Wolfowitz resigns from World Bank

[stephenite]

Good, delighted for the snivelling little scum bag


From SMH.com.au

World Bank president Paul Wolfowitz said he would resign at the end of June, ending a month-long scandal over a pay and promotions deal he awarded to his girlfriend.

In a statement issued at the end of three days of deliberations by the World Bank board, Wolfowitz said he was resigning in the best interests of the institution.

"I am announcing today that I will resign as president of the World Bank Group effective at the end of the fiscal year (June 30,  2007),'' Wolfowitz said in a statement today.

His decision came as White House support appeared to crumble, with US President George Bush earlier expressing "regret'' over the favouritism scandal, despite having stood resolutely behind his former Pentagon number two.

Bush, speaking at a joint White House news conference with British Prime Minister Tony Blair, failed to reiterate earlier statements that Wolfowitz, whom he named for the World Bank post in  2005, should stay in the job.

"I applaud his vision, I respect him a lot, and I regret it's come to this,'' Bush said.

Wolfowitz, 63, a longtime Bush ally and former deputy defence secretary, reportedly was trying to negotiate a compromise deal that would recognise the bank's flawed advice in resolving a conflict-of-interest crisis with his girlfriend, Shaha Riza, a bank employee.

An internal World Bank report made public Monday concluded that Wolfowitz violated bank rules in arranging a generous promotion and pay package for Riza shortly after he assumed the bank presidency in June 2005.

The report also said the bank had given him cloudy instructions on how to resolve the matter.

European countries have led the drive for Wolfowitz's departure from the 185-country bank for more than a month, and White House support waned in recent days as the controversy deepened.

A fresh call came on Thursday in the Slovenian capital of Bled, where an annual World Bank conference on development economics opened.

Wolfowitz, who had planned to deliver the keynote address tonight, cancelled his appearance.

"Now this scandal has been dragging on for too long, which is undermining the credibility of the institution,'' Slovenian Finance Minister Andrej Bajuk told journalists on the sidelines of the meeting.

World Bank vice president Francois Bourguignon assured the Bled conference that despite the controversy, the institution "remains firm in its commitment to eliminate poverty around the world''.

On Tuesday Wolfowitz had pleaded with directors to let him keep his job, in which he has made fighting corruption a priority.

"I have said I am not without fault in the matter,'' Wolfowitz said of the scandal surrounding Riza, who ended up earning almost $US200,000 ($243,000) a year when she was transferred to the State Department, still on the World Bank's payroll.

Wolfowitz acknowledged he had relied too heavily on outside advisers he brought in to the bank, and pledged to change his management style "to regain the trust of the staff''.

[Donagh]

Maybe Hugo could have a position for him

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Hugo Chávez moves into banking
Venezuela and Brazil battle quietly over the shape of a planned regional development bank



There have been few more assiduous customers of the International Monetary Fund and the World Bank than Latin American governments. Even as they privately welcomed the economic rationality that comes with loans from the fund and the bank, the region's leaders often blamed them for unpopular but needed measures. So it is not surprising that many Latin Americans revile the two multilateral institutions. They see them as dominated by the United States, and as having imposed the "Washington consensus" of macroeconomic stability at the expense of other priorities.

It is that sentiment that Hugo Chávez, Venezuela's leftist president, is trying to tap with his plan for a Banco del Sur (Bank of the South), a development bank funded and run by Latin American countries themselves. If all goes to plan, it will be formally launched next month, and could start operating next year. The preparatory talks involve Argentina, Brazil, Bolivia, Ecuador and Paraguay as well as Venezuela.

But there is a big difference between Mr Chávez's vision for the bank and that of others, especially Brazil. This will probably be papered over at a meeting in Rio de Janeiro—but it just might develop into an open split between South America's two most powerful countries.

Mr Chávez sees his bank as part of a wider anti-American political project and as an alternative to the IMF and the World Bank, from which he says Venezuela will withdraw. He has re-nationalised American-owned telecoms and electricity companies. He also threatens to pull out of the Organisation of American States if its sister body, the Inter-American Human Rights Court, condemns his government in a pending media-freedom case.

It is one thing to badmouth the multilaterals but another to leave them, even for oil-rich Venezuela. Pulling out of the IMF would amount to a technical default on Venezuela's bonds and would raise the cost of future borrowing.

Leaving the World Bank would tear up bilateral investment treaties that Venezuela has signed with other countries (and which use the bank's investment-dispute machinery).

With the oil price high, Mr Chávez seems happy to alienate foreign investors. Others are not. Both Argentina and Brazil have taken advantage of economic growth and high commodity prices to pay off their debts to the IMF. Neither talks of leaving the fund. Bolivia's Evo Morales is one of Mr Chávez's closest disciples, but his finance minister says that joining the Bank of the South would not mean pulling out of the IMF.

Ecuador's Rafael Correa shares Mr Chávez's ideas for the new bank. At a meeting of finance ministers in Quito earlier this month, he said it should combine the emergency-aid functions of the IMF with the project lending of the World Bank and the Inter-American Development Bank.

But the ministers did not approve that proposal. They decided that the Bank of the South would be just a "development bank", adding that a stronger regional reserve fund (a small one already exists) might be created at a later stage. Brazil's finance minister, Guido Mantega, had already rejected the idea that the new bank might provide financial first-aid without the tough conditions the IMF imposes. He called for "modesty and parsimony" in any new body.

After the meeting, Mr Mantega said that each country should contribute between $300 million and $500 million to the bank's capital. If so, no single country would dominate it, though a coalition of Mr Chávez's closest allies might. Brazil's contribution, Mr Mantega suggested, would come from the national development bank, the BNDES. The development minister, who controls the BNDES, promptly rejected the idea. Though Mr Mantega committed Brazil to the bank, the foreign ministry says the government is still "analysing" the idea.

There are existing South American bodies that could serve as the nucleus for the new bank, including the Andean Development Corporation (CAF) and the Fund for the River Plate Basin (Fonplata). They are not political vehicles. Last year CAF lent over $5 billion. Its Bolivian chairman, Enrique García, has said he welcomes any fresh initiatives along the same lines. But many within CAF doubt that the Bank of the South is viable.

The debate over the bank reflects a broader struggle for influence in South America between Brazil and Venezuela. Brazil's president, Luiz Inácio Lula da Silva, has a good relationship with George Bush, whom he has met twice in recent weeks. But he has always got along with Mr Chávez too, doing little to challenge the Venezuelan's pretensions to regional leadership. This friendship goes down well with many in Lula's Workers' Party, but it has made Brazil look indifferent to Mr Chávez's assaults on Venezuelan democracy.

Recently, Brazil has distanced itself from Venezuela on some issues. In March its communications minister compared Venezuela's state television to Cuba's—the closest any Brazilian official has come to criticising the anti-democratic drift of Mr Chávez's rule. The two countries disagree about energy policy. Mr Chávez echoed Fidel Castro in attacking ethanol, just when Lula and Mr Bush agreed to encourage its production.

Brazil's testiness with Venezuela has been sharpened by Bolivia's treatment of Petrobras, the state-owned energy firm. A year ago, egged on by Mr Chávez, Mr Morales "nationalised" oil and gas, forcing Petrobras to accept harsh new terms for its Bolivian operations. On May 6 Mr Morales issued a decree giving Bolivia's state-owned YPFB a monopoly of sales from Petrobras's two Bolivian refineries, in effect expropriating their cash flow. This time Brazil's government weighed in to condemn the property grab, giving warning that it could hurt relations between the two countries. Petrobras has issued an ultimatum: buy the two refineries for a fair price or face international arbitration.

There is an "inflection" in Brazilian policy, with Lula drawing back from Venezuela and moving towards pragmatic governments in Chile and Peru, argues Sérgio Amaral, a former development minister. But, he adds, there are "clear limits" to this.

These are defined partly by business interests. Brazil's exports to Venezuela rose by 60% last year. Brazilian multinationals are investing heavily. Odebrecht, a construction company, has built a new metro line in Caracas and a bridge over the Orinoco, and is building a $2.5 billion hydroelectric dam. Braskem, Odebrecht's petrochemicals arm, has a $3 billion partnership with state-owned Pequiven, which includes building two plants to produce plastic resins. Companhia Vale do Rio Doce is eyeing Venezuela's mineral riches.

So although Brazil may either stall or moderate the plan for a Bank of the South, it is unlikely to reject it outright. But next time a financial crisis shakes Latin America, expect governments to turn again to the IMF rather than to Caracas.

© The Economist Newspaper Limited 2007

[J70]

Not that I've any love for Wolfowitz, but lets hope the same standards are brought to bear when the next "oil for food"-type scandal or the like comes up.

[stephenite]

Not that I've any love for Wolfowitz, but lets hope the same standards are brought to bear when the next "oil for food"-type scandal or the like comes up.

Agree - I don't think there's any doubt that his high profile position in the Bush administration was one of the motiviating factors in some countires pushing for his removal - if he was anyone else they wouldn't have cared

[belleaqua]

Not that I've any love for Wolfowitz, but lets hope the same standards are brought to bear when the next "oil for food"-type scandal or the like comes up.

Agree - I don't think there's any doubt that his high profile position in the Bush administration was one of the motiviating factors in some countires pushing for his removal - if he was anyone else they wouldn't have cared

Agreed on the above, Wolfowitz was one of the hawks in the Bush Administration and a leading figure in the case for the war in Iraq, agreement on the current situation was no surprise considering his previous positions. Its still a bit startling to realise that he got support for this position in the first place, either it highlights the undisputed power of the USA or the welcoming of other countries that he was out of the Cabinet. Imagine him as Sec of Defence!!

[redandblack4ever]

One down, three more to go: Alberto Gonzales, Cheney, and then Chucklenuts.

Mrs. redandblack4ever

[J70]

One down, three more to go: Alberto Gonzales, Cheney, and then Chucklenuts.

Mrs. redandblack4ever

You don't think there's another wingnut waiting to take Gonzalez's place?

The stories coming out this week of Gonzalez and Andrew Card being raced to AG John Ashcroft's hospital bed by the Asst (and acting) AG Comey to prevent them from duping the sick AG into approving an extension of the wiretapping before it was adjusted to make it fully legal sounds like something from some political thriller!

[J70]

Not that I've any love for Wolfowitz, but lets hope the same standards are brought to bear when the next "oil for food"-type scandal or the like comes up.

Agree - I don't think there's any doubt that his high profile position in the Bush administration was one of the motiviating factors in some countires pushing for his removal - if he was anyone else they wouldn't have cared

Agreed on the above, Wolfowitz was one of the hawks in the Bush Administration and a leading figure in the case for the war in Iraq, agreement on the current situation was no surprise considering his previous positions. Its still a bit startling to realise that he got support for this position in the first place, either it highlights the undisputed power of the USA or the welcoming of other countries that he was out of the Cabinet. Imagine him as Sec of Defence!!

Apparently the US chooses the head of the World Bank, while Europe chooses the head of the IMF. Why this continues to be the case, I do not know.

[Donagh]

One down, three more to go: Alberto Gonzales, Cheney, and then Chucklenuts.

Who's Chucklenuts? Bush? 

[SammyG]

Yet more proof that Americans don't understand irony. Wolfowitz organises and funds coups, wars, illegal invasions etc etc etc and that's all fine but as soon as he gives his girlfriend a pay rise and he's forced to resign. Nice to see they've got their priorities right.

[gallsman]

One down, three more to go: Alberto Gonzales, Cheney, and then Chucklenuts.

Mrs. redandblack4ever

Hmmm, even though Ashcroft is gone, could we not get him as well? Biggest p***k of the lot.

[J70]

Yet more proof that Americans don't understand irony. Wolfowitz organises and funds coups, wars, illegal invasions etc etc etc and that's all fine but as soon as he gives his girlfriend a pay rise and he's forced to resign. Nice to see they've got their priorities right.

It was hardly the Americans that drove this.

[redandblack4ever]

In case anyone is interested here is a clip from Youtube of James Comey's testimony to the Senate Judiciary Committee on Tuesday, May 15, 2007:

http://www.youtube.com/watch?v=hxHjWYA50Ds

This particular clip is long, it's 20:04 in duration, but it's very compelling.

It's way past time to get the impeachment proceedings up and running. Chucklenuts & Co. don't give a f**k about the US Constitution or the laws of the land. They think they can do anything and get away with it.

What Mr. Comey describes is very reminiscent of a scene out The Godfather, Part I and IMO sums up exactly what the present administration of the US is: the Mafia.

[redandblack4ever]

Don't mean to reply to my own posting but here's another Youtube clip of Chucklenuts in action yesterday at a press conference he had in the Rose Garden of the White House with Tony Blair. The questions were asked by Kelly O'Donnell who is a reporter for NBC News and notice how Chucklenuts won't answer her questions.

http://www.youtube.com/watch?v=R0HEKTr6wrc

IMHO, by not answering the questions about the hospital visit in March, 2004, he just confirmed that he had something to do with it.

Another update, the Democrats in the Senate are trying to get a vote of "no confidence" in Gonzales for sometime next week before they go on a break for Memorial Day. According to sources in the American media, 9 Republican Senators have called for Gonzo to go.

If this vote of "no confidence" passes with 60 votes, and I think it will, maybe then Chucklenuts will tell Gonzo to literally "give it up". 22 Republican Senators are up for re-election in 2008 and most of them are running as far away from and as fast as they can from Chucklenuts & Co.

This crew make the Coreleone family and the Sopranos look like pikers.