A Legacy in Peril at the World Bank

By Colbert I. King (THE WASHINGTON POST, 28/04/07):

As the U.S. representative on the World Bank's board of executive directors, I formally nominated Alden Winship ("Tom") Clausen in 1980 to be the bank's sixth president. The outcome was never in doubt. Clausen was elected by acclamation. It has always been thus.

Since the World Bank was created at the end of World War II, the election of an American as president has never been seriously challenged. However, 51 years of unbroken American service at the helm of the largest international financial institution are in jeopardy, thanks to the ill-fated presidency of Paul Wolfowitz. This week, the European Parliament, in an unheard-of action, called for his resignation.

What a fall from grace for the United States.

The American reign began in June 1946, when, at the urging of President Harry Truman, The Washington Post's owner, Eugene Meyer, became the World Bank's first president.

It was the job done by Meyer, who built the bank from the ground up, coupled with years of admirable service by Meyer's four American successors that made Tom Clausen's election go so smoothly.

My task before the board was essentially ceremonial. The groundwork for Clausen's acceptance was started months earlier by the Carter administration, led by Assistant Treasury Secretary C. Fred Bergsten, who eased the way through consultations with his counterparts in key European, Asian, African and Latin American capitals.

The real foundation for Clausen's presidency, however, had been laid decades earlier by Meyer, who put in place policies and structures that enabled the bank to play a prominent role in postwar Europe and beyond.

Other distinguished Americans followed Meyer, bringing expertise and luster to the bank. Chief among them were John Jay McCloy, Eugene Robert Black, George David Woods and James D. Wolfensohn. I served on the board during the last year of Robert McNamara's presidency.

McNamara came to the bank draped in the legacy of the Vietnam War. But he left 13 years later praised by one observer as an "[i]ndefatigable builder and wielder of influence on behalf of the Bank and the development cause." I can attest to that.

Each of the nine bank presidents from Meyer through Wolfensohn brought different strengths to the job. Yes, some were better at financial management and international diplomacy than others. But they all shared one quality: Their on-the-job conduct was beyond reproach.

All of that ended with Paul Wolfowitz.

Eugene Meyer set the standard for bank presidents. Wolfowitz has fallen short of that mark. Under his presidency, the bank has been condensed into a tabloid in which the chief executive's girlfriend is Topic A. Instead of concentrating on the bank's basic mission of reducing global poverty, Wolfowitz is spending precious time staving off charges of favoritism, cronyism and conflicts of interest.

The bank staff is up in arms. America's allies are grumbling.

Wolfowitz, in turn, has hired blue-ribbon Washington lawyer Robert S. Bennett to represent his interests before an executive board that would be wild with joy if the former deputy defense secretary and Iraq war architect, along with his handpicked staff, simply cleared out.

Now we have the spectacle of a World Bank president careering from meeting to meeting with groups of subordinates, copping pleas, admitting that he's "lost a lot of trust" -- even going so far as to offer to bring in a "coach" to teach him how not to alienate the staff. And next week he goes before a committee of the executive board -- accompanied by his lawyer -- to try to convince those board members that he should keep his job. How low must he go?

It's embarrassing to watch. It's even more infuriating to think about the opportunity that Wolfowitz has squandered and the jeopardy in which he has placed America's key role in the bank.

His lawyer argues that Wolfowitz's role in getting his girlfriend more money and a cushy State Department job in 2005 was not a "hanging offense." Certainly no charges of criminal activity have been filed against Wolfowitz, and none, to the best of my knowledge, are expected. Whether there have been ethical lapses on his part is a matter yet to be decided by the bank's board.

But Wolfowitz has managed to take the president's traditional role with the executive board and senior staff to a new low.

Bank executive directors and presidents often clash over policies and their respective responsibilities. McNamara and I (acting on behalf of the U.S. government) butted heads over the pace of seating China at the World Bank. But never before was there an unseemly public eruption between the bank's directors and its president over personal behavior. That's a breach that will be hard to repair.

If Paul Wolfowitz knows nothing else, surely he must know that.