Will Paul Wolfowitz stay or go?

From the World Bank's Development Committee communique: We have to ensure that the Bank can effectively carry out its mandate and maintain its credibility and reputation as well as the motivation of its staff. The current situation is of great concern to all of us. We endorse the Board's actions in looking into this matter and we asked it to complete its work. We expect the Bank to adhere to a high standard of internal governance. What exactly is "the current situation"? Let's go to Sebastian Mallaby: The scandal centers on the pay of people around Paul Wolfowitz, the World Bank president. Kevin Kellems, an unremarkable press-officer-cum-aide who had previously worked for Wolfowitz at the Pentagon, pulls down $240,000 tax-free -- the low end of the salary scale for World Bank vice presidents, who typically have PhDs and 25 years of development experience. Robin Cleveland, who also parachuted in with Wolfowitz, gets $250,000 and a free pass from the IRS, far more than her rank justifies. Kellems and Cleveland have contracts that don't expire when Wolfowitz's term is up. They have been granted quasi-tenure. Then there is the matter of Shaha Riza, a long-standing bank official who is Wolfowitz's romantic partner. She went on paid leave (seconded to the State Department) after Wolfowitz arrived; her salary has since jumped from $133,000 to $194,000. When questions were first asked about Riza's rewards, a spokesman declared that the matter had been handled by the bank's board and general counsel, implying that the bank president himself had not been responsible. But the truth was that Wolfowitz had been closely involved, as a contrite Wolfowitz admitted yesterday. Treating an anti-poverty institution this way would look bad under any circumstances. But the scandal is especially damaging to Wolfowitz because his leadership had generated questions already. He has alienated the staff by concentrating too much power in the hands of Kellems and the abrasive Cleveland; he has alienated shareholders by presenting half-baked strategy ideas; he has alienated borrowers by blocking loans, sometimes capriciously. Moreover, Wolfowitz has made the battle against corruption his signature issue. He of all people should have thought twice before sanctioning exorbitant pay for his entourage. In context, the Development Committee statement is pretty damning. The New York Times' Steven Weisman explains: Though the language was indirect, the message it sent was unmistakable, according to officials who have been meeting in Washington the last few days. ?Words like ?concerned,? ?credibility? and ?reputation? are pretty unprecedented for a communiqu? from a place like the World Bank,? said an official involved in the drafting of the statement. At issue in these statements was a crisis arising from Mr. Wolfowitz?s involvement in decisions to transfer his companion, Shaha Ali Riza, to a new job and give her a raise. Officially, Mr. Wolfowitz and the bank are now to wait for a full report by the bank?s board on his leadership and charges of favoritism in dealing with Ms. Riza, who was employed at the bank until 2005. But bank officials said that in delaying a finding, the board seemed to be buying time for Mr. Wolfowitz to consider resigning. European officials close to the bank said that if anything, Mr. Wolfowitz?s apparent dismissal of the criticism on Sunday would increase the determination of the wealthy European donor nations of the bank ? especially Britain, France and Germany ? that he needed to step aside for the good of the bank.... ?We have not heard anything that will change our minds,? said April Cave, chairwoman of the association that represents most of the bank?s 7,000 employees in Washington. ?He has apologized, but he hasn?t shown how he can restore trust at the bank.?It should be noted that Wolfowitz has his supporters among African representatives. And lord knows the Bank does not have completely clean hands when it comes to corruption. As the Economist points out, the Bank's ethics board is complicit in giving Wolfowitz the ability to transfer Riza. Click here for Wolfowitz's own explanation. [UPDATE: The Wall Street Journal has an editorial that makes these points even more forcefully.] In theory, I suppose Wolfowitz can try to ride out the media storm. In practice, I don't see how he can continue when he's alienated both the Bank staff and powerful donor countries. Question to readers -- who leaves first, Wolfowitz or Alberto Gonzales?