Paul Wolfowitz, President of World Bank, announced he would resign his position by the end of June, leaving under a dark cloud that stemmed from a controversy regarding a $50,000 pay raise with a guarantee of further raises and promotions that he engineered for Shaha Ali Riza. Ms. Riza is also employed at World Bank and is and has been Wolfowitz’s girlfriend since before his assignment as President.
Wolfowitz was appointed President of World Bank by President George W. Bush. Traditionally, the US has the right to choose the president given the fact that they are the bank’s largest donor. Europeans choose the head of the International Monetary Fund.
Back in 2005 when Wolfowitz was mentioned as a possible candidate, opposition to his appointment (and there was a lot of it) was based on the fact that his girlfriend worked for the bank and therefore a conflict of interest existed. Opponents also believed the World Bank appointment was payback for a political favorite of the Bush administration and would not be in the best interest of World Bank. President Bush appointed Wolfowitz, who previously held the position of US Deputy Secretary of Defense, as President of World Bank effective June of 2005
Ok enough history. Hindsight and foresight and all that aside, you would think that a reasonably intelligent person would know going into the job that he would be under scrutiny in his dealings in any controversial areas. Especially anything having to do with his girlfriend. End result: Wolfie cuts a sweetheart deal for his sweetie, loses his job and the White House takes another black eye for promoting loyalty rather than ability.
The White House said it would have a new candidate to announce soon. Possible candidates are former Deputy Secretary of State Robert Zoellick, who was Bush’s former trade chief; Robert Kimmitt, the No. 2 at the Treasury Department; Treasury Secretary Henry Paulson; Sen. Richard Lugar, R-Ind.; Stanley Fischer, who once worked at the International Monetary Fund and is now with the Bank of Israel; former Republican Congressman Jim Leach, and Former Senate Majority Leader Bill Frist . Sources have pretty much ruled out Fischer and Volcker since the White House will probably want someone more in line with Republican policies.
‘More in line with Republican policies’ can be translated into ‘who does the White House owe the most to for loyalty and support’. Any appointment for President based on political favoritism will put the World Bank in a tenuous position. The fear is that protectionism is coming and the US is leading the charge. Senator Frist has already involved the US in charges of protectionism and political favoring, abetted by former Congressman Jim Leach, with the passage of UIGEA. Frist’s underhanded method of getting the UIGEA passed in payment for political support, his total lack of concern regarding the ruling by the WTO and the ramifications the legislation would have for the US and the WTO; all of his sidewinding antics displays his complete unsuitability for the position. Please notice that both former Senator Frist and former Congressman Leach are on the short list for the job. As former Senate Majority Leader, Frist stands in line to be owed the most by the Bush administration.
The White House may be setting itself up for another black eye by appointing either of these two men but the World Bank will be the one that will go down for the count.