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Friday, April 28

Paul Wolfowitz forms cabal at World Bank: Pundita is shocked! Shocked!

Mohamed Hakki's rag on Paul Wolfowitz is the funniest unintentionally funny article I've come across this century. Hakki, a former World Bank employee, reports that many at the Bank are upset because Wolfy started his own cabal.

What's so funny is that the World Bank has long been Cabal Central. Bank employees of the same nationality (e.g., Filipino, Pak) form 'mafias' inside the Bank to push agendas for their particular developing country.

True, a Bank president has never before formed a cabal; the prez being an American and all, it's not considered pukka sahib if he tries to form his own gang. No, the post of the World Bank president is meant for being at the mercy of the Bank's Mandarins and getting blindsided by the mafias.

More unintended humor from Hakki's description of exiting Bank employees termed "top talent." Understand that the Bank had no institutional integrity and displayed no adherance to ethics until Paul Wolfowitz put teeth in the Bank's anti-corruption efforts. But let us start with Hakki's sour grapes, Cronyism and Corruption, published by Counterpunch in March:
[...]"In recent months, there had been a massive exodus of top talent from the World Bank. The senior ethics officer of the bank has departed. Also on the exit roster are the vice president for East Asia and the Pacific, the chief legal counsel, the vice president for environmentally and socially sustainable development, the bank's top managing director, the director of institutional integrity (who monitors internal and external corruption), and the head of the information solutions group.

Steve Clemons says in the Washington Note: "It looks as if Wolfowitz is gut-punching the most talented teams at the Bank and morale is plummeting. A lot of good people are leaving."

What has Wolfowitz done to start this serious wave of negative sentiment? He appointed Kevin Kellems, former communications director and spokesman for Vice President Cheney, to a newly created post of director of communication strategy in addition to his position as advisor to the president, effectively sidelining the vice president of communication, UN and External Affairs at the Bank. While one could question Kellems' professional ability and record in view of his previous position and the miscommunication that flowed from Cheney's office over the years, the immediate issue for Bank staff is that he was imposed following a Wolfowitz presidential fiat. Wolfowitz in effect, forced a political appointment at the director level, which is rather unheard of, especially since directorships are lower in the administrative stratosphere and are traditionally filled following an open competitive process based on merit, not political imposition.

Another glaring example of presidential fiat came with the appointment of the Bank's new corruption czar, Suzanne Rich Folsom, as the new head of "institutional integrity". Her catapulting prompted the courageous and highly respected chairwoman of the Bank's Staff Association, Alison Cave, to issue an open letter of protest to all staff. Ms Rich, married to a powerful Republican leader and a powerful Republican lobbyist in her own right, was also appointed with no concern for clear and open competitive process. She also has the title of "Counsellor to the President". A clear conflict of interest if there was ever one.

Another example involves the appointment of Karl Jackson, an old friend of Wolfowitz and colleague from Johns Hopkins University as well as government, as an advisor to the president, and who apparently has been handed the portfolio of the International Finance Corporation (IFC), the Bank's private sector supporting arm.

Perhaps the most stunning example of Wolfowitz's cronyism and complete lack of regard for the principles of the institution he has been handed to govern, not to mention the obvious appearance of conflict of interest, involves the ever-growing role of his senior counsellor, Robin Cleveland. Ms Cleveland left the Bush administration under a cloud after it emerged that she attempted to use her connections to get a relative a job at a large defence corporation while she was negotiating a contract on behalf of the US government with them. However, even this apparently has not tarnished her stature in the neocon's books, as it is said that Ms Cleveland effectively is now running the Bank.

All these examples are only serving to fuel Bank staff's growing doubt with the stewardship of Wolfowitz. One key senior official called it "utter shamelessness". Another old time Bank staffer said "the fight against global poverty is essentially a moral cause; if we lose the moral high ground, by disregarding transparency, competence, and integrity in our own institution, nothing else is left."

Others are saying he is appointing political hacks to positions that should be filled by highly qualified professionals through a competitive and transparent process. Senior Bank staff sees Wolfowitz withdrawing from the Bank's senior professionals and relying instead on a group of political operatives, zealots and ideologues. The current confusion and concern of the staff of the Bank over the direction of this global institution is best reflected in the results of the institution's own staff survey, released only last week.

When asked: "Do you have a good understanding of the direction in which World Bank Group senior management is leading the institution?" only 48 per cent of respondents answered favourably, in contrast to a 67 per cent favourable response during the previous staff survey in 2003.

No one is comparing Wolfowitz with any of the former Bank presidents any more. Everyone is saying that he is building his "cabal" of supporters at the highest levels of the institution and confirming all their worst fears of foisting a Bush administration agenda on the world's premier development agency. Meanwhile, the board of executive directors, which represents the 184 member countries of the World Bank, remains scandalously silent. Quel domage!"
That no one at the Bank is comparing Wolfy with any other Bank president is a great compliment to him and a hopeful sign that he's holding his own against the Mandarins.

As to the claim that Wolfy is appointing "political hacks" to positions that "should be filled by highly qualified professionals through a competitive and transparent process" -- hey, political hacks is a step up from appointing professionals who serve Russian and Chinese mobsters, outlandishly crooked government officials, George Soros, and Brussels.

As for transparency: the Bank's unofficial motto is "It's not what you know at the Bank, it's who you know."

Yes, the Bank sorely needs transparency and a truly competitive appointment process. Starting the process can't happen until the biggest obstacles at the Bank resign.

Now for another view of Wolfy's efforts at the Bank. Thanks to Nile Klein at Internews Network for alerting me to David Hoffman's opinion piece, which was published April 4 in the International Herald Tribune:
World Bank should link loans to press freedom
At 1 a.m. on a recent morning in Nairobi, masked police officers broke into the offices of KTN television and The Standard, a Kenyan newspaper, both owned by the Standard Media Group. Commandos with assault rifles seized files and equipment. The printing press was shut down, newspapers were burned, employees terrorized and three reporters were jailed.

While the Kenyan president and several ministers pleaded ignorance of the assault, John Michuki, the internal security minister, admitted that the press raids were planned by government officials, who presumably wanted to send a signal to the Kenyan media that recent reporting on government corruption would not be tolerated. "When you rattle a snake you must be ready to be bitten," he said.

Such a blatant crackdown on the media had not been seen in Kenya for 20 years. While 26 embassies and international organizations protested, including the United Nations, the World Bank, as is its custom, kept silent.

Then, after hesitating for six days, the bank openly rebuked the government for the raid, and The Standard reported that the bank had imposed a new rule making press freedom a condition before the World Bank would agree to release $250 million in frozen loans. The loans had been withheld since reports surfaced of massive government fraud, even before John Githongo, appointed by President Mwai Kibaki to be Kenya's "anticorruption czar," exposed details of government graft and fled the country.

Colin Bruce, the World Bank's country director in Kenya, denied that the bank was making freedom of the media a new element of conditionality, but by then the Kenyan stock market had already tumbled.

Even if formal conditionality has not been imposed, the World Bank's president, Paul Wolfowitz, is quietly breaking precedent by ordering the bank to publicly protest when press freedoms are under attack.

Wolfowitz understands that open news media are the most important means to expose the endemic corruption that is undermining economic growth in the developing world. And he is determined to do more than just talk about it. He recently held up $800 million in loans, including the quarter of a billion dollars for Kenya, because of allegations of corruption. "Corruption is the biggest threat to democracy since Communism," Wolfowitz has said.

Wolfowitz and senior World Bank economists know that strong, independent news media play a key role in promoting transparency and good governance, which in turn lead to economic and political development. Corruption can only flourish when governments operate with impunity outside the bright lights and public exposure that independent media bring. So autocrats and corrupt politicians everywhere seek to suppress their homegrown independent media.

The bank has been reluctant in the past to speak out on this issue for fear that it would be seen as interfering in the domestic politics of sovereign states. But media freedom is a universal right; it is also a precondition for tackling the central issue of corruption. As Wolfowitz has said, "you really can't talk about economic development without talking about freedom of the press."

If Wolfowitz and the Bank are to attack corruption effectively, they would also be well advised to make media freedom a precondition for future loans. The adoption of a media accountability index with common standards, to measure a country's compliance with basic media freedoms, would greatly reduce corruption in the developing world.

Inducements to increase transparency within government can only go so far. Unleashing a free press makes the public an active participant in reform. Protected by the threat of World Bank sanctions, the media everywhere would play their natural role of watchdog of the public interest.

In his book, "America at the Crossroads," Francis Fukuyama concludes that domestic pressure is the most effective force for long-term institutional reform. A free press guarantees that the public is informed and has a voice. By making press freedom a condition for its loans, the World Bank would protect the media, allowing them to defend the public's right to transparency and accountable government.

The bank is moving in the right direction. Media conditionality would be a decisive step forward.

(David Hoffman is President of Internews Network, an international non-profit organization that promotes access to information for people around the world.)
I think we may surmise that Wolfowitz had to do battle for six long days before the Bank Mandarins agreed to a formal rebuke of Kenya's government. In light of the Bank's history of looking the other way, the rebuke is astounding.

Of course there is much more to be done; a Reuters report by Gilbert Le Gras, filed April 21, points to the obstacles ahead. Wolfowitz's latest anti-corruption measures have come under fire from non-governmental organizations and protesters for "not going far enough."
"Corporate corruption, who can we thank? The IMF and the World Bank," chanted a half dozen protesters from a collection of advocacy groups who interrupted Wolfowitz during his briefing to kick off the bank's spring meeting.

Wolfowitz has targeted graft as a major impediment to development and called for greater transparency in countries that receive aid.

"The best check against corruption is strengthening governance and regular monitoring, transparent information, rewarding success and penalizing failure," Wolfowitz said at the briefing.

His anti-corruption plan includes training civil servants, judicial reform and freedom of information as well as a new system to curb the risk of corruption on World Bank projects.

He also said last week that he wanted to expand his collaboration with groups interested in improving fiscal transparency, like civil organizations and the private sector."[...]
The road ahead is very difficult. Yet during the short time he's been at the helm Wolfy's made more progress on the anti-corruption front than all World Bank presidents put together. That goes to show what can happen when brains are backed with relevant experience (e.g., getting needed reforms pushed through at the Pentagon), the cooperation of a US President -- and a cabal.

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