Wolfowitz erodes credibility of World Bank and Bush administration

Wall Street Journal

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'Crisis in Leadership'

The report voices specific concern that the "crisis in leadership" may "have a highly negative impact" on a key bank project: raising billions of dollars from rich countries to replenish the International Development Association, the part of the bank that lends to the world's poorest countries.

Both the Bush administration and the bank, then, stand to emerge tarnished from the whole affair. For the White House, the forced departure of Mr. Wolfowitz, a former deputy defense secretary and close ally of Vice President Dick Cheney would come as a further setback at a time when the administration is bleeding top personnel and is widely criticized abroad for launching the Iraq war.

Administration officials now say Mr. Wolfowitz, and the White House itself, may have erred in pursuing a highly legalistic defense instead of a quieter political campaign to restore his reputation. Mr. Wolfowitz hired top-flight Washington defense lawyer Robert Bennett after the controversy began to swell last month, then showered the board with legal briefs complete with exhibits and appendixes.

The dust-up has also shined a light on the World Bank's internal flaws, as senior staffers routinely leaked confidential documents and scrambled to justify management shortcomings in the institution's handling of the compensation package for Mr. Wolfowitz's girlfriend, Shaha Riza.

The talks begun yesterday reflect rapidly eroding support for Mr. Wolfowitz, who as late as Tuesday night had appealed to the board to let him stay on. A crucial change in the landscape came when Bush administration officials on Tuesday decided to abandon their heretofore stalwart defense of Mr. Wolfowitz. That move came after European finance officials openly scoffed at U.S. suggestions, during a Treasury-led conference call about an unrelated matter, that there was still room for Mr. Wolfowitz to restore his standing within the bank and keep his job.