Paul Wolfowitz at the World Bank: A post-mortem
For Wolfowitz, a 2nd Chance Dissolves Into Failure
By STEVEN R. WEISMAN
WASHINGTON, May 17 — Paul D. Wolfowitz was ready to move on from the Pentagon in early 2005. But he had been thwarted in his effort to become defense secretary or national security adviser. The war in Iraq, meanwhile, had deteriorated. So when the World Bank presidency came open, he jumped at the opportunity.
It offered him a “second chance” to redeem his reputation and realize his ambitions, a friend who has known him for decades says.
Months later, another friend ran into the new bank president and asked how he was enjoying the job. Mr. Wolfowitz unleashed a torrent of bitter complaints about the bank’s bureaucracy, saying it was the worst he had ever seen — worse than the Pentagon.
Now, as friends and critics sort through the wreckage of Mr. Wolfowitz’s career at the World Bank following his resignation as president this evening, they wonder if it was doomed from the outset. Supporters say that he arrived at the bank, a citadel of liberalism, from a four-year stint at the Pentagon, bearing the stigma of Iraq. He was determined to shake up the status quo by rooting out what he saw as corruption and waste and demanding measurable results from the bank’s many aid programs.
“The bank leadership didn’t like Paul challenging their assumptions,” said Robert B. Holland III, a Texas businessman who represented the Bush administration on the bank board until last year. “They have all been there a long time, and they are used to promoting each other’s interests and scratching each other’s back.”
But others think Mr. Wolfowitz, in seeking a second chance after Iraq, repeated the same mistakes he made at the Pentagon of adopting a single-minded position on certain matters, refusing to entertain alternative views and marginalizing dissenters.
“Wolfowitz unsettled people from the outset,” said Manish Bapna, executive director of the Bank Information Center, an independent watchdog group. “His style was seen as an ad hoc subjective approach to punishing enemies and rewarding friends.”
At the Pentagon, Mr. Wolfowitz was an early champion of going to war with Iraq, just a few days after Sept. 11, 2001, and continued his advocacy for regime change in Iraq over the next year. His time at the Pentagon was characterized by infighting, especially with the Central Intelligence Agency, which he thought underestimated Iraq as a threat to the United States. He clashed with Gen. Eric K. Shinseki, the Army chief of staff, and others who warned — correctly, it turned out — that the United States needed more forces in Iraq. His vision of democracy in the Arab world also ran aground in Baghdad.
Despite the administration’s aversion to multilateral institutions, many at the World Bank had initially hoped that Mr. Wolfowitz — a neoconservative intellectual, former academic dean and ambassador to Indonesia — could help forge a new consensus with liberals on ways to more effectively aid poor countries.
But his low-key, intellectual approach to subjects belied a determination to get his way, according to bank officials.
These accounts, coming as Mr. Wolfowitz negotiated the terms of his departure, are from friends and current and former colleagues, both at the Pentagon and the World Bank, who have remained in contact with him.
Once Mr. Wolfowitz leaves the bank, friends say, he may join the legions of former colleagues, from George J. Tenet of the C.I.A. to L. Paul Bremer, the Iraq occupation leader, who have written books and Op-Ed pieces to defend their actions on the war.
Bank officials say, in fact, that when he arrived there in 2005, Mr. Wolfowitz wanted to write a book about Iraq and accept fees for speeches. That set off his first fight with ethics officers, who told him that he could not do so.
When these proposals were rejected, he soured on the office of the general counsel, Roberto Daniño, a former prime minister of Peru and the first official who suggested to him that Shaha Ali Riza, his companion and a bank employee, could not remain at the bank because she would come under his supervision.
Recently released bank documents show that Mr. Wolfowitz rejected Mr. Daniño’s advice on Ms. Riza and went directly to the bank board’s ethics committee in search of a different ruling. He also refused to deal with the general counsel on all other matters. An associate said he called Mr. Daniño “incompetent.”
Mr. Daniño, forced to resign last year, told a reporter at the time: “He presumes that anyone who opposes him is incompetent or corrupt.”
The battle with Mr. Daniño laid the groundwork for battles with Ad Melkert, the head of the bank board’s ethics committee, and Xavier Coll, a vice president for human resources, over the handling of Ms. Riza’s case. The three became Mr. Wolfowitz’s main accusers, asserting that he acted unethically in arranging pay raises, a promotion and a transfer for his companion.
Those disagreements might have faded into irrelevance if Mr. Wolfowitz had not waged other battles with the bank staff, many bank officials say.
At an institution obsessed with process, consensus and respect for its civil servants, Mr. Wolfowitz rankled people by bringing in two close aides from the Bush administration, Robin Cleveland and Kevin Kellems, and used them not only as advisers but as managers who issued directives to senior officers.
Among those with whom he tangled were Christiaan Poortman, a vice president for the Middle East, over Mr. Wolfowitz’s demand that the bank establish a greater presence in Iraq. Mr. Poortman, ordered to transfer to Kazakhstan, resigned instead.
Gobind Nakani, a vice president for Africa, also resigned following disputes with Mr. Wolfowitz over the size of his staff, according to several bank officials.
One official recalled Mr. Wolfowitz dressing down several top employees in the Africa division because they could not tell him whether the incidence of malaria among children had declined as a result of the bank’s program distributing bed nets to families.
Another official who left was Shengman Zhang, the top deputy to James Wolfensohn, Mr. Wolfowitz’s predecessor. Mr. Wolfowitz contended that it was hypocritical for bank officials to allow Mr. Zhang’s wife to work at the bank but to banish Ms. Riza. Mr. Zhang, now a senior vice president at Citigroup in Hong Kong, was furious, several associates say, because bank rules permit husbands and wives to work at the bank under circumscribed conditions, which Mr. Zhang said he followed, but they bar bank employees from having a sexual relationship with top bank officials outside of marriage. “What Paul didn’t understand is that the World Bank presidency is not inherently a powerful job,” a Bush administration official said, speaking anonymously to be more candid. “A bank president is successful only if he can form alliances with the bank’s many fiefdoms. Wolfowitz didn’t ally with those fiefdoms. He alienated them.”
Ms. Cleveland, a former budget official who handled defense matters when Mr. Wolfowitz was deputy defense secretary, sometimes delivered the news on key decisions to suspend aid to countries charged with corruption.
In a dispute with Chad over its use of revenues from a bank-financed oil pipeline, Ms. Cleveland ordered a suspension of money to Chad, according to several officials.
“It produced unpleasant negotiations and made people angry,” said a bank official. “The approach by Mr. Wolfowitz and Ms. Cleveland was one of confrontation. It positioned us as adversaries rather than partners.”
A similar decision to suspend financing for a health program in India last year rankled the British, a partner in the program. It caused the British development minister, Hilary Benn, to retaliate last fall by withdrawing a nominal amount of money for another bank program.
That matter was eventually resolved, but it helped ensure that Mr. Benn and his ally, Gordon Brown, chancellor of the Exchequer and presumed future prime minister of Britain, would not be in Mr. Wolfowitz’s corner in the current fight over his future.
Mr. Wolfowitz’s order to suspend funding for some countries alienated officials in Chad, Kenya, Congo and many other African nations, even though South Africa, Liberia and other African leaders supported his advocacy of honesty in bank activities.
Suspension of aid to Uzbekistan, which Mr. Wolfowitz said was on grounds of corruption, angered some at the bank who asserted that the real motivation was that country’s decision to suspend air rights for United States military operations in Afghanistan.
The battle over corruption came to a head last fall in Singapore, when a majority of the bank board demanded changes in the program, insisting that no suspensions of aid occur without consulting them.
They also blocked Mr. Wolfowitz from providing money to dissident groups over the objections of a country’s leaders, fearing that he was trying to duplicate the Bush administration’s support for dissidents who waged uprisings that led to the “rose revolution” in Georgia and the “orange revolution” in Ukraine.
In his final appeal to the bank board to save his job, Mr. Wolfowitz promised to change his management style. Mr. Kellems had quit, and Ms. Cleveland had moved out of her office next to Mr. Wolfowitz’s. His statement was filled with such phrases as “I relied much too long on advisers who came in with me from the outside;” “I now have a team of vice presidents and I am very comfortable empowering them and delegating to them,” he said, adding, “I am aware of the concern that I need to place more trust in the staff.”
Mr. Wolfowitz also said he hoped to continue pressing for programs to stop corruption, combat AIDS in Africa and avian flu in Asia, achieve new records of funding for the world’s poorest countries and do more to combat global warming.
In the end, however, his supporters said his willingness to resign came not because he had violated bank rules over the handling of his companion’s compensation, but because his leadership style had impeded progress on these issues. Whether or not the denouement was inevitable, Mr. Wolfowitz and his supporters came to see it more as the result of the war within the bank than the one in Iraq.
