The Wolfowitz affair at the World Bank may come to an end soon. As the New York Times reports, members of the board have put an informal ultimatum to U.S.

Until now, the U.S. had the prerogative to name the World Bank President. Now either Wolfowitz goes, or the U.S. will lose that privilege. Additionally some countries would withhold funds to World Bank programs and distribute them through other institutions.

But in its report the NYT skips around the real issue. Wolfowitz is indeed guilty. Not only did he put his girlfriend into a very lucrative position, he also lied to cover up the circumstances and his personal role in it.

When Wolfowitz came to the World Bank the rules required him to put some distance between himself and his girlfriend who worked there. He asked the bank’s ethic committee what to do and they suggested to promote her to a different position not under his direct regime and a possible pay rise as compensation. The ethic committee also recommended that Wolfowitz should advise the director of human resource issues to handle the case.

But Wolfowitz wrote a direct order to that director to give his girl an outrageous pay rise of 50% and a guarantee for automatic "outperforming" evaluations no matter what she would do.

Instead of letting the human resource director decide as recommended, Wolfowitz ordered him to sign off his personal decisions.

When the deal became public, Wolfowitz started a cover up. Through intermediaries at the Bank he led the public to believe that the ethics committee had signed off on the pay rise and the other perks for his girl.

As the Financial Times reports:

Paul Wolfowitz’s closest aide was involved in crafting an apparently
misleading public statement on the Shaha Riza secondment for
dissemination by World Bank spokespeople on an anonymous basis, the
Financial Times has found.
…
Ms Cleveland and Mr Kellems joined the bank with Mr Wolfowitz from
the Bush administration and have been at the heart of his presidency,
though in recent months they clashed over strategy.

Ms Cleveland
met Marwan Muasher, the newly arrived director for external relations,
on April 4 to discuss how to respond to leaks about the terms and
conditions awarded to Ms Riza.

They agreed on a statement that was to be briefed on an
anonymous or “background” basis by senior bank officials. This included
the apparently misleading claim that “after consultation with the then
general counsel, the ethics committee of the board approved an external
assignment agreement which was reached with the staff member”.

As we will see, this claim came from Wolfowitz himself. In response to that claim the ethics committee and the general counsel immediately declared that they had not approved the agreement.

Still Wolfowitz maintained so until weeks later it became clear that he had lied. Only on May 2 he send a letter explaining himself:

Mr Wolfowitz said he assumed the ethics committee was aware of the
terms and conditions because it decided a later anonymous complaint
about Ms Riza’s pay “did not contain new information warranting further
review”.

That was quite an assumption and it took Wolfowitz only four weeks to find out that this assumption was wrong? Somehow I doubt that anybody will believe his tale.

So despite all his resistance Wolfowitz may very well be gone by the end of the week. If only to keep his position in U.S. hands. (Might John Bolton be interested?)

This is not the best solution.

The U.S. abuses the World Bank, financed with other countries money, to further its interests and only its interests. I’d prefer to let Wolfowitz stay at the bank and to cut off the money. There are better ways to help the poor than pushing their countries to accept neo-liberal "Washington Consensus" programs.

As I wrote above, the New York Times does not mention the Wolfowitz cover-up attempt and his confessed assumption but continues to at least partly blame the banks institution. The Los Angeles Times also seems not to know anything about this. The Washington Post in a front page story today explains that a "key aid" to Mr. Wolfowitz made a wrong statement about the ethic committee’s involvement, but does not implicate Wolfowitz’ confessed personal role in making the false claim.

But the Wolfowitz letter (pdf) makes it clear that such statements were based on his assumptions and not just some excuses from a friendly key aid. Wolfowitz accused the ethics committee and the general counsel of the bank to have signed off his decision when they clearly had not done so.

But the Washington consensus of the U.S. media will not let you know that little tidbit. Instead all three U.S. reports linked above are bashing the World Bank for perceived unjust behavior against Wolfowitz because of his role in the Iraq war.

The unjust behavior here was clearly from Wolfowitz’ side, not from the bank, but WaPo, LAT and NYT do see no need to let the U.S. public know about this.