In July, 2005, when Paul Wolfowitz, widely regarded as one of the chief architects of the US decision to invade Iraq, was appointed president of the World Bank, European countries in particular were upset. They saw the appointment as a not-so-subtle affront delivered by the Bush administration.
Nearly two years later they see a perfect opportunity to settle scores as the controversial ideologue is caught in the swirl of a scandal involving Shaha Ali Raza, a senior bank employee widely known to be his romantic interest. As details come out about how Wolfowitz gave Raza a hefty pay raise and personally arranged an assignment for her at the State Department, it is possible that European countries may move in for the kill.
The timing of the revelations that Wolfowitz at the very least twisted bank rules to accommodate his 'girlfriend' is particularly inopportune coming as they do on the eve of the crucial spring meeting of finance ministers organized by the bank and the International Monetary Fund (IMF). There are indications that some European countries, particularly Germany and France, might use the unraveling scandal to push Wolfowitz out.
Notwithstanding an unequivocal expression of support from the White House, Wolfowitz's presence at the bank is becoming increasingly tenuous with the institution witnessing unprecedented scenes of booing and hissing at a meeting of employees addressed by the bank president Friday. Reports said he had to leave the meeting even as the employees chanted demand for his resignation.
According to published reports, Wolfowitz helped negotiate a raise in her salary from $132,660 to $193,590. Although she was deputed to the State Department to avoid any conflict of interest because their relationship, her tax free salary came from the bank.
Many believe the scandal has split open many hidden resentments and dissensions against Wolfowitz who was seen by bank employees as pushing the Bush administration's agenda. For instance, there was criticism that he denied funding for many family planning programs in Africa because he represents a conservative religious view which disapproves of family planning and abortion.
There are already indications that some European countries may hold back billions of dollars of their share from the international development assistance unless Wolfowitz is made to quit. The 24-member executive board of the bank, which elected him, has said it would take an expeditious decision in the matter. The decision could range from a mere reprimand to an actual ouster.
The pressure has been mounting within the bank with its staff association making an extraordinarily unambiguous comment on the controversy saying it is "impossible for the institution to move forward with any sense of purpose under the present leadership."
The former US deputy secretary of defence has had a rough time with many senior employees viewing him as Bush's man using the bank to further his former boss' agenda.
In a measure of how defensive the otherwise feisty Wolfowitz has become in the aftermath of the scandal was his appeal to the staff members not to mix his role in the Iraq war with his work at the bank, including fighting poverty in Africa.
"For those people who disagree with the things that they associate with me in my previous job, I'm not in my previous job," he said in a rare show of contrition.
His fate certainly hangs in the balance but it is likely that rather than ousting him altogether the executive board might use the opportunity to cut him to size and put more restriction on his policies. With 16 percent, the US has the largest share of contribution to the bank among the donor countries. It is this share that makes the US more consequential in the running of the bank.