- Bush Opens Door to Wolfowitz's Resigning Voluntarily
Washington Post- White House Support for Wolfowitz Wavers
Washington Post, Editorial- World-Class Mess; No one's looking good at the World Bank.
Financial Times- Wolfowitz in final plea to keep job
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The Wall Street Journal
Wolfowitz's Support Diminishes --- The White House Wavers As World Bank President Continues to Fight for Job
Greg Hitt and Neil King Jr.
16 May 2007
WASHINGTON -- The White House, in a major shift, signaled it would consider a change in leadership at the World Bank, even as the institution's besieged president, Paul Wolfowitz, made a personal appeal to the bank's board to save his job.
Until now, the White House had voiced unwavering support for Mr. Wolfowitz, a former top Defense Department official and ally of Vice President Dick Cheney. But U.S. officials yesterday suggested Mr. Wolfowitz's ability to lead the institution may be fading.
A White House official said the U.S. is prepared to engage in an "open discussion" with major players in the World Bank about whether he should continue in his job. The U.S. is willing to consider "all options," including Mr. Wolfowitz's resignation, as part of "a resolution of the question of what is best for the future of the institution," the official said.
The official added, however, that the White House wants this discussion to be separated from the immediate controversy that has brought Mr. Wolfowitz to this point: his involvement in granting a generous compensation package to his girlfriend and longtime bank employee Shaha Riza. Treasury Secretary Henry Paulson and other senior Bush administration officials contend those allegations don't justify firing Mr. Wolfowitz and should be treated separately from other questions raised about his leadership since taking the post in June 2005.
The White House overture could provide Mr. Wolfowitz with a face-saving way to bow out of the institution, allowing him to avoid being formally dismissed by the bank's board. Down the road, it could also ensure the White House retains its influence in picking a successor, since the U.S. would be seen as opening the door for Mr. Wolfowitz's departure.
White House spokesman Tony Snow suggested the larger question of "what is going to be best for the institution" should be dealt with outside the issue of Mr. Wolfowitz's handling of Ms. Riza's compensation package. He said the U.S., the bank's largest shareholder, is ready to have a full debate about the future of the institution. "All options are on the table."
The White House's evolving position suggests support is eroding for Mr. Wolfowitz, making the possibility of his stepping down more likely. For his part, though, he is fighting to stay in his job. He vowed last night in his appearance before the bank's 24-member board to "regain the trust" of the institution, if he somehow survives.
Among other things, Mr. Wolfowitz pledged to overhaul his front office, relying much less on a cadre of close advisers with ties to the Bush political establishment. Critics complain top Wolfowitz aides, especially Robin Cleveland, a former Bush White House official, have had free rein to intervene in bank policy making. Going forward, Mr. Wolfowitz said there will be "a clear separation" between his advisers and bank managers.
Mr. Wolfowitz offered the changes as a part of a concession that the current crisis is about more than his actions on behalf of Ms. Riza. "If you want to have a discussion about my leadership, my management style, and the policies I support, let's do it," he said, according to a written copy of his remarks. "That's fair. That's legitimate. But let's get past this conflict of interest matter."
That may be difficult to do, however.
A report prepared by a board subcommittee found Mr. Wolfowitz violated the bank's ethics rules when he dictated the terms of pay for Ms. Riza. The report contends controversy over Mr. Wolfowitz's actions has undermined the bank's credibility, creating a "crisis of leadership." It urges debate on whether he should continue as the bank's top official. The board opened debate last night, and had cleared its schedule for today to stay focused on the matter.
Mr. Wolfowitz insists he acted in good faith in his handling of the Riza case. After becoming bank president, he disclosed the relationship and proposed to recuse himself from personnel decisions involving Ms. Riza. He got involved in details of her compensation package, he said, only after being instructed to do so by board ethics officials.
In recent days, senior Bush officials, led by Mr. Paulson, have urged the board to separate questions about Mr. Wolfowitz's handling of the Riza case from questions about his future at the bank. The U.S. overtures were largely rejected yesterday by key countries within the European Union, diplomats in Washington said. "There is a desire in Europe to get on with the business of the bank and to resolve this issue quickly," one European official said.
The European Union issued its own statement on the matter yesterday at the end of a meeting of EU development ministers in Brussels. Speaking on behalf of the group, Germany's development minister, Heidemarie Wieczorek-Zeul, urged the World Bank board to come to a "rapid decision" that would allow "the integrity and the credibility of the bank to be maintained and reinstated."
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