Wednesday, May 09, 2007

A few more Wolfowitz and World Bank items

Well, it is not exactly news now that the World Bank board committee report is out. I don't have much more to add.

Have I learned anything out of this process? One is that journalists and many other people opine freely on factual issues in which it seems doubtful that they have read the underlying documents. I have read the underlying documentary record, at least the public parts, and I am dismayed to conclude that, whether one thinks Wolfowitz is guilty as charged or not, few of the people writing the accounts that the rest of us read have actually read that record. The cautious journalists frame their reporting in ways that suggest, but don't actually affirm, that the reporter has read the stuff versus relying on someone else's account of it; the less cautious and many of the commentators simply use a Duke lacrosse-lite approach and go with what has come to be known as "narrative reporting" - frame the narrative and then select what you report in order to confirm it, and don't ask skeptical questions that might force you to have to think again.

Obviously I'm not one of the great pooh-bahs in all this - Mark Malloch Brown, Joseph Stiglitz, all the rest - the guys who seem to imagine themselves as the Big Men (African tribal style) of our planet. I'm just a humble lawyer. But I am one who is fairly good at actually, you know, reading things. I have no idea what plots and machinations and political deals lie behind all of the ethics charges. (The Wall Street Journal editorial page, here, Wednesday, May 9, 2007, suggests some possibilities.) I am reasonably experienced at going through piles of documents and reports and testimony and examining whether breaches of fiduciary duty have occurred. It's a modest skill, sure. But reading over what the Great and Good have had to say about all this, I don't see much reason to think that they have actually read the underlying documents either. I suppose I don't really expect them to, because for them all this rises or falls on political calculations in which the truth or falsity of the underlying charges is not really relevant. But in that case, honest people leave aside the charges on which they have no particular knowledge, and make honest cases on policy grounds. Naive, I know.

(ps. excerpts from the WSJ editorial, Axis of Soros, from the open link.)

Axis of Soros
The men and motives behind the World Bank coup attempt.

Wednesday, May 9, 2007 12:01 a.m. EDT
Wall Street Journal, editorial

Mark Malloch Brown spoke Monday to a crowded auditorium at the World Bank's headquarters, warning that the bank's mission was "hugely at risk" as long as Paul Wolfowitz remained its president. Only hours earlier, news leaked that a special committee investigating Mr. Wolfowitz had accused him of violating conflict-of-interest rules. A coincidence? We doubt it.

Mr. Malloch Brown, remember, was until last year Kofi Annan's deputy at the United Nations. In that position, he distinguished himself by spinning away the $100 billion Oil for Food scandal as little more than a blip in the U.N.'s good work, and one that had little to do with Mr. Annan himself. Last week, Mr. Malloch Brown was named vice president of the Quantum Fund, the hedge fund run by his billionaire friend George Soros. A former World Bank official himself and ally of soon-to-be British Prime Minister Gordon Brown, Mr. Malloch Brown would almost surely be a leading candidate to replace Mr. Wolfowitz should he step down. Not surprisingly, Gordon Brown cold-shouldered Mr. Wolfowitz at a recent meeting in Brussels.

The bank presidency would be a neat coup for Sir Mark, and not just because the post has heretofore gone to an American. He also stands for everything Mr. Wolfowitz opposes, beginning with the issue of corruption. Consider Mr. Malloch Brown's defense of the U.N.'s procurement practices.

"Not a penny was lost from the organization," he insisted last year, following an audit of the U.N.'s peacekeeping procurement by its Office of Internal Oversight Services. In fact, the office found that $7 million had been lost from overpayment; $50 million worth of contracts showed indications of bid rigging; $61 million had bypassed U.N. rules; $82 million had been lost to mismanagement; and $110 million had "insufficient" justification. That's $310 million out of a budget of $1.6 billion, and who knows what the auditors missed.

Mr. Malloch Brown also made curious use of English by insisting that Paul Volcker's investigation into Oil for Food had "fully exonerated" Mr. Annan. In fact, Mr. Volcker's report made an "adverse finding" against the then-Secretary-General. Among other details, the final report noted that Mr. Annan was "aware of [Saddam's] kickback scheme at least as early as February 2001," yet never reported it to the U.N. Security Council, much less the public, a clear breach of his fiduciary responsibilities as the U.N.'s chief administrative officer. Mr. Malloch Brown described the idea that Mr. Annan might resign as "inappropriate political assassination"--a standard he apparently doesn't apply to political enemies like Mr. Wolfowitz.

Mr. Malloch Brown never made any serious attempt to reform the U.N. beyond the cosmetic, while doing everything he could to block the real reforms proposed by Americans Christopher Burnham and former Ambassador John Bolton. He was, however, energetic when it came to lecturing Americans about what they owed the U.N., such as joining the "reformed" Human Rights Council (whose only achievement to date has been to castigate Israel), pursuing a "new multilateral national security," and otherwise empowering the likes of Mr. Malloch Brown, his multilateral mates and their tax-free salaries.

Views like these help explain why Mr. Malloch Brown is in such favor with Mr. Soros, who has publicly suggested the U.S. will need a "de-Nazification" program to erase the taint of the Bush Administration. So close are the two that Mr. Malloch Brown lives in a suburban New York home owned by Mr. Soros. Mr. Malloch Brown says he pays market rent, though reporting by the New York Sun's Benny Avni disputes that. In any case, it's safe to assume that Mr. Soros's widely published views are close to Mr. Malloch Brown's somewhat more guarded ones.

So it's not surprising that many on the World Bank staff would cheer Mr. Malloch Brown: He's perfect for an institutional culture in which "progressive" thinking goes hand-in-glove with a tolerance for corruption. That culture has been on vivid display in the Euro-coup against Mr. Wolfowitz. This weekend the committee investigating the claims dropped 600 pages in the president's lap and told him he had 48 hours to respond--in direct violation of World Bank staff rule 8.01, 4.09, which states that "the amount of time allowed a staff member to comment [on an investigative report] . . . will not be less than 5 business days." Following protests from Mr. Wolfowitz's lawyer, the committee gave him 72 hours.

This is the same kangaroo court that last month leaked its guilty verdict to the Washington Post before Mr. Wolfowitz even had a chance to plead his case. Our sources who have seen the committee's report tell us it is especially critical of Mr. Wolfowitz for daring to object publicly to the committee's methods and thereby bringing the bank's name into disrepute. The Europeans running this Red Queen proceeding prefer that they be able to smear with selective leaks without rebuttal.

Mr. Malloch Brown warned on Monday that, if Mr. Wolfowitz stayed as president, European countries might withhold funding from the next financing round for the bank's International Development Association. We hope he's right, though we know few European finance ministers who aren't eager to throw good money after bad. Still, it's a remarkable bit of chutzpah for the man who downplayed corruption at the U.N. to seek the ouster of the man who has fought to reduce corruption at the World Bank.

If the Bush Administration now abandons Mr. Wolfowitz as he faces a decision from the bank's board of governors, it will not only betray a friend but hand the biggest victory yet to its audacious enemies in the George Soros axis.

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