Neocons and nepotism? Sex, money & the fall of Wolfowitz

Neocons and nepotism? Sex, money & the fall of Wolfowitz
By Rupert Cornwell
Independent UK
Published: 11 April 2007

The man affectionately known as 'Wolfie' by George Bush has struggled to make friends in his new job as the head of the World Bank. Now his staff are accusing him of lavishing promotions and pay rises on his girlfriend

For a mild-mannered and scrupulously polite man, Paul Wolfowitz has a remarkable knack of attracting controversy. There are the minuscule controversies - such as when, in his current incarnation as President of the World Bank, he was seen to have holes in his socks when he took off the mandatory slippers after a visit to a mosque in Turkey earlier this year. Was this handsomely paid international civil servant such a cheapskate that he wouldn't shell out a few dollars for some new socks?

Then of course there are somewhat more serious controversies, among them the war in Iraq, of which Wolfowitz, then deputy Secretary of Defence, was one of the most enthusiastic advocates and principal architects.

Wolfowitz, it will be remembered, fervently believed that the American invaders would be hailed as liberators, and that the occupation would require no more than 100,000 troops at most. These surely rank as two of the more disastrous military misjudgements of recent times.

And now he is in yet more trouble, this time over the promotion and lavish pay rises accorded to his partner, a former senior employee of the Bank. Shaha Riza is a British national of Libyan ancestry who grew up in Saudi Arabia. She and Wolfowitz have been together since his previous marriage broke down in 2001. Indeed, her strong belief in bringing democracy to the Arab world is said to have only strengthened her partner's determination to confer that boon on Iraq.

Their relationship became public when Wolfowitz succeeded James Wolfensohn at the helm of the Bank in mid-2005. At first he attempted to keep her in her job as communications adviser at the Bank's Middle East department, even though that was flatly against the ethics rules of the organisation. In the end she was sent to the State Department, but stayed on the World Bank's payroll. She was promoted and given two rises well above staff norms, bringing her salary to $193,000 (£98,000) - more than Condoleezza Rice, the Secretary of State.

Among Bank employees, the indignation was widespread and understandable. Given Wolfowitz's reputation as a neoconservative and his identification with George Bush's war in Iraq, he was an unpopular choice as president from the outset.

Since then, he has made the fight against corruption, both in countries receiving World Bank aid, and among Bank employees, a priority issue.

But was not the Riza affair an example, if not of corruption, then at least of favouritism and nepotism, those selfsame Third World vices against which Wolfowitz now campaigns?

Last week the Bank's staff association formally complained about the promotion and pay increases, and on Monday Wolfowitz promised in an email to employees that the association would have full access to the facts of the case, for which he accepted "full responsibility".

In the meantime, Riza has left the State Department. She is now said to be working for the Foundation for the Future, an international group largely funded by the US, whose prime mission is (you've guessed) to advance freedom and democracy in the Middle East and north Africa. But will that be the end of the matter?

Paul Wolfowitz, after all, is a man who carries a good deal of baggage. When he was named by Bush to head the Bank in early 2005, an in-house survey found that nearly 90 per cent of staff opposed the choice.

Wolfowitz, it was feared, would be a mere placeman of the White House, sent in to further the global political agenda of the Bush administration. Fairly or unfairly, he was regarded as a neocon zealot with no feel for, or qualification for, the Bank's mission of helping the developing world. Accusations of cronyism reared their head.

Rather than choose Bank people as his top aides, Wolfowitz brought in Republican political operatives, at least two of whom - Robin Cleveland, a former senior White House official, and Kevin Kellems, who had worked in Vice-President Dick Cheney's office and the Pentagon - had been deeply involved in pre- and post-war Iraq policy. Staff resentment of these outsiders in part reflected the resistance to change inherent in the culture of any large bureaucracy.

But the complaint of one former Bank employee to The New Yorker this month about the pair's modus operandi - "We are brighter than other people, we know more than other people" - was an eerie echo of the arrogance (and ignorance) of the US officials who ran Iraq after the war. Small wonder suspicions of the new boss ran so strong, and that a host of senior staffers, including six vice-presidents, left after Wolfowitz's arrival.

In fact few people are so different from their public image as the man that President Bush used to refer to affectionately as 'Wolfie.' A less lupine figure it is hard to imagine. Wolfowitz is soft-spoken, courteous, a listener rather than a talker.

He is an intellectual, who was Dean of the School of Advanced International Studies (SAIS) at Johns Hopkins University in Washington for eight years, before becoming Donald Rumsfeld's deputy at the Pentagon.

To be sure, Wolfowitz's career has followed the familiar neo-con path, from the young man who espoused liberal causes and marched with Martin Luther King in the early 1960s to the foreign policy hawk of little more than a decade later, convinced that only by projecting its strength and its values abroad could America defend itself at home, first from the Communist, then the terrorist, threat.

Like many neo-cons, he is Jewish, and a passionate supporter of Israel, where his sister now lives. He was also a prime mover in the neo-con manifesto of the 1990s, the Project for a New American Century. He sees himself less as a neo-conservative than as a pragmatist and realist, but in fact much of the youthful idealism remains.

Wolfowitz, the fire-breathing dragon who helped set the Middle East ablaze is in truth "a bit of a softie," Karl Jackson, who worked closely with him at SAIS, told The New Yorker. "He really believes in helping people who are economically deprived."

Often forgotten are his three years as ambassador to Indonesia, that quintessentially Third World country, for three years in the late 1980s, where Wolfowitz earned much praise (as well as criticism, for failing to take on the corruption endemic to the Suharto regime).

And this same archetypal champion of the Jewish state was actually booed at a pro-Israel rally in Washington in April 2002 for daring to remind them of the sufferings of the Palestinians.

The real problems with Wolfowitz in high office, whether at the World Bank or at the Pentagon, are his shortcomings as a manager. That was one reason, as the journalist and Bush court journalist Bob Woodward wrote in his most recent book State of Denial, that Paul Bremer and not Wolfowitz, was chosen to be the US pro-consul in Iraq after the 2003 invasion.

"The deputy Secretary of Defence was a thinker," Woodward records, "but he could barely run his own office."

That trait, by all accounts, has been evident at the Bank. He is not the hands-on, all-action, deftly self-promoting chief executive that was Wolfensohn. Nor is he a proven corporate manager, spewing out plans and bullet charts, like Robert McNamara, the defence secretary under Presidents Kennedy and Johnson and the World Bank President with whom Wolfowitz is often compared.

With one glaring exception, there is no "Wolfowitz doctrine". True, Bank officials are carrying out a review of strategy, which could see it shifting support from social projects like education and health to core schemes directly promoting economic growth.

"The question is - what is our comparative advantage, where can we contribute," Wolfowitz told The Financial Times.

But an administrative earthquake seems unlikely. "I do not think there is an urgent change of direction needed."

Nor are existing urgent goals to help the most impoverished being met. The first G-8 summit Wolfowitz attended was at Gleneagles in July 2005, when world leaders agreed to double aid to Africa by 2010, and write off billions of dollars of debt owed by the poorest countries.

Instead, World Bank lending to Africa in the last nine months is down $1bn from a year before. The explanation, however, may lie in the glaring exception referred to above.

Jim Wolfensohn had been the first Bank president to explicitly target "the cancer of corruption" in many borrower countries, thus breaking the unwritten rule that the Bank keep politics out of development.

In many respects, the new emphasis made perfect sense: up to 20 per cent of foreign aid is said to be swallowed by corruption, and indisputably, aid works best when disbursed to countries with efficient governments and honest officials.

Wolfowitz has not only made the corruption issue his own. He has also appeared to apply it on an arbitrary and unpredictable basis. The broader objections to making the fight against corruption the holy grail of development policy are two-fold. For one thing, corruption and economic success are not necessarily mutually exclusive (just look at China); and second, when the Bank withholds aid it merely hurts the weakest and poorest citizens of the country it is supposedly helping.

But the random fashion in which Wolfowitz applied the corruption sanctions fanned a third suspicion - that his hit list had been drawn up not by the World Bank, but by the Bush administration. Under pressure, Wolfowitz has now agreed to a compromise set of anti-corruption rules, whereby lending would only be halted in "exceptional circumstances".

But this breakthrough is unlikely to rescue the Wolfowitz era at the World Bank. By convention, a president is nominated by the US government, the Bank's largest shareholder, for five years, and assuming a Democrat wins the White House in 2008, Wolfowitz' term is unlikely to be renewed when it ends in 2010 (assuming of course that the Riza affair does not end it sooner).

Whatever happens however, the man with whom Paul Wolfowitz will be compared is Robert McNamara. The two have much in common. Both came to the Bank from the Pentagon, and both were identified with unpopular wars. But there the similarities end. McNamara visibly used the World Bank as atonement for Vietnam, and became the most influential president in its history.

But like his former master in the White House, Wolfowitz (at least in public) has never admitted responsibility for the debacle that is Iraq. Indeed, some believe that he sees the Bank as another means of bringing democracy to the developing world, the very goal the Iraq war was meant to achieve in the Middle East.

That grand notion has failed, and Wolfowitz's stewardship of the World Bank may be little more successful - even with some new socks.