Criticism Builds Against World Bank's Wolfowitz Paul Wolfowitz is still president of the World Bank, despite calls for his resignation, but a special World Bank panel has found he violated ethics rules. Wolfowitz got in trouble after arranging a pay package for his girlfriend.
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Criticism Builds Against World Bank's Wolfowitz

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Criticism Builds Against World Bank's Wolfowitz

Criticism Builds Against World Bank's Wolfowitz

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Paul Wolfowitz is president of the World Bank today, just as he was yesterday, and just as he was several weeks back, when he first got into trouble for arranging a pay package for his female companion and colleague. A special World Bank panel has ruled that Wolfowitz has violated ethics rules. Europeans are calling for his resignation and are worried about how the scandal may hurt the reputation of the World Bank.

Peter Goodman has the story in today's Washington Post. Welcome, Peter.

Mr. PETER GOODMAN (Reporter, The Washington Post): Thanks very much.

COHEN: Peter, how is all of this turmoil affecting the billions of dollars worth of donations that the World Bank really needs to do its job?

Mr. GOODMAN: Well, there's a lot of worry about that. The bank, right now, is campaigning to replenish the International Development Assistance Fund - which the fund stock now worth about $10 billion. It gives more than half of that money to Africa. And the World Bank has put a focus on assistance for Africa, unlike a lot of other development aid institutions. And the fear is that so long as Wolfowitz is kind of the primary cheerleader for replenishing the fund, Europeans in particular, will hold on to their money, they'll funnel it elsewhere, they'll funnel it particularly through European institutions that tend not to put such a focus on Africa and the world's poorest countries.

COHEN: How would this timeout - I mean, I'm sure that this isn't going to be immediately effecting the bank - when might we see some of the implications of all these kind of coming into fruition?

Mr. GOODMAN: I mean, we're talking about decisions that have to be made in the next few months. Wolfowitz has targeted raising $20 billion by early next year. So this is playing out right now.

COHEN: And can you describe some of the projects that this money actually goes to?

Mr. GOODMAN: We're talking about a range of public health projects: clean water, drilling, child immunization, in some cases, family planning, education projects. In - and again, some of the poorest countries in world in sub-Saharan Africa.

COHEN: There are a number of different options on the table right now in terms of have best to deal with Wolfowitz. You know, they're calling about possible, you know, asking for his resignation; reprimands; that maybe no action whatsoever... What specifically are some of the members of the World Bank from other countries asking for? What would be their first choice?

Mr. GOODMAN: Well, this is the murkiest part of the story, because Wolfowitz's fate now rests in the hands of this 24-member executive board. And the members of this board - so far, their strategy seems to have been to leak documents, to turn up the pressure, to essentially make life very uncomfortable for Paul Wolfowitz at the World Bank in the hopes that he'll go. And that strategy hasn't worked, because he's still there. Now, the executive directors take authorization from the capitals of the countries they represent. So ultimately, this is a political decision - his future - that rests in the hands of governments from Germany, France, the U.K., and really around the world.

The problem is that this board operates by consensus, traditionally. It doesn't vote. This is not Congress. There's no House majority whip to go count noses, and nobody really knows what will happen if there's a vote. So all of that argues for some kind of negotiated outcome.

COHEN: In the midst of this investigation, I can't imagine that Paul Wolfowitz is getting much of his day-to-day job done. How is all of this affecting the, you know, daily operations of the bank?

Mr. GOODMAN: It's paralysis inside the bank. I mean, staffers are spending most of their times, as I understand it, phoning one another, instant messaging one another, posting to blogs that are following this story in great detail. There are a lot of petitions circulating, calling for his resignation. And really, there's just uncertainty over who's heading this institution, which makes it very difficult to pursue strategies and pursue funding.

COHEN: Peter Goodman of The Washington Post, thanks so much.

Mr. GOODMAN: Thanks very much.

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