8 May 2007
The New York Times reports that European governments may allow the US to continue to choose the leader of the institution in exchange for Wolfowitz's resignation.
By tradition, the US chooses the leader of the World Bank and European governments select the leader of the International Monetary Fund. Although many have called for ending this tradition altogether, European officials may be trying to "avert a public rupture of the bank board over a vote, possibly later this week, to sanction Mr. Wolfowitz," the Times' Steve Weisman writes.
"We want to avoid a split between the United States and its European allies," a senior European official told Weisman. "We're willing to say: 'O.K., you find a capable American to run this institution and we can live with that."
The Board committee investigating the scandal forwarded its findings to Wolfowitz on Sunday night. Word is that the report concludes that Wolfowitz did overstep his bounds in arranging a deal for his girlfriend to be transferred to the State Department.
The Bank is also to blame, the report allegedly asserts, as the Ethics Committee gave Wolfowitz unclear directions on how to handle the situation.
Wolfowitz has been given 48-72 hours (reports vary) to respond to the findings. On Tuesday, his lawyer asked for more time.
The committee has not yet recommended a punishment for Wolfowitz, but is expected to in the coming days. It could voice a loss of confidence in Wolfowitz's ability to lead the institution, or recommend his outright removal.
The US administration continues to voice its support for Wolfowitz. Treasury Secretary Henry Paulson supports giving Wolfowitz more time to respond to the panel's report. "From the start secretary Paulson has said that president Wolfowitz is a dedicated public servant who deserves a fair process rather than a rush to judgment," the Financial Times quotes his spokesperson as saying. "That includes sufficient time to review the ad hoc committee’s report and respond, as well as sufficient time for the ad hoc committee to consider his response to the report.”
Bush spokesperson Tony Snow commented on Tuesday that the President is"not getting directly, personally involved". A spokesperson for US Vice President Dick Cheney told the Financial Times "the vice-president solidly supports Paul Wolfowitz. He thinks he’s done a good job at the bank and should continue”.
Meanwhile, Kevin Kellems, one of Wolfowitz's top aides, announced his resignation yesterday. "In the current environment surrounding the leadership of the World Bank group, it is very difficult to be effective in helping to advance the mission of the institution," Kellems told the Financial Times.
And it looks like another head may soon be on the chopping block. Yesterday, the Financial Times reported that Robin Cleveland, another close adviser to the President, was involved in releasing a misleading statement about the Riza situation. Cleveland and Marwan Muashar, the director of external affairs, apparently released an anonymous statement suggesting that the Bank's Ethics Committee approved Riza's external assignment after consulting with General Counsel Roberto Danino, the FT reports. Danino refuted the statement last week. The debate over this claim has been at the center of the scandal.
Many now think that it is only a matter of time before Wolfowitz steps down. What is next for the World Bank? Rumors are circulating about who will serve as President in the short and longer term.
Perhaps the most likely candidate to serve as Acting President is Lars Thunell, current head of the IFC. A Swedish banker, Thunell has kept some distance from the current scandal and is thus perceived as quasi-neutral.
Names circulating as potential candidates for the next President include Robert Zoellick, former US Trade Representative and US Deputy Secretary of State under Bush, or Stan Fischer, former WB Vice-President who is currently the Governor of the Bank of Israel. Other less likely candidates include Ashraf Ghani, a social scientist with the World Bank who was the former Minister of Finance in Afghanistan.
Read Alex Wilks' overview of likely scenarios for the coming days on www.worldbankpresident.org.