End Evil

World Bank Corruption

Yet another of Bush´s buddies is caught up in a scandal. World Bank President Paul Wolfowitz has publicly apologized for "mistakenly" arranging a huge pay rise along with a series of guaranteed promotions and pay rises for his girlfriend.

Wolfowitz was already in a relationship with Shaha Riza (an employee of the World Bank) when he was appointed as president of the World Bank. The Bank has a rule that staff should not have romantic involvements, and so she was seconded to the U.S. State Department. However, thanks to leaks from staff we now know that this move was accompanied by a pay rise of $40,000 (making her pay a whopping $193,000 before tax - but she doesn´t actually have to pay any tax) and a series of guaranteed promotions. The pay rise actually made her better paid than her boss, Secretary of State Condoleezza Rice!

The World Bank Staff Association (which represents over half of the Bank´s employees) called for his resignation with the chairperson stating that Wolfowitz "must acknowledge that his conduct has compromised the integrity and effectiveness of the World Bank Group and has destroyed the staff´s trust in his leadership. He must act honourably and resign."

In response, Wolfowitz has claimed that he is the victim of a smear campaign, and that any criticism of him was "unjust and hypocritical". Wolfowitz claimed that he had received approval by the proper authorities within the bank for the substantial pay rise. Unfortunately for him, senior Bank officials do not seem to agree with his version of events. Ad Melkert (chairperson of the bank's ethics committee at the time) reported that "It was entirely Mr Wolfowitz´s decision to do exactly what he originally proposed not to do: to engage directly in personnel matters regarding his partner.... including the large initial pay increase, the stipulation for subsequent annual increases, the stipulation for subsequent promotions". He also denied that the ethics committee had even authorized the extraordinarily generous deal.


Of course, the truly funny (and sad) aspect of all of this is that Wolfowitz has been at the fore-front of the Bank´s anti-corruption campaign.

There is, unsurprisingly, plenty of evidence that his crusade against corruption has a political side to it. He suspended an aid program in Uzbekistan just after that country refused to allow US military aircraft to land within its borders. Countries who support the US in their "war on terror" seem to do rather well out of the World Bank, while others who are not so politically useful (such as the African nations) have found that their aid has been withdrawn because of allegations of corruption. Furthermore, the bank´s policies have already been changed to fit in with the neo-conservative ideals of the Bush Administration. For example, One of Bush´s other buddies who was appointed by Wolfowitz (Daboub) has already scupered aid programs which would have provided family planning and birth control to poorer nations. Daboub ordered that all references to family planning (which he as a devout catholic considers to be sinful) be deleted from the Bank´s long term health program. Thus under his management the World Bank has become little more than an economic outlet of the US Government.

On the positive side, Wolfowitz has argued that the US needs to increase aid payments to Africa and has pointed out that trade restrictions applied by the US Government are partly responsible for the situation. However, he has also stated that an increase in aid should be linked to "performance" and "anti-corruption" measures. We can assume, therefore, that in his view Ms Riza´ "performance" has warranted a 25% pay rise (and a guarantee of future pay rises and promotions) and that corruption is perfectly acceptable, as long as he and his buddies are the ones to profit from it.

Posted 4th May 2007

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