White House: World Bank can be effective with Wolfowitz Tue May 8, 2007 10:39 AM ET WASHINGTON (Reuters) - The White House said on Tuesday the World Bank could continue to be effective with embattled World Bank President Paul Wolfowitz in charge. "We believe that the World Bank can continue to be an effective development institution with Paul Wolfowitz as president," White House spokesman Tony Fratto said. Wolfowitz is embroiled in a scandal over a salary agreement for his companion, who also works at the World Bank. Board sources said on Monday a World Bank panel had found his handling of the promotion and pay increase for his companion represented a conflict of interest and broke rules. The panel has made no recommendation on how he should be reprimanded, the sources said. Wolfowitz, the former U.S. deputy defense secretary and a key architect of the Iraq war, has been given several days to respond to the findings. The White House said it continued to support Wolfowitz, but spokesman Tony Snow would not comment further. "This is a World Bank matter and I refer you back to them," he said.
Everyone knows this is just a ploy by the europeans to get back at Wolfowitz for being an architect of the Iraq war and thereby screwing up the sweet deal they had with Saddam on the Oil for Food program. When was the last time european pols were upset by corruption, sex scandals, favoritism or any of the other supposed wrongs at issue here? The UN is a cesspool of corruption, sexual harrassment, favoritism and ineffective leadership. Any complaints from the euros? The IMF has pushed toxic policies on thrid world debtors with disastrous results. The europeans get to name the Director, so no criticism there either. They see this scandal as giving them an opening to try to take away the US' right to name the head of the World Bank, but to his credit, Bush is not budging an inch on that. If they can force out the US's chosen man, in effect they have exercised veto power over the US' pick, which is also unacceptable. I'm not a Wolfowitz fan, but more is at stake here. The ideal solution would be for the US would sever its ties to not only the World Bank, but the IMF and UN, but that is probably not in the cards.
Now it turns out that Soros is behind the World Bank coup attempt. From Wall Street Journal Online: Axis of Soros The men and motives behind the World Bank coup attempt. Wednesday, May 9, 2007 12:01 a.m. EDT Mark Malloch Brown spoke Monday to a crowded auditorium at the World Bank's headquarters, warning that the bank's mission was "hugely at risk" as long as Paul Wolfowitz remained its president. Only hours earlier, news leaked that a special committee investigating Mr. Wolfowitz had accused him of violating conflict-of-interest rules. A coincidence? We doubt it. Mr. Malloch Brown, remember, was until last year Kofi Annan's deputy at the United Nations. In that position, he distinguished himself by spinning away the $100 billion Oil for Food scandal as little more than a blip in the U.N.'s good work, and one that had little to do with Mr. Annan himself. Last week, Mr. Malloch Brown was named vice president of the Quantum Fund, the hedge fund run by his billionaire friend George Soros. A former World Bank official himself and ally of soon-to-be British Prime Minister Gordon Brown, Mr. Malloch Brown would almost surely be a leading candidate to replace Mr. Wolfowitz should he step down. Not surprisingly, Gordon Brown cold-shouldered Mr. Wolfowitz at a recent meeting in Brussels. The bank presidency would be a neat coup for Sir Mark, and not just because the post has heretofore gone to an American. He also stands for everything Mr. Wolfowitz opposes, beginning with the issue of corruption. Consider Mr. Malloch Brown's defense of the U.N.'s procurement practices. "Not a penny was lost from the organization," he insisted last year, following an audit of the U.N.'s peacekeeping procurement by its Office of Internal Oversight Services. In fact, the office found that $7 million had been lost from overpayment; $50 million worth of contracts showed indications of bid rigging; $61 million had bypassed U.N. rules; $82 million had been lost to mismanagement; and $110 million had "insufficient" justification. That's $310 million out of a budget of $1.6 billion, and who knows what the auditors missed. Mr. Malloch Brown also made curious use of English by insisting that Paul Volcker's investigation into Oil for Food had "fully exonerated" Mr. Annan. In fact, Mr. Volcker's report made an "adverse finding" against the then-Secretary-General. Among other details, the final report noted that Mr. Annan was "aware of [Saddam's] kickback scheme at least as early as February 2001," yet never reported it to the U.N. Security Council, much less the public, a clear breach of his fiduciary responsibilities as the U.N.'s chief administrative officer. Mr. Malloch Brown described the idea that Mr. Annan might resign as "inappropriate political assassination"--a standard he apparently doesn't apply to political enemies like Mr. Wolfowitz. Mr. Malloch Brown never made any serious attempt to reform the U.N. beyond the cosmetic, while doing everything he could to block the real reforms proposed by Americans Christopher Burnham and former Ambassador John Bolton. He was, however, energetic when it came to lecturing Americans about what they owed the U.N., such as joining the "reformed" Human Rights Council (whose only achievement to date has been to castigate Israel), pursuing a "new multilateral national security," and otherwise empowering the likes of Mr. Malloch Brown, his multilateral mates and their tax-free salaries. Views like these help explain why Mr. Malloch Brown is in such favor with Mr. Soros, who has publicly suggested the U.S. will need a "de-Nazification" program to erase the taint of the Bush Administration. So close are the two that Mr. Malloch Brown lives in a suburban New York home owned by Mr. Soros. Mr. Malloch Brown says he pays market rent, though reporting by the New York Sun's Benny Avni disputes that. In any case, it's safe to assume that Mr. Soros's widely published views are close to Mr. Malloch Brown's somewhat more guarded ones. So it's not surprising that many on the World Bank staff would cheer Mr. Malloch Brown: He's perfect for an institutional culture in which "progressive" thinking goes hand-in-glove with a tolerance for corruption. That culture has been on vivid display in the Euro-coup against Mr. Wolfowitz. This weekend the committee investigating the claims dropped 600 pages in the president's lap and told him he had 48 hours to respond--in direct violation of World Bank staff rule 8.01, 4.09, which states that "the amount of time allowed a staff member to comment [on an investigative report] . . . will not be less than 5 business days." Following protests from Mr. Wolfowitz's lawyer, the committee gave him 72 hours. This is the same kangaroo court that last month leaked its guilty verdict to the Washington Post before Mr. Wolfowitz even had a chance to plead his case. Our sources who have seen the committee's report tell us it is especially critical of Mr. Wolfowitz for daring to object publicly to the committee's methods and thereby bringing the bank's name into disrepute. The Europeans running this Red Queen proceeding prefer that they be able to smear with selective leaks without rebuttal. Mr. Malloch Brown warned on Monday that, if Mr. Wolfowitz stayed as president, European countries might withhold funding from the next financing round for the bank's International Development Association. We hope he's right, though we know few European finance ministers who aren't eager to throw good money after bad. Still, it's a remarkable bit of chutzpah for the man who downplayed corruption at the U.N. to seek the ouster of the man who has fought to reduce corruption at the World Bank. If the Bush Administration now abandons Mr. Wolfowitz as he faces a decision from the bank's board of governors, it will not only betray a friend but hand the biggest victory yet to its audacious enemies in the George Soros axis.