Wolfowitz seen as a world apart at bank

By Nicole Gaouette

May 11, 2007 12 AM PT

Times Staff Writer

WASHINGTON —

In the tense days after World Bank President Paul D. Wolfowitz admitted his mistake in arranging a generous payment package for his girlfriend, angry employees launched an impromptu campaign. Blue ribbons started cropping up on lapels, taped to doors and as an image in e-mails -- a symbol of support for the bank’s ideals of good governance and transparency.

The curls of fabric were seen by many of the more than 7,000 staffers in Washington as a silent but clear call for their leader to resign.

Then Wolfowitz himself was seen wearing one.

For employees chafing against his leadership, that blunder became a vivid example of Wolfowitz’s isolation from the bank’s employees -- a remoteness that has left him with few allies inside the international poverty-fighting institution as he battles to keep his job.

A political scientist and former Pentagon official known for his analytical skills and predilection for sweeping, visionary ideas, Wolfowitz also has a reputation for remaining aloof from day-to-day management decisions. At the World Bank, he brought in a tightknit cadre of aides -- all onetime GOP political operatives with no experience in development projects -- who limited the access of bank veterans to the new president.

These aides, according to more than a dozen World Bank employees who spoke on condition of anonymity because they feared for their jobs, showed little patience for bank practices, excluded veteran staff experts from negotiations over development plans for countries and went around managers to quiz staff about their work.

“When he arrived at the World Bank, he began by listening very carefully,” said Sebastian Mallaby, author of a book on the World Bank. “But it emerged after six months or so that all of this would go in one ear and out the other. When it really came time to do something, he appeared to fall back on the advice of three people he had brought with him from the outside. The internal experts were feeling more and more out of the loop. That set Wolfowitz up.”

Wolfowitz has apologized to his staff for the arrangements for his companion, a World Bank employee on loan to the State Department, saying: “I made a mistake for which I am sorry.” And he has promised a management shake-up. One top aide has already resigned, and another was recently moved to an office farther away from Wolfowitz.

Tough social dynamic

Through his lawyer, Wolfowitz declined to comment, but he has previously criticized bank staff for what he called “a conscious campaign to undermine my effectiveness as president and derail important programs.”

Former Wolfowitz colleagues argue that bank staff were inclined from the start to dislike the former deputy secretary of Defense, regardless of whom he brought with him. Wolfowitz is seen as a principal architect of the war in Iraq, which much of the bank staff opposes.

“To understand his situation, one would first have to understand what he inherited -- the social dynamics,” said retired Army Maj. Gen. John Batiste, referring to the staff hostility toward Wolfowitz. A former senior military assistant to Wolfowitz during his tenure at the Pentagon, Batiste said he was in constant contact with Wolfowitz for 15 months during the Iraq war.

“Paul Wolfowitz is a hardworking, brilliant man,” Batiste said. “He was patient, decisive when he needed to be, thoughtful.”

Fred C. Ikle, a friend and former undersecretary for Defense policy in the Reagan administration, is perplexed by the critique of Wolfowitz -- who took Ikle’s job at the Pentagon. “He was very open to looking for outside advice; he reached out to different people,” Ikle said.

But he acknowledged that Wolfowitz faced a much greater challenge at the World Bank, with its 185 member countries and more than $23 billion in grants and loans worldwide. “That was a different job. It requires a different style if you’re the top guy,” Ikle said.

At 63, Wolfowitz is familiar, comfortable even, in the role of an outsider working within the power structure.

In the early 1970s, he came to Washington after teaching at Yale University and joined a band of neoconservatives who advocated the use of unilateral, muscular U.S. power. They were a lonely crew in a city dominated by Secretary of State Henry A. Kissinger’s pragmatic approach to foreign policy. Wolfowitz quickly learned to create his own networks and distrust conventional wisdom.

Under then-CIA Director George H.W. Bush, he worked on a team whose job it was to buck the status-quo thinking about military threats. In the late 1970s, as a Pentagon analyst, he went against the grain, pegging Iraq as a threat to surrounding states more than a decade before the first Persian Gulf War.

Wolfowitz’s reputation as a visionary who argued that America should use its power to make the world a better place appealed to the staff at the bank. He “has compassion for poor people and thus believes in the mission of the bank,” said a recently retired employee.

When he arrived almost two years ago, Wolfowitz vigorously embraced a campaign to eliminate corruption in World Bank projects, a mission started by the previous president. But some on the staff began to take issue with how Wolfowitz ran the effort. Staff and aid groups criticized Wolfowitz, saying he ignored the advice of longtime experts and pursued a political agenda -- targeting some countries for corruption, but overlooking U.S. allies in the war on terrorism.

“India was corrupt, but Pakistan could do no wrong,” said the retired employee.

A hard edge

Bank staff interviewed for this article had little praise for Wolfowitz’s management style. They described him as a remote and indecisive leader with a hard edge.

One staffer, who waited 18 months for Wolfowitz to weigh in on a high-priority matter, said employees were put off by “how opaquely Wolfowitz’s office made a decision” and the lack of response to their overtures. “I must have sent papers up with options ... 10 times, but heard nothing,” the staffer said.

This staffer said Wolfowitz came across as self-deprecating, but also said “there were signs that that was not the core of him.” The staffer recalled an early meeting at which “he barked at someone because he didn’t like the way they were rattling the coffee cups.”

Bank critics also said the president seemed disinclined to delve into most policy details. One senior employee recounted a meeting about improving national diversity among the staff, a priority request from the board. The group worked for 18 months and presented Wolfowitz with two options. But at the meeting, the employee said Wolfowitz told the group he had not read their briefing book or their one-page summary, and he seemed unable to make a choice. “We saw dithering, speculating, as if he was at a graduate seminar,” said the employee.

When the group prepared its final report, Wolfowitz’s aides directed them to leave out the section on national diversity. “It was a phenomenally inept assessment of the board’s needs -- totally tone-deaf,” said the senior employee.

A three-decade bank veteran said that same quality was evident in Wolfowitz’s personal interactions. At one event to celebrate employees marking long-term anniversaries at the bank, spouses were invited to meet the president. Wolfowitz gave a quick speech, then returned to his office.

“This is an opportunity to win friends; he’s been there a year and a half, and this is how he runs the event,” the veteran said, adding that Wolfowitz had “zero emotional intelligence.”

Some employees said that Wolfowitz favored his handpicked aides so much that he would blame their mistakes on the professional staff.

One staffer recounted Wolfowitz shouting at colleagues for failing to provide information on the bank’s Middle East strategy. The group had given it to his staff days earlier, but his staff had failed to pass it along.

“Rather than say, ‘I’m very sorry,’ he continued to berate us as if we were children, not competent adults. Every time we said, ‘You’re misinformed,’ he would come at it from a different angle, never, ever admitting he or his staff might be at fault,” the staffer said.

Some of the employees interviewed for this article said their anger was rooted in concern that Wolfowitz was damaging the bank’s credibility and its mission. But some also spoke of a certain inevitability to the situation -- not based on the initial reception when Wolfowitz came to the bank, but on the way he dealt with it after that.

“You could see him as a guy who knows he’s walked into a hostile organization that hasn’t embraced his nomination. I can understand that in the beginning,” said the recently retired employee. “But people came to him and said, ‘We’re international civil servants, not politicians; let’s make things work.’ That hand was extended, and it was not extended back.”

nicole.gaouette@latimes.com

(BEGIN TEXT OF INFOBOX)

Paul D. Wolfowitz

Age: 63

Birthplace: Brooklyn, N.Y.

Government career: Management intern, U.S. Bureau of the Budget, 1966-67; U.S. Arms Control and Disarmament Agency, 1973-77; deputy assistant secretary for regional programs, Defense Department, 1977-80; director of policy planning, State Department, 1981-82; assistant secretary for East Asia and Pacific affairs, State Department, 1982-86; U.S. ambassador to Indonesia, 1986-89; undersecretary for policy, Defense Department, 1989-93; deputy secretary, Defense Department, 2001-05; president, World Bank, 2005-present

Academic career: Political science professor, Yale University, 1970-73; professor, National Defense University, 1993; dean, Paul H. Nitze School of Advanced International Studies at Johns Hopkins University, 1994-2001

Education: Bachelor’s degree in mathematics and chemistry, Cornell University, 1965; doctorate in political science, University of Chicago, 1972

Personal: Divorced; two daughters and a son

Los Angeles Times

A bank with a mission

The World Bank is not a bank in the traditional sense but a lending institution that provides low-interest loans, interest-free credit and grants to developing countries, with the mission of global poverty reduction. Here’s a look at how it operates:

President: Paul D. Wolfowitz, since June 2005

Membership: 185 countries

Headquarters: Washington, D.C., and more than 100 country offices

Staff: About 10,000

Established: July 1, 1944

The World Bank Group consists of several agencies, including:

* International Bank for Reconstruction and Development (IBRD): Provides loans to middle-income countries and credit-worthy poor countries. Fiscal 2006 lending: $14.1 billion in 33 countries.

* International Development Assn. (IDA): Focuses on the poorest countries. Fiscal 2006 commitments: $9.5 billion in 59 countries.

Lending in 2006

Where the $23.6 billion went

For fiscal 2006, by region:

Latin America & Caribbean -- 25%

Africa -- 20%

Europe & Central Asia -- 17%

South Asia -- 16%

East Asia & Pacific -- 14%

Middle East & northern Africa -- 7%

Top borrowers

About one-third of the $23.6 billion in 2006 went to five countries. In billions: