Wolfowitz on Shaky Ground at the World Bank Controversy swirled around World Bank President Paul Wolfowitz as the organization convened its spring meetings in Washington, D.C. this weekend. A romantic relationship with another employee, and actions to advance her career, has undermined his position as the development institution's leader.
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Wolfowitz on Shaky Ground at the World Bank

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Wolfowitz on Shaky Ground at the World Bank

Wolfowitz on Shaky Ground at the World Bank

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Finance ministers from around the world are here in Washington, D.C. this weekend. They are gathered for the spring meetings of the World Bank and the International Monetary Fund. But allegations of misconduct by World Bank President Paul Wolfowitz are overshadowing the usual discussions about the global economy and world poverty.

Critics say Wolfowitz no longer has the credibility to lead the world's most important development institution.

NPR's Kathleen Schalch reports.

KATHLEEN SCHALCH: Wolfowitz admitted this week that he'd made a mistake by giving a generous raise and promotion to his domestic partner. But the controversy unleashed a torrent of criticisms that had been building within the bank.

Alison Cave is head of the World Bank's Staff Association, which has called upon Mr. Wolfowitz to resign.

Ms. ALISON CAVE (Head, World Bank Staff Association): He has, in our view, irreparably lost the trust and the respect of the staff. Staff are demoralized. Staff are saddened. They feel betrayed in a way.

SCHALCH: She says the allegations of nepotism are especially damaging because Wolfowitz has put fighting corruption and promoting good governance at the top of the bank's agenda.

Ms. CAVE: The message that it sends to the countries that we are trying to work with, in which we are trying to improve their governance, it just basically says, do what I say, but not what I do. And countries may say to us well, you don't even have your own house in order, so why do you expect us to?

SCHALCH: Staff members say they also worried the controversy will threaten another priority that they and Wolfowitz share, helping poor countries, especially in Africa.

Ms. CAVE: We are in negotiation right now for the replenishment of the funds, which are used for the poorest of the poor countries.

SCHALCH: These are low-interest loans?

Ms. CAVE: Yes. They are low-interest loans, which are repayable over a long a period of time.

SCHALCH: Cave says staff are concerned donor countries will lose confidence in Wolfowitz's leadership. As a result, they may not provide enough development assistance. Many governments opposed Wolfowitz's appointment as bank president from the start because of his role in the Iraq war. Former bank Vice President Mark Malloch Brown says it's a pity that Wolfowitz has been hobbled by this.

Mr. MARK MALLOCH BROWN (Former Vice President, World Bank): His credentials of somebody deeply interested in development in the world and our speaker of many languages and intellectual of real richness and depth, all got lost.

SCHALCH: And Brown says dissent among the banks' staff is certainly not new.

Mr. BROWN: There's a tradition that among the happy World Bank staff, they were very unhappy, you know, at my time there, different points under the two previous presidents, James Wolfensohn, and I think by my standards, emerged as a very successful president, and Lou Preston before him.

SCHALCH: But this turmoil is far worse than what previous bank presidents have faced. Critics say it's a symptom of Wolfowitz's relying too much on an inner circle of advisors and too little on bank experts.

Nancy Birdsall, president of the Center for Global Development, says this fits a pattern.

Ms. NANCY BIRDSALL (President, Center for Global Development): He's not getting the best advice. He hasn't set up a system in which he will get the best advice. That's what staff and some board members seemed to be concerned about.

SCHALCH: Birdsall says Wolfowitz should resign. The White House says President Bush still has confidence in Wolfowitz and some African officials attending the meeting have expressed support as well. Now, it's up to the bank's board of directors to decide what to do.

Kathleen Schalch, NPR News.

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