Grasping Reality on TypePad, by Brad DeLong

I take it back. Even if Paul Wolfowitz were doing a good job as president of the World Bank, his corruption in the matter of Shaha Riza would make his immediate dismissal imperative.

Xavier Coll, Vice President for Human Resources at the World Bank, wrote a memo to himself fourteen months ago http://siteresources.worldbank.org/NEWS/Resources/Annex13.pdf:

Xavier Coll: 3/17/06
Record of conversation with Paul Wolfowitz on 3/16/06
Duration: 10 minutes

Mr. Wolfowitz asked for a private meeting with me after a meeting of the Senior Management Team on Thursday, March 16, 2006. The conversation proceeded as follows:

Mr. Wolfowitz produced a piece of paper with a question regarding the proposed increase [in the salary] of Shaha Rizza, stating that it had come from a journalist writing a piece about the Bank. (I assumed it was from Ed Pound of US News and World Report.) Mr. Wolfowitz note that only three people knew about the details of the increase, and asked how the journalist could have obtained the information. He asked me to whom I had provided the information about (Shaha's external service) agreement [as to what her salary would be at the State Department].

I confirmed that I had not leaked the information, and that the information was given only to members of the HR team on a need-to-know basis: Carol Heron and Viera Forsythe. (I was unnerved and did not mention the names of compensation manager Fonz Marcelis and Aulikki Kuusela, to whom I had provided the information so that the agreement could be implemented. I had consulted Aulikki about whether I had the authority to authorize a merit rating that was above the merit rating specified in the staff rules for external service with pay programs. She said that a clear instruction from the president provided sufficient mandate.) I also did not state that around the time of the John Smith note to the Board and related press coverage (Andrew Balls, Financial Times) in January 2006 regarding Shaha's promotion to level H, I had a conversation with Graeme Wheeler about my concerns that the agreement with Ms. Rizza could undermine Mr. Wolfowitz's credibility.

Mr. Wolfowitz said "this is a very serious case," because "Shaha had been discriminated against by the Bank, the Board had mishandled the issue and people in the Bank are attacking us in an unfair way." He said that Shaha had not been previously promoted because of discrimination. I noted that more than a year ago Mr. Wolfensohn had raised the issue of Shaha's promotion and that I had discussed it with two Vice Presidents, Ian Goldin and Crik Poortman.

At the end of the conversation, Mr. Wolfowitz became increasingly agitated and said that he was "tired of people like Shengman, Robert Danino and Gerry Rice attacking him," and "you should tell your frieds to stop it." I said I had not spoken with these individuals, with the exception of Gerry, with whom I had discussed his external assignment and new job at the IMF.

Mr. Wolfowitz said, "If they fuck with me or Shaha, I have enough on them to fuck them too." Mr. Wolfowitz mentioned Shengman's wife, issues with Danino, and Gerry Rice's short-listing.

As I was exiting the office, I encountered Letitia Obeng.

In the afternoon following the meeting, I requested a meeting with Graeme Wheeler to express my concerns about the conversation with Mr. Wolfowitz. I told Grame that I had discussed implementation of the agreement with Fonz and Aulikki.

Graeme said the conversation was worrisome, but that I should continue working and trying to regain Mr. Wolfowitz's trust. I confirmed that I had not leaked the information to any journalist--nor to anyone who might have leaked the information. I also stated that beyond Mr. Wolfowitz and Robin Cleveland, Shaha and her lawyer knew about the information, and may have discussed the agreement with outside parties.

More documents. They make very interesting reading: http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:21335418~pagePK:64257043~piPK:437376~theSitePK:4607,00.html.