Wolfowitz 'broke World Bank rules'

Paul Wolfowitz's handling of a secondment deal for his girlfriend Shaha Riza broke the World Bank's code of conduct, three staff rules and the terms of his contract as bank president, the final report by a panel investigating his role has concluded.

The report asks the bank's board to consider, in the light of its findings, "whether Mr Wolfowitz will be able to provide the leadership needed to ensure that the bank continues to operate to the fullest extent possible in achieving its mandate".

It suggests that the board should take into account in making this judgment the "damage done to the reputation of the World Bank group and its president, the lack of confidence expressed by internal and external stakeholders in the present leadership, the erosion of operational effectiveness...and the important strategy and governance challenges the World Bank group is facing".

It also asks the board to undertake a review of the bank's governance structures "with the aim of ensuring that it is capable of effectively dealing with the challenges raised for the institution".

The US is expected to try to schedule a conference call of deputy finance ministers from the Group of Seven industrialised nations to address the crisis at the bank on Tuesday, after failing to set up such a call on Monday.

The report concludes that Mr Wolfowitz broke staff rule 3.01 on professional conduct, rule 5.02 on external service and 6.01 on pay.

It states that the initial pay rise, 8 per cent a year, later rises and presumed additional promotion on Ms Riza's return to the bank were excessive and never envisaged by the bank's ethics committee. It said Mr Wolfowitz's attitude evidenced "questionable judgment and a preoccupation with self interest".

Robert Bennett, a lawyer for Mr Wolfowitz, declined to comment on the findings, but said it was "clear that the ad hoc committee has simply ignored the overpowering case we presented that he was acting in good faith".
By Krishna Guha and Eoin Callan
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Taken from http://www.populareconomics.org/globalization/html%20/Glossary.html

World Bank
The World Bank was set up in 1944 as an institution for development assistance. It got started mostly by giving loans for rebuilding Western Europe after World War II, and began giving development loans to poor countries in the1960s. The World Bank is now the world's largest source of development assistance, and most of the money that it lends (75%) is raised in financial markets. Influence in decision-making depends on the contributions of member countries, with industrialized economies accounting for the largest share. It faced a lot of criticism as a result of the structural adjustment programs it imposed as a condition for assistance in the 1980s, as well as for managing big development projects that were completely inappropriate to local conditions. It has since tried to improve its performance by working more closely with developing countries and somewhat distancing itself from the positions of the International Monetary Fund (IMF – go to above link for more info on the IMF). The World Bank is located in Washington, D.C.

*QUESTIONS FOR DISCUSSION
What do you think the consequences for Paul Wolfowitz should be?

Should the World Bank be held to strict guidelines?

The US government has tried to protect Wolfowitz during this scandal. How do you think that the situation affects world opinion of the United States?

*REMEMBER TO BE RESPECTFUL
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