Wolf at the Door?

Paul Wolfowitz is in a right pickle. When he took over as president of the World Bank, his girlfriend was working there already. So in order to avoid a conflict of interest, she left and took a job with the State Department. Problem is that Wolfie is supposed to have stepped outside the WB's regulations and negotiated a better salary package than she was due to get.

Bad, but not fatal, one would think--and yet as soon as he acknowledged he screwed up, the WB employees' union called for his resignation. I'm not surprised, since unions are reflexively liberal, and two factors are weighing heavily on Wolfowitz's career:

1. His presidency has been all about ensuring good governance in countries the WB loans money to--in other words, insisting on an end to corruption. That earned him high praise from me here, where I noted that

there seems to be two approaches to lending money to poor countries:

1. Keep pouring money down a hole and hope it fills up, and that eventually the corrupt leaders and everyone involved with spending it unanimously will come to Jesus, decide they've stolen enough free loot, and begin using the loan money as it was intended , or

2. Demand to see where the money goes and make sure it is actually spent on things we intended, rather than on gold hubcaps for the Deputy Undersecretary's nephew's favorite mistress's second Lexus, and not give you any more money until you explain exactly where the first billion went.

Wolfowitz's advocacy of option 2 makes sense to me, but then again I'm just another kindred Neocon warmonger spirit who thinks rampant corruption and crushing poverty might be related...

Advocating reform and fighting corruption makes enemies among the corrupt. And now that his enemies smell a whiff of blood, they're ready to tear him down and get someone a little more pliable in his place.

2. It's Paul Freakin' Wolfowitz, "architect" of the Iraq War. Here in Northern California I have heard dinner companions, well-educated liberal professionals, wish for his death at the hands of terrorists. He's hated, hated like Lincoln was.

So the backlash is no surprise. What also isn't surprising is the sudden liberal interest in punishing leakers who provided internal WB documents to Fox News. The Bank has retained a law firm to track down the person who gave Fox these internal documents.

Which is very interesting in itself, don't you think? People who leak vital national security information to the New York Times are, of course, heroes and no criminal investigation proceeds against them. But throw some transparency on how our tax dollars are being handed out by the World Bank? We're tracking you down, oathbreaker.

So what did these documents say? Glad you asked:

The rebellion against Wolfowitz is led by some of the bank’s biggest borrowers — including China, India, Indonesia and Mexico, which have received a total of $68 billion in outstanding bank loans and development credits. (India, with about $29 billion outstanding, is the Bank’s biggest customer.) Some of those governments recently warned the bank’s executive to tone down any anticorruption strategy that would intrude in their country’s internal affairs.

I know that isn't a particularly sexy story, but I think this is very important and well worth your time for a couple of reasons. In addition to detailing the Asian backlash against Wolfowitz's anti-corruption initiative, it also lays out how for some unfathomable reason, we are loaning China our money--your tax check to Uncle Sam--at rates so low we are undercutting private lenders, who are more than happy to fund Chinese expansion, without the annoying anti-corruption Wolfowitzian strings attached.

So China & co. want to get those super-low rates, but cut those strings.

You know you ought to read a few of these moneylendering international loan shark things every so often just to get the lay of the land. This is a great one because if it doesn't make sense to you, well, that's the point. Why do we have a World Bank? And why do they have a union?

It's also some good journalism by Fox that the blogosphere missed the first time around. Check it out.

PS Should Wolfowitz resign? If I were a professional pundit I suppose I would be required to have an opinion on everything, including that.

I'm not, and I don't. He deserves some punishment for what he did, and he knows it. But I just don't know whether his resignation is the right thing.

What I feel strongly about is that China isn't going to make some kind of end-run around an anticorruption agenda by running Wolfie off. It should be made clear by the Bush administration's top levels that if PW goes, the next guy is going to be a fire-breathing anti-corruption hardass just like him.

I mean, if they don't like the World Bank, then they don't have to take our money, now do they?