Does the World Bank have a future?

As “the world goes gaga” over the pay-raise World Bank president Paul Wolfowitz arranged for his girlfriend, California congressman Brad Sherman bemoaned Tuesday at a congressional hearing, a slew of other flaws within the bank are ignored.

At the finance committee hearing, examining the role and effectiveness of the World Bank in combating global poverty, Sherman was primarily concerned with the approximate $270 million the bank has given to Iran over the course of Wolfowitz’s tenure.

“How can we convince the Iranian people that they will be cut off from the world if they continue to develop nuclear weapons when they are getting money from the World Bank, some of it ours?” he asked.

American politicians stay in office by “bringing home the bacon, even though it’s not kosher,” he said, and “the Islamic Republic is bringing home the bacon from the World Bank.”

The panelists at the hearing agreed the bank had problems— though they didn’t exactly argue it had problems keeping U.S. interests in mind.

“There is a widespread perception that the policies and practices of the bank are disproportionately driven by the [Bush] administration,” said Dr. Joseph E. Stiglitz, a professor at Columbia University. “Those who lost favor with the administration risked losing loans, while countries in favor could engage in corruption, without losing funds.”

Stiglitz went through a list of other legitimate problems with the bank, such as insufficient checks and balances and fears of retribution against whistleblowers.

“Large numbers of its senior people have departed…demoralized by what they saw happening” in the bank, he said.

Besides that, the changing world market threatens the utility of the bank, said Dr. Robert Hunter Wade, a professor at the London School of Economics and Political Science.

“[The bank] faces a whole array of new competitors such as China and Korea… private consulting firms… and the Gates Foundation and other private foundations,” he said.

These other institutions have not, however, left the bank irrelevant, Wade argued. The bank is still effective, he said, thanks to its “inter-governmental guarantees, its own large revenue base and its global reach.”

Furthermore, the bank has the potential to become a real leader in areas such as global warming, Wade said. It could take the lead decoupling economic growth and carbon emissions with new financing instruments, like a “carbon fund” that would allow countries to borrow money for environment-friendly power stations.

The panelists also expressed hope that the perception of corrupt American power in the bank could be diminished—if Wolfowitz’s successor is chosen for the right reasons and not because he or she is American.

“President Bush can send a powerful signal to the world by throwing open the contest to the entire world,” said Stuart E. Eizenstat, co-chair of the Atlantic Council Commission on Transatlantic Leadership for a New Global Economy. “That would turn the tragedy of the Wolfowitz incident into a plus for America’s image in the world.”

Like always, the World Bank and the United States have a common interest—but this time it is finding a leader who may not put America first.

Were the wrong U.S. attorneys fired?

On Dec. 20, 2006, former assistant United States attorney Deirdra Brown-Fleming won a partial victory in the case against her inappropriate termination. The EEO Office of Federal Operations handed down a decision that day reprimanding Brown-Fleming’s former boss, U.S. attorney Alice Martin of the Northern District of Alabama, for violations of the Civil Rights Act.

It was a bad few weeks all around for U.S. attorneys.

Also on Dec. 20, U.S. attorney Bud Cummins of Arkansas left office to give up his seat for Tim Griffin, Karl Rove’s former aide. Cummins’ dismissal was just one of many that month. The firing of at least eight U.S. attorneys snowballed into allegations of political misconduct by the Dept. of Justice. The Justice Department initially claimed the firings were performance-related, though the prosecutors’ excellent records would suggest otherwise.

Meanwhile, in spite of the findings that racism existed in her office, Alice Martin remained—and still remains— in her role as federal prosecutor. On top of that, the Dept. of Justice is currently investigating allegations that Martin perjured herself during her sworn testimony regarding Brown-Fleming’s termination.

Brown-Fleming, the first African-American female to work in the Huntsville Branch of Northern Alabama’s U.S. Attorney’s Office, claims she experienced extreme harassment from her colleagues there; they punctured the tire of her car and constantly referred to her as “black bitch,” among other things, she says. After complaining about her colleagues in April 2002, Brown-Fleming was fired the next month because she was “not a team player.”

According to Brown-Fleming, Martin testified that she fired her before hearing about the allegations of racism in the office; this contradicts documentary evidence Brown-Fleming said she acquired under the Freedom of Information Act, such as a letter addressed to Martin marked “personal and confidential” from the EEOC regarding Brown-Fleming’s complaints. The Dept. of Justice began its investigation in 2004 into Brown-Fleming’s belief that Martin allegedly committed perjury, but it was held in abeyance until the EEOC completed its investigation into Brown-Fleming’s claims of racism.

Brown-Fleming said she also contacted Alabama Senator Jeff Sessions about the EEOC case; he wrote a letter to Attorney General Alberto Gonzales relating Brown-Fleming’s complaints. The Dept. of Justice responded Brown-Fleming should contact the Office of Professional Responsibility with her complaints.

The EEOC, when it handed down its decision, ordered the Dept. of Justice to pay Brown-Fleming more than $800,000 in back pay, as well as front pay, if she chooses not to be reinstated at the U.S. attorney’s office. The Dept. of Justice sent Brown-Fleming a letter on April 17 stating it was resuming its investigation of her belief that Martin perjured herself.

The fact that a federal body confirmed that Brown-Fleming’s firing was retaliatory, along with the pending investigation into whether Martin committed perjury, certainly cannot be helping Martin in her capacity as a U.S. attorney. Rather than targeting other well-accomplished prosecutors, perhaps the Justice Department could have saved itself a lot of trouble by reprimanding-- or at the very least investigating in a timely manner-- prosecutors who were already causing a little bit of controversy.

The Army's new recruits!

I caught the tail-end of the "Public Service Recognition Week" on Sunday, and unaware of what was going on, I thought I was walking into the middle of a military coup. The event was supposed to honor federal, state and local employees, but all I saw were military displays, complete with tanks, mini submarines, helicopters and automatic weapons brandished by our enemies abroad; maybe since I showed up at the end, the other displays had shut down already.

As kids in tourist-group t-shirts climbed atop tanks, I couldn't help but think that perhaps the military was using the event to employ some unique recruiting techniques. Maybe, given that the war is really putting a strain on the troops, they've decided to enlist some kiddie patriots. It might be a good idea to snare 'em in while they're young, since who knows how long the war will last, or how many more troops might be needed.

In any case, the display of military might on the mall really creeped me out. The monstrous tanks spanning the mall, diverting attention from the beautiful buildings and monuments that represent democracy, were a painful reminder of how the "war on terror" has taken precedent over civil liberties all too often in recent years. It also seemed ironic to be celebrating public servants in the midst of scandals that show how the administration has inappropriately politicized apolitical government positions. Seeing kids climb on tanks was also particularly disturbing since it was Mothers' Day yesterday.

Wolfowitz and Riza: How Sweet It Is!

Note my reporting attribution at the bottom:

At the start of the scandal triggered by the revelation that World Bank President Paul Wolfowitz had helped arrange generous pay boosts for his girlfriend Shaha Riza, Wolfowitz declared, "I made a mistake, for which I am sorry."

Two and a half weeks later, Wolfowitz had readjusted his rhetoric. "The ethics charges are unwarranted" and "bogus," he said.

On Friday, the Bank's board of directors was working to complete its report on the Wolfowitz affair and pondering whether to reprimand or even remove Wolfowitz. But regardless of the outcome of the official deliberations--which have been affected by behind the scenes maneuvering and the individual agendas of member nations--the Wolfowitz and Riza tale is one of Washington insiderism, a story in which a powerful player was able to guarantee that his companion would make hundreds of thousands of dollars a year and be entitled to a lucrative pension while working at a fledgling foundation with a friend of his. This is not how most public servants in Washington live.

After Wolfowitz, a former deputy defense secretary who was a prime architect of the Iraq war, assumed the Bank's presidency, he was faced with what he has called "a potential conflict of interest." He would be the boss (albeit not the direct boss) of his girlfriend, who was a communications officer in the Middle East section. He subsequently worked out a deal under which Riza would remain a Bank employee but be reassigned out of the Bank. What has caused the fuss is that this arrangement included a 36 percent pay hike--which raised her annual salary from $132,660 to $180,000--and guaranteed yearly pay increases of 8 percent. (She is now pulling in $193,000 a year.)

Wolfowitz has justified the initial compensation boost by arguing that when he arrived at the Bank Riza was short-listed for a promotion to communications adviser to the vice president of the Middle East region. Such a promotion would entail a jump in pay grade. The office of the vice president of the region had placed Riza's name on a short list of nine candidates, but, according to an official familiar with the deliberations of the human resources committee overseeing this job opening, Riza's position on the short list was not initially approved by the committee--a necessary step for her to receive the job. That did not end the matter. "It became clear the board was under strong pressure from upstairs to keep her on the short list," this official says.

Whether or not she made it to the final short list--Bank officials have different recollections--she was no shoe-in for the promotion. Two years earlier, Jean-Louis Sarbib, then the vice president for the Middle East region, had proposed Riza for a similar position, and the human resources board had rejected her. The board noted, according to a report made available to The Nation, that Sarbib should have sought other applicants for the position, that Riza "needs to establish herself as a communications professional," and that she should not receive a "promotion through the backdoor." Riza did not meet the minimum job qualifications: an advanced degree in communications and 15 years of experience. She was a gender specialist at the Bank--a well-known Arab feminist-- who had done communications work for only a few years.

In statements to the Bank's board, Wolfowitz has pointed to Riza's candidacy for the communications adviser post as a reason for awarding her a $47,340 compensation increase. "This raise is about double what you'd be allowed to get if you got that promotion," the official familiar with these deliberations said. "For Wolfowitz to use the argument that she was short-listed goes against what the committee said about her two years before. It does not justify the salary increase."

The Riza deal included more than that first big pay hike and annual increases. It also essentially guaranteed Riza subsequent promotions to higher pay grades. And the deal would provide her the yearly pay increases for up to ten years, if Wolfowitz remained at the Bank for a second term. By the end of a second Wolfowitz term, Riza, were she to stay a Bank employee, would make close to $400,000, possibly more.

These pay increases would lead to an outsized pension. According to a Bank source familiar with the institution's pension rules and formulas, pensions for Bank retirees are based on the average salary of an employee's last three years at the Bank. Under the Wolfowitz deal, Riza could expect an annual pension of about $110,000, if she retired in 2015 (assuming Wolfowitz served two terms). If Wolfowitz had not awarded her that initial salary hike of nearly $50,000 and she instead received steady annual raises of 4 percent over this ten-year period, her pension would be about $56,000. With the Wolfowitz deal, Riza could look forward to a rather comfortable pension.

And she could retire after working with a close friend of her boyfriend.

In September 2005, the Riza deal was finalized, and the World Bank and State Department agreed she would be seconded to the department's Bureau of Near Eastern Affairs. She was given the task of developing a foundation that would focus on reform in the Middle East and North Africa. It would eventually be called the Foundation for the Future. (At the time, Elizabeth Cheney, the daughter of the vice president, was a principal deputy assistant secretary in the bureau, coordinating Middle East initiatives.) But there aparently was some question about her status at the State Department. The next month, J. Scott Carpenter, a deputy assistant secretary in the Bureau of Near Eastern Affairs, faxed a note to the World Bank saying that "we do not view Ms. Riza as detailed or seconded to the U.S. Government." He offered to "further refine this arrangement." Documents released by the World Bank do not indicate what subsequently transpired between the State Department and the Bank regarding Riza's employment status.

Over a year later, on October 1, 2006, Anwar Ibrahim, chairman of the Foundation for the Future, wrote Robin Cleveland, a senior Wolfowitz aide at the Bank, and requested the transfer of Riza from the State Department to the Foundation for the Future. Two months later, after Cleveland instructed the Bank's vice president of human resources to approve the transfer, the Bank okayed the switch.

The Anwar letter and other Bank documents related to this transfer did not mention that Anwar is a longtime friend of Wolfowitz. One of Asia's most prominent Muslim politicians, Anwar was a former deputy prime minister of Malaysia. He and Wolfowitz met and developed a friendship in the mid-1980s, when Wolfowitz was U.S. ambassador to Indonesia, according to Aasil Ahmad, an adviser to Anwar. In 1998, after addressing a rally protesting the government, Anwar was arrested and subsequently jailed on corruption and sodomy charges. During his years in jail, Wolfowitz was an outspoken champion of Anwar. Shortly after the 9/11 attacks, Anwar, while still imprisoned, wrote an essay condemning the attacks and calling on the Muslim worked to address "the suffering inflicted on the Muslim masses in Iraq by its dictator."

When Anwar was released from prison in 2004, Wolfowitz flew to Germany to meet him. The next year, Anwar, a former finance minister for Malaysia, endorsed Wolfowitz's appointment to the Bank, though he noted that he didn't share Wolfowitz's view of the Iraq war. ("The best the Americans can do is to withdraw their forces from Iraq," Anwar said.) These days, Anwar is back in Malaysia, advising the PKR opposition party, which is led by his wife, and preparing to run for president.

While helping to establish the Foundation for the Future at the State Department, Riza had recruited Anwar to serve as its initial adviser, according to Ahmad. The two then went about selecting a board of directors and drawing up the mandate for the group, which calls on the foundation to "advance and strengthen freedom and democratic trends and practices" in Middle Eastern and North African nations by supporting reform, media, human rights, and women's groups in those countries. The foundation, which is not a US government entity, has received a $35 million funding commitment from the United States and about $20 million in pledges from other governments. The board includes prominent citizens of Muslim nations. Former Supreme Court Justice Sandra Day O'Connor is the only American on the board.

The foundation has not gotten off to a big start. It has yet to provide a single grant. Its first president, Bakhtiar Amin, an Iraqi who served as a minister in the first interim government set up following the invasion of Iraq, left the post after a short time in the job. "He was not up to the task," says a source who has worked with the foundation. No replacement has yet been selected. The group also does not have a chief financial officer or a chief operations officer at this time. Last year, it decided to open its main Middle East office in Beirut--right before the war in Lebanon. It has no permanent office in Washington. Email requests for information on its activities have gone unanswered. Its website lists no phone number. But Ahmad, the adviser to Anwar, says the foundation will soon begin awarding grants, perhaps in the beginning of June. Riza, he says, has continued to handle the day-to-day operations of the foundation. Riza, who is qualified for the job, has not been talking to the media.

Bloggers have raised conspiratorial questions about the foundation. (See here.) The available evidence is that the outfit is legitimate, though it has been beset with logistical problems. But until it gets around to handing out grants, its work and aims cannot be fully assessed.

In the Paul and Shaha saga, the work (or non-work) of the Foundation for the Future is not the main issue. Riza ended up there after a Wolfowitz friend (Anwar) wrote the Bank and asked for Riza to be detailed to the foundation--and a Wolfowitz crony (Cleveland) said yes. Whether such actions violate any Bank rules, this is incestuous. Consider the overall scenario: thanks to her boyfriend, Shaha Riza, after receiving a hefty pay raise, could serve as an adviser to a barely-functioning foundation she helped create, working with a friend of her romantic partner, and pull in $200,000 to $400,000 annually over the next ten years. And then she could retire with a $110,000 per year pension. This is quite a deal for the average foundation aide in Washington. In all that, is there nothing wrong? (Wolfowitz attorney Robert Bennett told Newsweek that it was Riza who "worked up the numbers" and pressed Wolfowitz to craft such generous terms.)

After first admitting he committed an error, Wolfowitz now fiercely argues he is the victim of a smear campaign waged by Bank employees who opposed him from the get-go due to his role in the Iraq war. His detractors at the Bank may be out to bring him down as payback for Iraq and for his heavy-handed management ways at the Bank. But Wolfowitz, who entered the Bank a self-styled scourge of corruption, has handed them potent ammunition. Every recipient of World Bank money must now want deals with terms so sweet.

With reporting from Stephanie Condon.

A comment on the previous post

I am admittedly perturbed that David chose to use part of my article on his blog without giving me any attribution. He told me the next morning that it was well-written but that the "core point" needed to be changed; however, by the time he read it, I had already left for my second job, so he chose to change it himself and post it as his.

In all honesty, the article I posted as my own is slightly different than the one I initially turned in to David. His main critique of my article was that it was too incendiary-- it sounded like I was giving credibility to a terrorist, something he certainly couldn't do on his blog. My original article was indeed more incendiary than the version I have posted (though it wasn't that different). The posted one may still be too sympathetic of Nasrallah. I am in no way validating the terrorist actions of Hezbollah; I do think, however, that my point has merit.

The Israeli Lesson

This is from David's blog. He "borrowed" what I wrote (see previous post):

Can we learn from the Israelis?

Four and a half years ago, the Bush administration sold the Iraq war to the public with embellishments and faulty information (to be polite about it). Now Democrats in Congress are finally trying to hold the administration accountable.

The House oversight and government reform committee, chaired by Democratic Representative Henry Waxman, authorized a subpoena last week requesting that Secretary of State Condoleezza Rice testify in front of the committee about one of the administration's false reasons for war—that Iraq was trying to acquire uranium from Niger. Not only has Rice said she will not respond to the subpoena, Republican committee members are nay-saying the subpoena. "I understand why the Democrats want to kick Bush, but what would it achieve?" said Representative Chris Shays, a Connecticut Republican, according to The Hill.

Compare this to the Israeli model. A commission appointed by Prime Minister Ehud Olmert released a report this week that blasted Olmert's handling of the month-long war last year in Lebanon between Israel and Hezbollah. As AP put it, the report accused the prime minister of "hasty decision-making, failing to consult others and neglecting to assess the chances that his goals could be accomplished." Sound familiar? The report has prompted tens of thousands of Israelis to protest and demand Olmert's resignation.

There have been investigations in the United States of the intelligence failures that preceded the invasion of Iraq. The Senate intelligence committee and a presidential commission both lambasted the CIA for botching the intelligence on WMDs in Iraq. But there have been no investigations of Bush's decision to invade Iraq, his failure to plan adequately for the post-invasion phase, and his poor management of the war effort in the years since. Olmert messed up less than a year ago, and a panel (that he created) has already investigated his actions and rendered a harsh and official judgment of his actions. In the United States, there has been no such accountability. Can you imagine Bush appointing a panel to investigate his decision to invade Iraq and his handling of the war and the post-invasion challenges in Iraq?

The Virtues of Accountability

Four and a half years after the Bush administration sold the Iraq war to the public with embellishments and faulty information, Democratic leadership in Congress is finally trying to hold the administration accountable.

The house oversight and government reform committee, chaired by California representative Henry Waxman, authorized a subpoena last week requesting Secretary of State Condoleezza Rice testify in front of the committee about one of the administration's false pretenses for war—that Iraq was trying to acquire uranium from Niger.

Not only has Rice said she will not respond to the subpoena, but Republican oversight committee members are also nay-saying the subpoena.

"I understand why the Democrats want to kick Bush, but what would it achieve?" said Rep. Chris Shays (R-Conn.), according to The Hill.

Well, perhaps Rice and Shays could learn from events overseas that holding the president and his team of neo-cons accountable for the war could achieve plenty: it could earn us some respect from the Iraqi people, which is no doubt crucial if a continued U.S. presence is to achieve anything substantial in Iraq.

An Israeli commission, appointed by Israeli Prime Minister Ehud Olmert himself, recently issued a report blasting Olmert's handling of the month-long war last year in Lebanon between Israel and Hezbollah. According to the AP, the report accused the prime minister of "hasty decision-making, failing to consult others and neglecting to assess the chances that his goals could be accomplished"—all accusations that should sound familiar to the Bush administration.

The Israeli people have taken to the streets, demanding accountability from Olmert. In Lebanon, Hezbollah leader Hassan Nasrallah came out with praise for the report. He had this to say:

"When the enemy entity acts honestly and sincerely even if its cause is unjust we cannot but respect it, especially when we look at the other (Lebanese) side which does not investigate, does not study and does not hold (anyone) accountable and does not form investigative commissions as if nothing has happened."

Surely, as the leader of the group that incited the violence of the month-long war in the first place and that the western world calls a terrorist organization, Nasrallah's words can only be given so much weight. And as the AP points out, the motives behind Nasrallah's comments may be less than clear.

Nevertheless, it is undeniable that Nasrallah has the genuine support of a large number of Lebanese civilians and his words carry influence. If Nasrallah speaks for the general public when he offers his respect to the Israeli government, perhaps there is hope that some mutual respect and understanding, and the potential for less violence, can be gleaned from that.