Wolfowitz Feels the Heat at the World Bank The spring meetings of the World Bank and the International Monetary Fund this weekend in Washington could not come at a more critical time for Bank President Paul Wolfowitz. After two years on the job, he faces challenges on many fronts.

Wolfowitz Feels the Heat at the World Bank

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The World Bank and the International Monetary Fund hold their spring meetings this weekend here in Washington. And for the World Bank President Paul Wolfowitz the meetings come at a critical time. Some governments say he has gone too far with his anti-corruption campaign. World Bank staff members complain that he doesn't listen. And now Wolfowitz is facing criticism over pay raises given to a female friend.

NPR's Tom Gjelten has the second of his reports on Wolfowitz's first two years at the Bank.

TOM GJELTEN: Paul Wolfowitz arrived at the World Bank after four years as deputy defense secretary. His reputation as an architect of the unpopular Iraq war preceded him and burdened him. The U.S. representative on the Bank's board of directors, Robert Holland, decided he'd better arrange a series of get-acquainted sessions where other board members could meet Wolfowitz and get a sense of his thinking.

Mr. ROBERT HOLLAND (Former Member, Board of Directors, the World Bank): I had no doubt that because of his identification with the administration's Iraq policy that it was going to be a challenge.

GJELTEN: And it was. But Wolfowitz's association with the Iraq war was only part of the reason for his rocky start. He quickly challenged the status quo, saying the Bank was not taking a hard enough line in dealing with corruption in developing countries. In his first few months, Wolfowitz moved almost unilaterally to suspend some high-profile Bank projects. Some governments complained to Joseph Stiglitz, the chief Bank economist under Wolfowitz's predecessor, saying Wolfowitz was treating them unfairly.

Mr. JOSEPH STIGLITZ (Former World Bank Official): Accusations were brought about corruption in one particular country, and when that country said we want to see the evidence, we want to prosecute it if there is a problem, that evidence was not forthcoming. So the country was not able to defend itself against the charges, and it wanted to make sure that it was doing the right things.

GJELTEN: Stiglitz would not identify the country, but other former World Bank officials say the circumstances fit what happened in India. Wolfowitz and his senior management team suspended a huge health program there in response to allegations of corruption in the contracting process. An investigation had concluded that the Bank staff and the Indian government were taking corrective actions, so the program's suspension came as a surprise to the World Bank country director, Michael Carter, who retired shortly thereafter.

Mr. MICHAEL CARTER (Former World Bank Official): There was no consultation.

GJELTEN: There was no consultation?

Mr. CARTER: No. The internal communications were not really aimed at bringing in everybody who had something to contribute.

GJELTEN: Wolfowitz also raised eyebrows with his decision to withdraw a plan to provide assistance to the government of Uzbekistan. That action came shortly after Uzbekistan announced it would no longer grant the U.S. military access to one of its airfields. Rumors circulated that Wolfowitz suspended the aid program in retaliation. At a press conference here yesterday, Wolfowitz insisted the Uzbekistan action had a different explanation.

Mr. PAUL WOLFOWITZ (President, World Bank): Given the substantial human rights violations that were taking place prior to that decision, we had real concerns about whether we could get transparency about where our money was going.

GJELTEN: Once again, however, Wolfowitz had acted without consulting career Bank staff. Dennis de Tray was the senior Bank official responsible for Uzbekistan when Wolfowitz cancelled the country plan.

Mr. DENNIS DE TRAY (Former World Bank Official): I accept the fact that Paul Wolfowitz is president of the Bank and has a right to do that. But that he didn't discuss it with those of us who were knowledgeable, who had spent many months working on that strategy, who were fully aware of the sensitivities of it, struck me as creating an unnecessary chasm between that decision and the staff.

GJELTEN: De Tray, who has since left the Bank, says former colleagues there are discouraged and wondering whether they should leave.

Mr. DE TRAY: People don't fully understand where Paul wants to take the Bank. They find it demoralizing that he seems uninterested in the career professionals at the Bank.

GJELTEN: An internal World Bank blog where staff members can post messages anonymously is now full of critical comments about Wolfowitz. One complaint is that he shields himself from the career staff, relying excessively on two advisers he brought with him to the Bank, Robin Cleveland and Kevin Kellems. At the press conference yesterday, Wolfowitz acknowledged the criticism he's gotten for depending so much on those two people.

Mr. WOLFOWITZ: I've heard concerns from board members, from staff members, that that's fine in the beginning, but the role of my two advisers needs to be more structured. And I actually agree with that, and I'm going to find a way to put them in the structure better.

GJELTEN: In fact, Wolfowitz does still have supporters inside and outside the Bank, and the more staff members complain about his management, the more some of his supporters applaud.

Mr. HOLLAND: He's probably doing a lot of the right things.

GJELTEN: Robert Holland, the former U.S. representative on the World Bank's board of directors, says it's a good sign Bank staffers are upset with Wolfowitz, because the institution needed to be shaken up. Told that one survey showed that 90 percent of Bank staffers were opposed to Paul Wolfowitz's appointment, Holland said he's not surprised.

Mr. HOLLAND: There was a political bias against him, and a defense of the culture and the status quo that's largely responsible for that number.

GJELTEN: Some Bank staff members critical of Wolfowitz's management style do credit him for some achievements. He has promoted Bank action to halt global warming, going far beyond positions taken by his former Bush administration colleagues. He has pushed hard for increased aid for Africa. On a trip there last month, Wolfowitz even criticized his own U.S. government for not being more generous. As he prepares for the World Bank and IMF spring meetings this weekend, however, Paul Wolfowitz still finds himself beleaguered. He's now dealing with revelations that his female friend, a Bank employee, received big pay raises after he arrived at the Bank. At his press conference yesterday, Wolfowitz apologized for his handling of the matter.

Mr. WOLFOWITZ: I wish I had trusted my original instincts, and kept myself out of the negotiations. I made a mistake, for which I am sorry.

GJELTEN: The World Bank board today is meeting to review Wolfowitz's involvement in the arrangement of those raises, and to determine how to respond. Having criticized the governance practices of so many countries over the past two years, Wolfowitz may now have to answer for his own governance record at the Bank. His alleged failure to consult more with professional staff, his reliance on a small coterie of advisers, and now his apparent involvement in decisions about his friend's salary.

Bea Edwards is the international policy director at the non-profit Government Accountability Project in Washington.

Ms. BEA EDWARDS (International Policy Director, Government Accountability Project): As an international organization, the World Bank and its president, its senior staff, cannot go around the world lecturing governments about corruption, malfeasance, nepotism, cronyism, favoritism, and at the same time manifest those same practices at the Bank itself.

GJELTEN: The World Bank Staff Association, representing Bank employees, met yesterday here in Washington. The Association chair afterward released a statement saying that Wolfowitz's conduct, quote, "has compromised the integrity and effectiveness of the World Bank group, and has destroyed the staff's trust in his leadership. He must act honorably and resign," the statement said.

Tom Gjelten, NPR News.

INSKEEP: You can read the staff association statement and Paul Wolfowitz's apology at npr.org.

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