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Corruption at the World Bank

Had he never decided, in the late 1970's, that Saddam Hussein was a menace worth removing for humanitarian and strategic reasons, Paul Wolfowitz would have still been known as the man most responsible, as ambassador to Indonesia between 1986-89, for facilitating the end of the Suharto dictatorship. So should it come as any surprise that a stooge and profiteer of that dictatorship tops the list of functionaries at the World Bank agitating for Wolfowitz's resignation? Bret Stephens at the Wall Street Journal reports:

In Mr. de Tray's case, it may seem strange that a man who was willing to countenance the theft of the bank's money by Suharto & Co. as the inevitable price of "helping people" (which people?) should now wax indignant about the damage Mr. Wolfowitz has supposedly done to the bank's "credibility as the international community's trustee of resources for fighting poverty," in the words of the FT letter. Yet Mr. de Tray is nothing if not consistent: Since leaving the bank last year, he has publicly objected to the "Puritan overtone in the current debate on corruption" and argued that Suharto's corruption "created value for Indonesia . . . just as Sam Walton created value for the U.S."–comments that nicely capture the quality of economic analysis at the bank as well as the prevailing in-house view regarding Mr. Wolfowitz's anti-corruption campaign.

And I'm positive that those who think it unethical to occupy a high managerial post at the Bank while your girlfriend moves up a paygrade will be demanding this guy's desk cleaned out by the end of the week:

Now consider the case of Shengman Zhang, a former No. 2 at the bank who is currently a vice chairman for the global banking division at Citigroup. Mr. Zhang, whose name appears third on the list of signatories, is the husband of Lingzhi Xu, a World Bank employee who began her career as an assistant working in procurement issues–a "Level D" position with a "market-reference point" of $52,000–and was ultimately promoted to her current job–a "Level G-G" high-level staff position with a reference point of $123,000.

Since Mr. Zhang was a managing director of the bank, his wife's employment presented significant similarities to the conflict-of-interest problem that required Mr. Wolfowitz to seek a new job for Ms. Riza, yet it never seems to have raised an eyebrow within the bank's management. Even more remarkable was the relative speed and ease of Ms. Xu's ascent. 

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