Wolfowitz decries “smear campaign”

As I’ve said before, the campaign to oust Paul Wolfowitz as president of the World Bank isn’t really about whether or not he acted improperly in scoring his girlfriend a few extra thousand dollars a year. Nope, it’s really about a Bank president who was never right for the job and was never welcomed to the institution because of his role in selling and subsequently botching the Iraq War. Wolfowitz, too, believes it’s not about Shaha Ali Riza, as he told a special Bank ethics panel today:

The goal of this smear campaign, I believe, is to create a self-fulfilling prophecy that I am an ineffective leader and must step down for that reason alone, even if the ethics charges are unwarranted,” Wolfowitz said.

But surely even Wolfowitz (who, by most accounts, really is an ineffective leader) realizes that the end game has begun, and it’s no longer about whether he stays or goes. He’s pretty much already gone—the Japanese and the Europeans are subtly hinting that $30 billion in Bank fundraising over the next three years won’t materialize if Wolfowitz stays.

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It’s now a chess match over the terms of exit. The board doesn’t want to oust him, as one Bank official told the New York Times. And Robert S. Bennett, the ace legal troubleshooter Wolfowitz brought in to defend him, has tried to create even more leverage by hinting at forcing the release of potentially damaging information on the salaries and perks of other Bank employees. Most likely, Wolfowitz will try to go with his name cleared (and with a hefty severance package to boot).

This whole debacle raises the question of why, exactly, the process of choosing and firing a World Bank president is so bizarre. The United States is the largest shareholder in the Bank at around 16 percent, and controls nothing close to a majority. Yet the United States has the first and last word on the Bank president. Sooner or later, one would think, there’s going to be a shareholder revolt.