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Wolfowitz Case May Unsettle World Bank Routine

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Wolfowitz Case May Unsettle World Bank Routine

Business

Wolfowitz Case May Unsettle World Bank Routine

Wolfowitz Case May Unsettle World Bank Routine

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The World Bank committee investigating the bank's president, Paul Wolfowitz, is preparing its final report on whether Wolfowitz broke bank rules in arranging a pay raise for his girlfriend at the bank. But the way the agency operates will likely be changed whether Wolfowitz stays or leaves.

On Monday, the committee's final report will go to the bank's executive board, which will then decide whether to ask for Wolfowitz's resignation, issue a reprimand, or allow him to stay.

The question that prompted the controversy was whether Wolfowitz violated conflict-of-interest rules when he personally arranged a pay raise for his girlfriend. Wolfowitz says he thought he had the approval of the Bank's ethics committee to do what he did. His critics say he went beyond the committee's guidance.

The verdict of the Bank executive board will come next week, unless Wolfowitz resigns before a vote is taken.

If his largely European critics prevail, Wolfowitz will be gone. If the Bush administration, which still supports Wolfowitz, prevails, he'll stay.

Either way, the Bank may never be the same.

Until now, the United States has had the right to choose the bank's president, while the Europeans have traditionally chosen the head of the International Monetary Fund. Colin Bradford, a development expert at the Brookings Institution, predicts that custom will now change.

"A very good outcome of this is if the Europeans and Americans decide together to each give up their prerogatives to name the directors of the two institutions," Bradford says, "and agree to a merit-based process. That would be excellent."

European governments are seen as more keen for the change than the United States. If they allow Wolfowitz to keep his job, he may well be the last bank president chosen by the United States.

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